Massive Research Report On 'Piracy' In Emerging Economies Released; Debunks Entire Foundation Of US Foreign IP Policy

from the nicely-done dept

Joe Karaganis, from the Social Science Research Council was kind enough to reach out to me last week and send me an advance copy of the (somewhat epic) report that SSRC just released this week, exploring "Media Piracy in Emerging Economies." It's a rather massive 440 pages of research into a variety of issues having to do with infringement, specifically focused on emerging markets. While it was nice of Karaganis to send it to me, I was a bit disappointed to find out that they're not releasing the report for free (for most). Instead, it's released under a "Consumer's Dilemma" license, where they want people in developed countries to pay $8 for the report, but will offer it for free to those in less developed countries (though, it looks like Canadians can get it for free). Though, to their credit, at the end of the license info, they do note:
For those who must have it for free anyway, you probably know where to look.
Unfortunately, that's right under the warning that "non-compliance" with the license in the US could subject you to five years in prison and $250,000 in fines. That's an unfortunate exaggeration, as most non-compliance wouldn't result in criminal copyright infringement. For a report on the subject that seems so insightful in many points, it's disappointing that this report chose to reinforce this type of thinking. Update: Clearly, I missed that this is pure satire by the report's authors. Such is life when I'm so used to seeing such things that are real.

That said, much in the report is extremely forward-looking and thinking. It goes into great detail how fascinating and innovative new business models are appearing around the globe where "piracy" is rampant, and suggests that we really need to rethink the idea of "piracy" in those markets. It highlights how almost all of the policy discussions in the west concerning infringement focuses on "enforcement," but that may be the wrong way to go about it. The research, instead, points out that a better focus may be on setting up the structures for successful business models to emerge -- which include local firms who can compete on price:
Invariably, industry groups invoke similar arguments on behalf of stronger enforcement: lower piracy will lead to greater investment in legal markets, and greater investment will lead to economic growth, jobs, innovation, and expanded access. This is the logic that has made intellectual property a central subject of trade negotiations since the 1980s. But while we see this mechanism operating in some contexts in emerging markets, we think that other forces play a far larger role.

The factor common to successful low-cost models, our work suggests, is neither strong enforcement against pirates nor the creative use of digital distribution, but rather the presence of firms that actively compete on price and services for local customers. Such competition is endemic in some media sectors in the United States and Europe, where digital distribution is reshaping media access around lower price points. It is widespread in India, where large domestic film and music industries dominate the national market, set prices to attract mass audiences, and in some cases compete directly with pirate distribution. And it is a small but persistent factor in the business software sector, where open-source software alternatives (and increasingly, Google and other free online services) limit the market power of commercial vendors.
It also points out that focusing just on enforcement is a key mistake by western nations, when they might be much better served in enabling these markets to emerge to "compete" with infringement:
The centrality of pricing problems to this dynamic is obvious, yet strikingly absent from policy discussions. When it comes to piracy, the boundaries of domestic and international policy conversation are exceedingly narrow. The structure of the licit media economy is almost never discussed. Instead, policy conversations focus on enforcement--on strengthening police powers, streamlining judicial procedures, increasing criminal penalties, and extending surveillance and punitive measures to the Internet. Although new thinking is visible in many corners of the media sector, as companies adapt to the realities of the digital media environment, it is hard to see much impact of these developments on IP policy--and most particularly on US trade policy, which has been the main channel for the international dialogue on enforcement.

In our view, this narrowness is increasingly counterproductive for all parties, from developing-country governments, to consumers, to the copyright interests that drive the global enforcement debate. The failure to ask broader questions about the structural determinants of piracy and the larger purposes of enforcement imposes intellectual, policy, and ultimately social costs. These are particularly high, we would argue, in the context of ambitious new proposals for national and international enforcement--notably ACTA, the Anti-Counterfeiting Trade Agreement recently finalized by the United States, the European Commission, and a handful of other countries.

To be more concrete about these limitations, we have seen little evidence--and indeed few claims--that enforcement efforts to date have had any impact whatsoever on the overall supply of pirated goods. Our work suggests, rather, that piracy has grown dramatically by most measures in the past decade, driven by the exogenous factors described above--high media prices, low local incomes, technological diffusion, and fast-changing consumer and cultural practices.
That last paragraph is a key point that our current policy makers seem to miss entirely. On top of that, the report notes that nowhere in the discussions about enforcement is any discussion found of connecting enforcement to figuring out "how to foster rich, accessible, legal cultural markets in developing countries." Of course, that's because most policy makers don't care about that.

The report kicks off with a piece by Karaganis on the importance of "rethinking piracy." It notes that the industry claims on "piracy" are not exactly credible or trustworthy -- and not very productive towards coming up with solutions, since all they've done is "undermined confidence in the industry research enterprise." In fact, it goes through a rather complete debunking of the overall industry claims, suggesting that they're somewhat meaningless -- and then points out that all of these reports that count "ripple effects" seem to ignore the ripple effects in the other direction: the kind that benefit consumers, especially in developed nations:
But in extrapolating losses beyond the affected industries, these studies also introduce new problems. Fundamentally, they all misrepresent the relationship between piracy, national economies, and international trade. Consistently, none of them model the other side of the transaction--the consumer surplus--in describing overall economic impact. Two basic accounting problems have become emblematic of this approach.

First, domestic piracy may well impose losses on specific industrial sectors, but these are not losses to the larger national economy. Within a given country, the piracy of domestic goods is a transfer of income, not a loss. Money saved by consumers or businesses on CDs, DVDs, or software will not disappear but rather be spent on other things--housing, food, other entertainment, other business expenses, and so on. These expenditures, in turn, will generate tax revenue, new jobs, infrastructural investments, and the range of other goods that are typically cited in the loss column of industry analyses.
The report is chock full of other insightful points, such as noting that, "Predictably, raids scale more easily than due process." Later it goes through the various "education campaigns" that industry and governments have invested in, noting that they appear to have done "very little" to actually slow down the rate of piracy:
Our inquiries (mixing survey, focus group, and interview methods) found a remarkably consistent cluster of attitudes on piracy: (1) that it is often regarded with ambivalence by consumers, (2) that pragmatic issues of price and availability nearly always win out over moral considerations, and (3) that consumers know what they are buying. The classic scene of developing-world piracy--the kiosk or street vendor selling DVDs--produces very little misunderstanding on the part of consumers about the nature of the transaction. Consumers weigh tradeoffs between price and expectations of quality, but within a context of explicit black-market negotiation in which notions of fraud or deceptionóoften borrowed from anti-counterfeiting discourseógenerally donít apply. The price gap between licit and pirated media provides a clear signal of the origins of goods.
On top of that, the report responds to the regular claims by the IFPI and others that piracy is linked to organized crime and terrorism, by noting that they could find "no evidence" of any such connection. Similarly, it mocks policy makers who conflate counterfeiting with media piracy.

And that's all just in the first chapter! From there it first looks at the ongoing effort -- mainly driven by the US and the USTR -- to "harmonize" enforcement efforts, followed by a country-by-country look at the state of "piracy" in various developing nations, highlighting many of these issues in a more localized fashion. The whole report is really fascinating, and an incredibly useful read for policy makers who are so focused on things like ACTA, enforcement and industry claims of "losses." It really is a huge contribution to the research on these topics -- and something that I hope gets delivered to policy makers. I'd send copies to various politicians myself... if it weren't for that license that tells me I could face five years in jail for doing so. So, as a final note, I'll just suggest that Karaganis and the others behind this really excellent research report reconsider their license choice on the document (see update above), and instead encourage sharing of the document -- and maybe take a page from what they're seeing themselves in setting up creative new business models to cover any costs.


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    The eejit (profile), Mar 8th, 2011 @ 9:48am

    Just sent this to the Prime Minister. Let's see what he thinks of this intelligent report.

     

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    Ima Fish (profile), Mar 8th, 2011 @ 10:54am

    "Debunks Entire Foundation Of US Foreign IP Policy"

    The entire foundation of US foreign UP policy rests on the idea that the wealthy and powerful status quo should be allowed to collect on an ever increasing growth of government granted monopoly rents. The idea exists because this status quo gives tons of money to those running the government, e.g., political donations and cushy industry jobs upon leaving office.

    I highly doubt this foundation could ever be debunked.

     

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      The eejit (profile), Mar 8th, 2011 @ 11:25am

      Re:

      Then I suspect it's time to glue that revolving door shut. Stop Senators from joining any corporation, except in a voluntary capacity that is unpaid.

      That should solve a few issues.

       

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        chris (profile), Mar 8th, 2011 @ 1:39pm

        Re: Re:

        Then I suspect it's time to glue that revolving door shut. Stop Senators from joining any corporation, except in a voluntary capacity that is unpaid.

        i don't think it's senators who are the problem, but the vast complex of positions in government for which ex-corporate types occupy, such as regulators, which are appointed rather than elected positions.

        the senator problem in my opinion has mostly to do with lobbying.

        but rather than exclude someone from government based on previous employment, why not apply the restrictions that already apply to nonprofits with regards to private inurement?

         

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        Ron Rezendes (profile), Mar 8th, 2011 @ 3:02pm

        Re: Re:

        You would run smack into the same situation where college athletes "can't" be paid. Some of those athletes make more money in their college athletic career than they will when they end up taking a non-sports job once they graduate.

        The members of Congress and other professional legislators have perfected the art of hiding things from the public, I doubt this would be any different.

         

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    sagescape (profile), Mar 8th, 2011 @ 10:56am

    Licensing theater

    Mike, I think you missed SSRC's point on the licensing. As I write over on Legally Sociable, this is "licensing theater".

    If you doubt this read the SSRC's own characterization of the license:

    The Consumerís Dilemma license is a way of reversing that equation and, in the most minor ways, requiring an explicit engagement with it. Among the surreal aspects, that simple choice can subject you to crushing civil and criminal penalties, but you can rest easy knowing that only very rare, arbitrary examples will be made (and none in our case) [emphasis added].

    In other words, SSRC has no intention of suing anyone over this -- they say so themselves. Indeed, the entire report is over on Scribd, posted by a user named "urprobablyapirate". Wink wink. Nudge nudge.

    SSRC is just having fun with the copyright maximalists, but they are doing so in order to make a point:

    Our license has a theatrical side, to be sure, but it also stays true to the experiences documented in the report. Those experiencesĖthe personal choices and the market and price structure that informs themĖare the reportís primary subject.

     

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      Mike Masnick (profile), Mar 8th, 2011 @ 12:44pm

      Re: Licensing theater

      Mike, I think you missed SSRC's point on the licensing. As I write over on Legally Sociable, this is "licensing theater".

      Fair enough. I just don't like anything that reinforces that basic concept of ridiculous fines.

       

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    Anonymous Coward, Mar 8th, 2011 @ 11:08am

     

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    coldbrew, Mar 8th, 2011 @ 11:16am

    RE: wrong

    It's all FUD. No real research was done. You are either with the content cartel, or you are against them like sheep. Some AC will be here shortly to prove you (and the report) wrong by simply typing a few sentences.


    One more thing, FUD.

    :-)

     

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      Jay (profile), Mar 8th, 2011 @ 11:24am

      Re: RE: wrong

      Curses! You found us out! You "freetards" are a crafty lot, but we'll find you and we'll arrest you all.

      Soon, you'll be in jail with the other free loading hippies. You don't need due process! Your 1st amendment rights ended with the copyright clause!

      YOU. WILL. BE. PUNISHED.

      And your jail sentence shall pay for my new Lamborghini!

      -------------

      Brought to you in part, and paid for, by Fail Shill Industries. Copyrighted 2011.

       

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    Paula Martini, Mar 8th, 2011 @ 11:17am

    Launching, presenting and discussing the report at NYU

    For those in New York area, this Wednesday, March 9th at 5:30PM, NYU will host the launching event of the Media Piracy in Emerging Economies, the first independent, large-scale study of music, film and software piracy in emerging economies, focusing on Brazil, India, Russia, South Africa, Mexico and Bolivia.

    Five of the report's authors will present and discuss the results: Joe Karaganis (SSRC), Lawrence Liang (ALF India), Pedro Mizukami (FGV Brazil). Ronaldo Lemos (FGV Brazil), and Sean Flynn (PIJIP).

    More info: http://www.nyu.edu/ipk/events/154

     

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    DandonTRJ (profile), Mar 8th, 2011 @ 11:20am

    Just bought a copy. This should make a fascinating read. Thanks for plugging it, Mike.

     

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    TAM, Mar 8th, 2011 @ 11:36am

    Obviously statistical super-lative bias and non-homogenizing Riemann factors weren't taken into account, so the study is false.

    etc etc

     

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    duffmeister (profile), Mar 8th, 2011 @ 11:41am

    so how much for a license for congress?

    I wonder...... might have to spring for that or organize for it to be paid for.......

     

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    Anonymous Coward, Mar 8th, 2011 @ 12:29pm

    At least you fools will pretend it's real.

     

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      Nastybutler77 (profile), Mar 8th, 2011 @ 1:03pm

      Re:

      At least you fools will pretend it's real.

      And you head-in-the-sand neoluddites will pretend it's not, as your failing business model continues it's downward spiral.

       

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    Joe Karaganis, Mar 8th, 2011 @ 12:53pm

    The Consumer's Dilemma

    Mike: thanks very much for the kind words on the report. On the license, however, clearly one of us is missing the mark, and the fact that *you* come down this way gives me pause. So, a few comments: (1) If the $8 seems unreasonable, look for it elsewhere. We have gone to considerable lengths to make it easily available for free and have no enforcement mechanism (or intentions). You may violate the license in doing so, but the world is full of people violating dumb licenses to get something they want. Which is our point. (2) Policymakers fall into the non-commercial category, as do educational purposes of any kind, personal reading outside medium/large content shops, and the whole raft of usual exceptions and limitations. Think up a valid fair use case for yourself and indulge it. Send it to whomever you like. Or send the link to the $8 paywall and to the version on Scribd and make them decide. (3)The report is also about the wild divergence between the laws on the books and their actual application. US law is at the far end of this spectrum, with the NET Act in particular creating massive criminal liability for literally any receipt of unlicensed goods of value. Universal jeopardy, applied very arbitrarily and infrequently. That the context we're signalling. Maybe we should have added torture and the sacrifice of firstborn to achieve the full Swiftian effect, but the actual law seemed wild enough. But you may be right that we have to recalibrate. I go into this at some length at http://piracy.ssrc.org . We are considering setting up a Facebook support group for those willing to help others get the report for free, so help is on the way. Regards, Joe

     

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      Mike Masnick (profile), Mar 8th, 2011 @ 1:13pm

      Re: The Consumer's Dilemma

      Mike: thanks very much for the kind words on the report. On the license, however, clearly one of us is missing the mark, and the fact that *you* come down this way gives me pause.

      Agreed. I clearly missed the satire here. But perhaps that's because I'm so used to seeing these types of "licenses" and warnings that aren't satire. And, in general, I just dislike presenting things with a false claim that you could risk jail for passing it along.

       

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        Mike Masnick (profile), Mar 8th, 2011 @ 1:15pm

        Re: Re: The Consumer's Dilemma

        Also, updated the post to point to your comment.

         

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          Joe Karaganis (profile), Mar 8th, 2011 @ 2:02pm

          Re: Re: Re: The Consumer's Dilemma

          Thanks and, yes, we're on weird ground here. I do take from this exchange that we'll have to be more explicit about what we're doing. A couple other small notes on the issue of business models: the CD license very much practices what we preach in the report: local income-based price discrimination. It is also a business model of sorts, designed to test whether people in the US and other high income countries view $8 for a 'somewhat epic' report as fair. Or whether they'll ignore our rights claims and go to Scribd to save the price of two lattes. There are a lot of complicated expectations in play here, including what gets called a report vs. a book or ebook, how the CD license differs from a 'pay what you want' model, and even the resentment of the other getting things for free. For my part, I see it as a 'pay what you want' model, with the 'pay nothing' option shifted into the illicit market, which in turn raises ethical issues for those who care about IP rights. This is essentially the global media market we describe, aka the Consumer's Dilemma.

           

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            Jose_X, Mar 8th, 2011 @ 5:33pm

            Re: Re: Re: Re: The Consumer's Dilemma

            First, without reading the report, I appreciate the message it appears to be sending and the work done to support that message. I even approve of the licensing approach taken.

            However, in take 2, you might remove the Consumer's Dilemma for the majority of us.

            For example, allow people to come up with ideas to profit off this report and state you are willing to endorse those who contribute a little ka-ching back to help cover past costs and fund future efforts.

             

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            Jay (profile), Mar 8th, 2011 @ 6:55pm

            Re: Re: Re: Re: The Consumer's Dilemma

            *ahem*

            I'll be reading this shortly. I'd love to get the book.

            *whistles innocently*

             

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            Anonymous Coward, Mar 10th, 2011 @ 2:15pm

            Re: Re: Re: Re: The Consumer's Dilemma

            you know, the comparisons to cups of coffee in contexts like this have only ever served, to me, to reinforce how ridiculous the price of coffee is. (and, personal opinion based mostly on the fact that i can't stand the stuff, how silly it is that people are willing to pay it.)

            barely relevant, i know, but still.

             

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      Anonymous Coward, Mar 8th, 2011 @ 4:38pm

      Re: The Consumer's Dilemma

      Joe:

      I'm confused. Are you selling your report for $8 or not? Because you seem to be unable to decide. Instead, you confuse, inveigle, and obfuscate the issue as much as possible, which is a real turnoff for your potential customers.

      If you want people in first-world countries to donate $8 to your cause, then just say: "people in developing countries: suggested donation, $8." You might even get more money that way. And at least you're not obfuscating whether you're actually selling a report - you're being honest enough to admit that you're running a charity. That is, your donors (not customers) are getting warm fuzzies from donating money to you, they are not buying a report for $8.

      If you really are selling the report, but you're explicitly going to ensure there are no practical consequences for taking it without paying, then please provide rationale for why anyone, in any country, should buy your report.

       

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        Justin Olbrantz (Quantam), Mar 8th, 2011 @ 4:55pm

        Re: Re: The Consumer's Dilemma

        Are for-profit entities who sell stuff in stores but do not actively sue people for copying it (in other words, most people apart from the very large content companies with a fleet of lawyers on retainer) charities or businesses? Once you answer that you have your answer.

         

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          Anonymous Coward, Mar 8th, 2011 @ 5:24pm

          Re: Re: Re: The Consumer's Dilemma

          Seem to be more like charities to me.

          Let's say I come across two gas stations, each across the street from the other. Both have pumps that go into the same underground tank full of gas. One is selling gas for $8/gal, the other is giving it away for free, no strings attached.

          1. Why should anybody pay $8 for the gas?
          2. What would you call the person who would actually pay $8 for gas in that situation?
          3. If somebody does give the guy $8 and then pumps gas, is he really buying the gas?
          4. What would you call the owner of the gas station that is "charging?"

           

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            Justin Olbrantz (Quantam), Mar 8th, 2011 @ 5:30pm

            Re: Re: Re: Re: The Consumer's Dilemma

            This is an exciting revelation for a great many people. It means we can consider a large portion of what are presently "small businesses" to be charities, which will save them a bundle on taxes.

            Well, not so good for the government, which will take a big hit to the checkbook.

             

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              Anonymous Coward, Mar 8th, 2011 @ 5:34pm

              Re: Re: Re: Re: Re: The Consumer's Dilemma

              This is an exciting revelation for a great many people. It means we can consider a large portion of what are presently "small businesses" to be charities, which will save them a bundle on taxes.

              If those small businesses let you take the stuff, or have another business operating in the same exact location giving away the exact same stuff, then they're not selling stuff, they are giving stuff away for an expected donation.

              Why is it so necessary for these new business models to involve deceiving the customer/donor as to what they're actually getting in exchange for their money? What are people using them ashamed of?

               

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                Anonymous Coward, Mar 8th, 2011 @ 7:20pm

                Re: Re: Re: Re: Re: Re: The Consumer's Dilemma

                "Why is it so necessary for these new business models to involve deceiving the customer"

                No one is being deceived and the intent is not to deceive anyone. If someone gives money to a charity they're not being deceived. If they buy something, they're not being deceived. If they get something for free with the option of paying for it, they're not being deceived. Or if they take something for free and donate to the entity that is freely offering it, again, no one is being deceived. How the heck did you come up with the idea that anyone is being deceived? I guess it's one of those catch words that you hope can be used to confuse people.

                 

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                  Anonymous Coward, Mar 8th, 2011 @ 7:23pm

                  Re: Re: Re: Re: Re: Re: Re: The Consumer's Dilemma

                  (well, someone buying something might be being deceived. For instance, when people buy a product from Sony with certain reasonable expectations, they may find later that those expectations are not met. The product may have hidden rootkits or features may later be removed. But that's not relevant to your response).

                   

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            Jose_X, Mar 8th, 2011 @ 5:46pm

            Re: Re: Re: Re: The Consumer's Dilemma

            >> Let's say I come across two gas stations, each across the street from the other.

            Another analogy comparing intangible material (information) with scarce physical products (gasoline).

            Immediately, this means you will miss much of what techdirt argues because it will be meaningless to talk about adding tangible means to .. already tangible gasoline .. or allowing unlimited copying of the gasoline to instead sell scarce goods.

            And then you also fail to consider any services whatsoever and other value add-ons.

             

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              Anonymous Coward, Mar 8th, 2011 @ 5:47pm

              Re: Re: Re: Re: Re: The Consumer's Dilemma

              Fine, the pumps are connected to a shared, infinite reservoir of gasoline. Now what?

               

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                Anonymous Coward, Mar 8th, 2011 @ 7:24pm

                Re: Re: Re: Re: Re: Re: The Consumer's Dilemma

                Now everyone can get free gas and there is nothing wrong with it.

                 

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                  Anonymous Coward, Mar 8th, 2011 @ 9:58pm

                  Re: Re: Re: Re: Re: Re: Re: The Consumer's Dilemma

                  Now everyone can get free gas and there is nothing wrong with it.

                  Way to be non-responsive and avoid the issue. I asked four very simple questions:

                  1. Why should anybody pay $8 for the gas?
                  2. What would you call the person who would actually pay $8 for gas in that situation?
                  3. If somebody does give the guy $8 and then pumps gas, is he really buying the gas?
                  4. What would you call the owner of the gas station that is "charging?"

                  Can you answer any of the four?

                   

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                    Anonymous Coward, Mar 8th, 2011 @ 11:08pm

                    Re: Re: Re: Re: Re: Re: Re: Re: The Consumer's Dilemma

                    1. For the thrill? To get rid of a jar of pennies? Or for the maintenance of the pumps? That would be a service then, the gas is the infinite resource that brings in customers but is not what is sold - customers pay him for the service provided. Like Netflix, I guess, or iTunes. They have different pricing structures (monthly rate vs. per item pricing) but both are basically selling a service and convenience, not an infinitely reproducible good.

                    2. Uninformed? Ha! Someone who is either in a bind or actually thinks 8 bucks is okay to pay for whatever reason. The person is a paying customer, though, and should be respected as such no matter what. S/he shouldn't be burdened by any post-purchase shenanigans like the gas will only work for 3 miles and then s/he needs to call the station owner for permission to drive one more mile on his/her own gas. Or s/he can't siphon off a gallon for a stranded motorist unless she wants to get a legal threat letter demanding a couple thousand bucks, or anything like that.

                    3. See 1.

                    4. Out of luck once people start using new technology to draw their own gas, unless he develops other services or scarce goods to sell, they are seen as worth the price charged, and there's an actual market for whatever he comes up with in the first place.

                     

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                      ltlw0lf (profile), Mar 9th, 2011 @ 12:46pm

                      Re: Re: Re: Re: Re: Re: Re: Re: Re: The Consumer's Dilemma

                      2. Uninformed? Ha! Someone who is either in a bind or actually thinks 8 bucks is okay to pay for whatever reason. The person is a paying customer, though, and should be respected as such no matter what. S/he shouldn't be burdened by any post-purchase shenanigans like the gas will only work for 3 miles and then s/he needs to call the station owner for permission to drive one more mile on his/her own gas. Or s/he can't siphon off a gallon for a stranded motorist unless she wants to get a legal threat letter demanding a couple thousand bucks, or anything like that.

                      Real world application, which also involves a gas station.

                      Here in San Diego, CA, gasoline is an average of $3.85 a gallon. Down the street from where I work, there are three gas stations. A Thrifty gas station with a price of $3.91/gallon, a 76-station with a price of $4.29/gallon, and an Arco with the price of $3.85/gallon. These gas stations are a block or two away from each other, and their prices are clearly marked on the road (I can see the prices for all three stations while driving down the street.)

                      I stop at the Arco station that sells gas for $3.85/gallon, and fill up my tank. The gas station is busy, and there is usually a line, but it has 12 pumps, so people usually get out in about 10-15 minutes. The Thrifty station has 8 pumps, and there is sometimes a line, but usually people can get out of there in 10 minutes. The 76-station has 6 pumps, and every single time I drive by there is someone at 4 or 5 of those pumps, and the people there can get out in 5 minutes.

                      Sure, any economics major can point to this being laws of capitalism in action, the guy with the cheapest gas is going to have the most users, but in your example, no one in their right mind would ever go to the expensive place. However, that is because you value money more than you value time, and those who are going to the expensive gas station value their time more than they value money.

                      Likewise, if gasoline was an infinite resource, you'd still find people paying $8 for it, because they wouldn't have to wait in a long line to get the free gas. To them, the time wasted in waiting for the free gas is more expensive than paying for it. The copyright maximalists view this as an argument against giving a product away for free, because nobody would ever buy it, but in reality, where the rest of us live, plenty of people would buy it even if there are free alternatives available, and usually for reasons that "freetards" (I cannot stand that term, but it is all the copyright maximalists understand) and copyright maximalists cannot fathem.

                       

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            Karl (profile), Mar 15th, 2011 @ 9:33am

            Re: Re: Re: Re: The Consumer's Dilemma

            I'll take a crack at this.

            1. Why should anybody pay $8 for the gas?

            Perhaps the station that charges $8 provides more services than the one that is free. Perhaps the $8 gas station has high-octane gas or deisel, and the free one only offers standard. Perhaps the free gas station has a long line that requires a half-hour wait, and the other doesn't. Perhaps the free gas station has annoying advertisements that blare in your ear from the gas pump. Or perhaps they just want to support the owner of the $8 gas station.

            There are all sorts of reasons.

            2. What would you call the person who would actually pay $8 for gas in that situation?

            A paying customer. Possibly a repeat customer. The kind you want to covet and hold on to, and not ban from your gas station every time they're short on cash and go to the guy across the street.

            3. If somebody does give the guy $8 and then pumps gas, is he really buying the gas?

            Unless he has to return it somehow, or unless it's designed to turn to water in a few days, then he's actually buying the gas. He may not be paying only for the gas itself (see #1), but he bought it.

            4. What would you call the owner of the gas station that is "charging?

            If he's turning a profit, you would call him a successful businessman.

            At the moment, the situation is the reverse with media. Getting a paid version is more inconvenient, you have fewer choices of formats, DRM means you can't use it in all devices, and you don't own the media once you pay for it. On top of being free, the pirated version is simply a better product.

             

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        Joe Karaganis (profile), Mar 9th, 2011 @ 6:51am

        Re: Re: The Consumer's Dilemma

        To repeat: we are selling the report for $8 (or $2000) in high income countries. We take our rights (and the ability to successfully commercialize work) seriously, so we no reason to adopt a donation model. Whether this approach is a profitable strategy or not depends on a number of things, including the perceived value of the work, the collective conversation about what books should cost ( There are no practical consequences to pirating it because (1) the cost/benefit ratio for enforcement is way too low; (2) we benefit from the network effects of widespread circulation through all channels, and so decided to take that process of diffusion into our own hands.

        In this respect, we operate very much like the software companies we describe in the report: strong assertion of rights, high toleration of piracy, and calibration of licenses to whatever the market will bear.

         

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          Joe Karaganis (profile), Mar 9th, 2011 @ 6:56am

          Re: Re: Re: The Consumer's Dilemma

          Reposting since a 'less than' sign cut off part of the comment

          To repeat: we are selling the report for $8 (or $2000) in high income countries. We take our rights (and the ability to successfully commercialize work) seriously, so we no reason to adopt a donation model. Whether this approach is a profitable strategy or not depends on a number of things, including the perceived value of the work, the collective conversation about what books should cost, and the willingness of high income and especially 'commercial' readers to honor the license.

          There are no practical consequences to pirating it because (1) the cost/benefit ratio for enforcement is way too high; (2) we benefit from the network effects of widespread circulation through all channels, and so decided to take that process of diffusion into our own hands.

          In this respect, we operate very much like the software companies we describe in the report: strong assertion of rights, high toleration of piracy, and calibration of licenses to whatever the market will bear.

           

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          nasch (profile), Mar 9th, 2011 @ 5:32pm

          Re: Re: Re: The Consumer's Dilemma

          I think your joke, or whatever it was, about enforcement and penalties really muddied the water. You're basically saying (unless I'm STILL misunderstanding): "You thought we were serious? No, we know $250,000 is ridiculous! Yeah, we're serious about the rest of it."

          I think if you were going to claim copyright and charge money for infinite goods, you should have just played it straight the whole way with the license.

           

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    BigKeithO (profile), Mar 8th, 2011 @ 2:29pm

    Free for Canadians

    ...they want people in developed countries to pay $8 for the report, but will offer it for free to those in less developed countries (though, it looks like Canadians can get it for free).

    The study received funding from the Canada's International Development Research Centre, perhaps that is why Canadian's get it for free?

    We don't get much for free up here so we'll take whatever we can get!

     

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    Wiley, Mar 8th, 2011 @ 2:32pm

    Yeah, right...

    More ridiculous dreck from Tech Dreck.

     

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    David Sanger (profile), Mar 8th, 2011 @ 2:46pm

    The Social Science Research Councilís study is a landmark in the copyright literature: an actual empirical investigation into what works and what doesnít in the enforcement arena. If policy makers want to be guided by evidence and not rhetoric, they will begin with the Councilís study and stay with it for a very long time.

    ó William Patry, senior copyright counsel, Google

     

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    identicon
    Anonymous Coward, Mar 8th, 2011 @ 4:25pm

    About taxes, the government taxes corporations almost 50%, 1% of the population holds almost all the wealth but don't actually contribute half of the taxes (Source), the 0.01%(the super-rich) contribute even less and the government actually can't make them pay more because they can just move to other countries, so why the government defend those people?

    Want more taxes? make a way that people on the bottom 95% of the population can earn more and for that to happen monopolistic rights have to go away.

     

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    Dyrral, Mar 8th, 2011 @ 6:02pm

    Lies, All Lies

    This whole thing doesnít exist. Go away.

     

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    Anonymous Coward, Mar 8th, 2011 @ 10:47pm

    we have seen little evidence--and indeed few claims--that enforcement efforts to date have had any impact whatsoever on the overall supply of pirated goods

    I didn't read the full report (sorry, I don't have $8 virtual to get it), but I have to ask:

    Did anyone both to look at the incredible impediments in the legal system which make enforcement online extremely difficult and slow, when compared to the speed of the act itself?

    I think that the anonymous nature of the internet and "internet speed" needs to be addressed in law. The current circumstance is untenable, and suggesting that throwing up our collective hands and walking away from business seems to be a very short sighted way to look at things.

     

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      Anonymous Coward, Mar 8th, 2011 @ 11:21pm

      Re:

      Seriously?

      Heaven forbid business should do what it should and react to what the MARKET IS TELLING THEM IT WILL PAY FOR.

      "The current circumstance is untenable" because instead of focusing on serving their market they are fixated on maintaining monoply rents - a status quo center that cannot hold.

      The adage really is true: adapt or die. Failure to adapt to what will not change is all they've been doing. That is the blueprint for running a business onto the killing rocks.

       

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      The eejit (profile), Mar 9th, 2011 @ 4:48am

      Re:

      But when your business model is failing, and failing hard, then perhaps the problem lies with you.

      IF you whine on and on About the Drama llama, and when people give you advice, if you don't at least consider it, then what's the point in trying to help you help yourself?

       

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    identicon
    Josh Taylor, Mar 9th, 2011 @ 7:03am

    So, owning copyrighted will land you in prison. You see people, God doesn't want us to live for corporate necessities, he wants us to live for him. To Worship Him, We must shun all corporate necessities, that includes food, clothing, and shelter. One day, we will live in Heaven with the Lord where there is no corporate necessities whatsoever.

    Till then, you all need to start living in the woods and survive by fishing with your bare hands and eat wild berries, fungi, and cacti.

    True Christians (TM) don't need corporate necessities.

    Amen.

     

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      ltlw0lf (profile), Mar 9th, 2011 @ 12:52pm

      Re:

      Till then, you all need to start living in the woods and survive by fishing with your bare hands and eat wild berries, fungi, and cacti.

      I was reading this and going, damn, one of these guys. Then I got to this line. You sir, are a god among men. You are a true troll worth worshiping.

      I think Dark Helmet may have met his match.

       

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    Eo Nomine, Mar 12th, 2011 @ 2:15pm

    Joe, I'm seriously unable to reconcile this statement:

    "To repeat: we are selling the report for $8 (or $2000) in high income countries. We take our rights (and the ability to successfully commercialize work) seriously, so we no reason to adopt a donation model."

    With this statement:

    "(1) If the $8 seems unreasonable, look for it elsewhere. We have gone to considerable lengths to make it easily available for free and have no enforcement mechanism (or intentions). You may violate the license in doing so, but the world is full of people violating dumb licenses to get something they want. Which is our point. (2) Policymakers fall into the non-commercial category, as do educational purposes of any kind, personal reading outside medium/large content shops, and the whole raft of usual exceptions and limitations. Think up a valid fair use case for yourself and indulge it. Send it to whomever you like."

    And this statement:

    "For my part, I see it as a 'pay what you want' model, with the 'pay nothing' option shifted into the illicit market"

    So you take your rights seriously, but openly advise people that you won't enforce those rights and breaching the license will have no consequences. You say you saw no reason to adopt a donation model, but then characterize this as a pay what you want model, which IS a donation model.

    Personally, I have no objection to any of those models, but you need to PICK ONE. You're seemingly talking out of both sides of your mouth here; either you take your rights seriously and at the very least don't encourage flagrant breach of those rights, or you waive the rights and say have at it. By saying you take these rights seriously but acting like you don't, you're sending seriously mixed and conflicting messages, which in turn undermines how seriously one can take this study.

     

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      Anon, Mar 15th, 2011 @ 9:46am

      Re:

      I'm having a hard time understanding what issue you guys are having with the seeming hypocrisy of the "pricing structure."

      *Official stance:*
      We are selling this report to people in high-income countries for $8. However, we feel the information is important to everyone, so it will be made available for free to people in low-income countries. Anyone expecting to use the report for a commercial reason will need to pay more.

      *Unofficial stance:*
      These kinds of licenses are ridiculous and essentially unenforceable on an individual basis due to economic impracticality. Furthermore, it is basically expected that we include one (and we wouldn't mind the money).

      Because of this tiered structure, we expect that the market will illustrate what we are reporting---a) people will pay what they think it's worth, b) if you don't price something right and there's a free version floating around, most will probably flock to the free version instead of abstaining from the content.

       

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    Shawn (profile), Mar 15th, 2011 @ 8:31am

    More Than Just Piracy

    One thing that is missing is that the record companies don't want just to end piracy, they want to use DRM to gain a monopoly on all the world's music.

     

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    Tom The Toe, Mar 31st, 2011 @ 7:38am

    Download the PDF

    I don't understand what the fuss is about. I went to the link and downloaded it for free. went to http://piracy.ssrc.org/
    click the link for free upgrade.

     

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