Poor countries have more piracy because media costs too much — report

Media Piracy in Emerging Economies, an academic report on pricing and copyright infringement in poor countries, comes to the conclusion that high media prices (as measured against the average wage in poor countries) are responsible for piracy — that is, when you control for social attitudes towards copying, enforcement differences, and so on, the largest predictor of whether a country will have rampant copyright infringement is whether the media in that country is priced high relative to peoples’ earning power.

To make their point, the authors have released the report under a provocative “Consumer’s Dilemma license” that charges escalating rates depending on whether your IP address is in a rich or poor country (I wrote about this here last week).

* Prices are too high. High prices for media goods, low incomes, and cheap digital technologies are the main ingredients of global media piracy. Relative to local incomes in Brazil, Russia, or South Africa, the retail price of a CD, DVD, or copy of MS Office is five to ten times higher than in the US or Europe. Legal media markets are correspondingly tiny and underdeveloped.

* Competition is good. The chief predictor of low prices in legal media markets is the presence of strong domestic companies that compete for local audiences and consumers. In the developing world, where global film, music, and software companies dominate the market, such conditions are largely absent.

* Antipiracy education has failed. The authors find no significant stigma attached to piracy in any of the countries examined. Rather, piracy is part of the daily media practices of large and growing portions of the population.

* Changing the law is easy. Changing the practice is hard. Industry lobbies have been very successful at changing laws to criminalize these practices, but largely unsuccessful at getting governments to apply them. There is, the authors argue, no realistic way to reconcile mass enforcement and due process, especially in countries with severely overburdened legal systems.

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