3 Comments

Summary:

A legitimate copy of The Dark Knight costs about $641 in India, if you adjust the price based on the comparative purchasing power of local consumers. These pricing discrepancies drive people in many emerging markets around the world to piracy, a new study finds.

pirated dvds

Piracy is an epidemic around the world, and international enforcement efforts have done little to stop this trend, according to a new study. Media Piracy In Emerging Economies, which was released this week by the Social Science Research Council, takes a detailed look at piracy in emerging economies like India, Russia, Brazil, Mexico and Bolivia — countries that are regularly singled out by the U.S. government for being piracy hotbeds.

How how people pay for the Dark Knight DVD around the world, including adjusted prices based on the "comparative purchasing power" of local consumers.

The authors of the study agree with this assessment, but their conclusions are very different. Worldwide piracy, they say, “is probably better described as a global pricing problem.” In other words: People in emerging economies simply don’t have enough money to buy legitimate copies of DVDs and CDs. “Relative to local incomes in Brazil, Russia, or South Africa, the price of a CD, DVD, or copy of Microsoft Office is five to ten times higher than in the United States or Europe,” the authors write.

The reason for this price disparity is the lack of legal competition in these markets, the authors argue. U.S. consumers can get their movies from a wide variety of services, including Netflix, Redbox kiosks and VOD services. Consumers in Bolivia, on the other hand, can only chose between overpriced legitimate DVDs and much cheaper unlicensed copies — which isn’t really a choice at all if you can only afford the latter.

Media Piracy In Emerging Economies puts a lot of effort into the analyzing the pricing of legitimate and informal markets in the various countries surveyed — but what makes the study really stand apart from other research is the fact that it also looks at key differences between the countries that are often based as much on the cultural history as on the local economy. For example, did you know:

  • That the city of La Paz brokered a deal between theater workers and vendors of pirated DVDs in 2006, effectively introducing a three-month window for the sale of pirated movies to protect theater ticket sales?
  • That South Africa has less than 100 theaters, most of which are located in white suburbs, and that piracy was long seen as a form of political resistance against an apartheid regime that restricted the access to culture based on the color of people’s skin?
  • That much of the physical DVD piracy in Russia is related to overproduction in licensed factories, which in some cases manufacture three times as many DVDs as they’re allowed to?
  • That pirates in Brazil often use Orkut to trade links to files hosted on one-click file host sites?
  • That street vendors in India view anti-piracy raids as a minor hassle, comparable to bad weather? From the study: “Arguably, the greatest threat to the informal street economy is not the long arm of the law but the unpredictable nature of the weather. It is a common sight in Bangalore to see hundreds of street vendors sent scattering for cover by sudden, heavy monsoon rain. Police raids, in general, produce much the same effect and often have the same outcome, with street vendors resuming their places once the raid is over.”

Media Piracy In Emerging Economies not only talks about the influence income disparity has on piracy, it’s also proactive about not running into the same trap as Hollywood & the Western music industry. Readers from the U.S., Western Europe, Australia, Japan and some Gulf States have to pay $8 to download the 440 page report, while the rest of the world gets it free. The authors explain that pirating the study itself can be a criminal act in the U.S. and other countries, only to add: “For those who must have it for free anyway, you probably know where to look.”

Image courtesy of (CC-BY-SA) Flickr user nist6dh.

Related GigaOM Pro Content (subscription required):

  1. Interesting. Makes sense that if you price your products outside your consumers’ reach they’ll find other avenues to get your product.

    Share
  2. Price isnt the motivation,its the excuse. They pirate one song that is 99 cents on itunes. The reason pirating is booming because people think they are invisible online. You dont see people going into Borders and taking books, saying Im going to just take this because its too expensive. I wasnt going to buy anyway so its not really stealing.

    Share
    1. If this was a study regarding piracy in places like the USA or Canada you’d have a point.

      Share

Comments have been disabled for this post