Digital Piracy

Digital piracy, the unauthorized distribution of someone else’s copyrighted creative work for free over the Internet, is a rapidly growing practice and a very topical issue nowadays. A number of players in the creative industries in question see digital piracy as a grave threat to their business models and revenue streams, and hence are looking to mount a legal and ‘moral’ crusade to suppress the practice.

Opponents of digital piracy like to portray it as the ‘moral equivalent’ of the physical theft of goods. Personally, I have no interest in talking about ‘morality’ at all. Instead, I will examine the factual similarities and differences between the two phenomena: the physical theft of goods, and copyright-infringing digital piracy.

The main difference between the two phenomena is that with physical theft, the victim always loses something; while for digital piracy, this is not necessarily the case. The victim of digital piracy only loses something when the beneficiary of the digital piracy, the person that downloads the content for free, would have bought the content from its authorized distributor at the authorized price, had it not been for the availability of the pirated version. If this condition does not hold, and the beneficiary of the digital piracy would not have bought the content from the authorized distributor, even if the pirated version were not available, then the ‘victim’ of the digital piracy actually loses nothing. There wasn’t going to be a revenue stream from that consumer anyway. In fact, the creators of the content could well gain from the digital piracy in this case; for the addition of a new content-consumer, even if a non-paying one, has the potential to increase the indirect revenue streams accruing to the content creators (referrals to paying consumers, paid media appearances due to the increased fame, etc…).

With physical theft, none of these considerations matter. It doesn’t really matter whether the robber would have or wouldn’t have bought the Rolex he ends up stealing from a store, if stealing it was impossible. In either case, the store owner loses a piece of valuable property as a result of the theft.

This difference is significant because it has a bearing on the level of guilt that beneficiaries of these two kinds of actions will feel. The thief of physical goods, if he cares at all about the people he is stealing from, will experience some sympathetic pain as a result of his actions (feelings of guilt), because he will know that his actions have directly harmed those people. The beneficiary of digital piracy, if he thinks about it, will probably only experience some sympathetic pain if he knows that he would have bought the content from an authorized distributor, had there not been a pirated version. For those who would not have bought the authorized version in any case, there is no particular reason why they would feel any sympathetic pain as a result of downloading the pirated version, because they are not actually harming anyone.

This analysis suggests an approach that holders of copyrights could take to reduce the incidence of harmful digital piracy; one that would probably be a lot more fruitful than legal or moral crusading. They could strive to make their content more affordable and more conveniently available. This would serve to put more people in the first category of digital piracy beneficiaries; as more people would know that at the cheaper prices and more convenient access for the authorized version, they would have actually bought the content had it not been for the pirated version. It would also serve to narrow the affordability and convenience gap between the pirated and the authorized versions. Thus, more potential beneficiaries of digital piracy would feel sympathetic pain as a result of their contemplated action, and the monetary and convenience costs to be balanced against the benefit of avoiding this sympathetic pain would be lower. The result would be a reduction in the volume of pirated content, and an increase in the volume of authorized content, that consumers chose to acquire.

Creative content producers must recognize that they live in a new world. With the rise of the Internet and peer-to-peer distribution technology, copyright laws are simply becoming less and less enforceable. As such, the question of whether copyright laws are a good idea or not has largely become an academic one. Bombastic, over-exaggerated, moralistic campaigns against digital piracy are not going to convince many people to stop downloading pirated content. Only by really competing with the digital pirates on price and convenience will the content producers be able to protect their revenue streams in this new world. Whining about it endlessly doesn’t accomplish anything.