Flip over for the CSU-Pueblo Today Summer/ Fall 2012 Issue
Examining Theft on the Vast Seas of the World Wide Web
eporting Public Affairs Staff Adviser
Editor in Chief
Molly Cotner Design Editor
Nikki Martinez Copy Editor
Reporting Public Affairs Online Piracy
T able of Contents 4. Copyright: The Basics 6. A History of Copyright Law
Controversial Bills Combat Online Piracy
10. Mega Upload Walks the Plank
12. Understanding the Pirate Mind
14. Piracy by the Numbers Infographic A Pirate’s Life 16. Students: is the Life for Me
18. Justifying the Act of Piracy
20. Piracy’s Harm to Business
22. PiracyWorldwide: China
24. The Anti-Piracy Law Threat to YouTube 27.
Companies and Piracy: The Hunt for Common Ground
by R o
se W ambsganss
29. The Future of Piracy: Our View Reporting Public Affairs Online Piracy
Copyright Law: The Basics
By Chelsea Reese
he faction of online pirates has largely increased throughout the years of the Digital Age and has become a topic of large controversy, namely the Stop Online Piracy Act and Protect Intellectual Property Act protests earlier in January, between those that facilitate the act of pirating and subsequently those who are often hurt by the action of pirating, and subsequently those who succumb to the temptation of pirating. Pirating copyrighted works is illegal anyway it’s spun, but there are grey areas that can potentially confuse those who are faced with a decision to use a creative work from a separate author. The general rule of thumb is that all creative, intellectual works are copyrighted once created and are then legally protected, according to information on the University of Colorado System website. “Just about any expression of an idea is covered by copy-
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right, including text, photographs, art, graphics, music, and software. Copyright does not protect works that: lack originality, are in the public domain, are freeware, are US government works, are facts, or ideas, processes, methods, and systems described in copyrighted works,” according to the website. This means the songs people download are copyrighted, the movies people go to the theaters to see are copyrighted, the software programs students want to buy are copyrighted and the sculptures featured in the backgrounds of movies
“Violation of copyright law is also considered a federal crime when done willfully with an intent to profit.” are copyrighted. Permission to use copyrighted works is required by the author in order for its use to be legal and lawsuit-free. As of March 1, 1989, warnings and symbols are not required to identify these copyrighted works, and those who infringe on copyright law, or “pirate” works of expression, are violating civil law and could face lawsuits and hefty fines, according to the UCS website. “In a civil suit, an infringer may be liable for a copyright owner’s actual damages plus any profits made from the infringement,” according to information on chillingeffects.org, a website that provides explanations of the law. “Violation of copyright law is also considered a federal crime when done willfully with an intent to profit. Criminal penalties include up to ten years imprisonment depending on the nature of the violation,” according to the site. The widely-known case of Napster v. A&M Records occurred in 2001, and the peer-to-peer file sharing site Napster was sued by the record company on the grounds that the site was stealing music and allowing users to download it illegally, according to information on copyinfringementcases.org. Napster lost the lawsuit that resulted in the company paying out $26 million in fines and being forced to shut down the website. In a case of art work pirating, the sculpture “Ex Nihilo,” created by Frederick Hart and on display at the Washington National Cathedral, was featured in the film “The Devil’s Advocate,” where its naked figures came to life in an erotic way. Hart and the WNC claimed it was a disgrace to the art’s biblical meaning and they sued Warner Bros., according to information found on benedict.com. The verdict was in favor of Hart and the cathedral and even though the film was ready for distribution, Warner Bros. was required to alter the sculpture’s appearance in the film for future viewers and print a warning notice that stated Hart and the WNC did not endorse the scene on the cur-
rent videocassettes. To put it more simply, piracy is a crime. Notice the warning screen that appears before every movie anyone has ever watched; there are consequences that follow the act of copying and utilizing information illegally, and doing so is a risk people take in order to get their goods free of charge and quick in manner. “any unauthoriezed copying, editing, exhibition, renting, exchanging, hiring, lending, public performance, diffusion and/or broadcast of this dvd-video or any part thereof is strictly prohibited and any such action establishes liablity for civil action and may give rise to criminal prosecution,” according to a warning screen. However, there are legitimate ways to use copyrighted works. First and foremost, is to purchase it from a legal vendor or rent it from a licensed establishment. “Reading a book from the library, listening to music from a CD you’ve purchased, and watching a DVD you’ve rented are all legitimate personal uses of copyrighted works,” according to the UCS website. Another exception occurs if it qualifies for “fair use,” or when the copyrighted material is used for the purpose of teaching, criticizing, research, news reporting and scholarships, according to information on University of Denver Strum College of Law’s website. Also, use of copyrighted works is OK when it enters the public domain. This happens when the work’s copyright expires. “Copyright of all works published in the United States before 1923 have expired; the works are in the public domain. Works published after 1922, but before 1978, are protected for 95 years from the date of publication,” according to nolo. com, a legal information website. “If the work was created, but not published, before 1978, the copyright lasts for the life of the author plus 70 years.” If the work is created after 1978 and it doesn’t qualify for fair use, then it is considered copyrighted material and is illegal to use without permission. © Graphic courtesy of fbi.gov Reporting Public Affairs Online Piracy
American Copyright Law: A History By Katherine MacLeod To understand the issues surrounding the problems between media corporations and pirates that download music, movies, and programs from various sources online, may require an understanding of where and how the copyright laws originated. In the book “Authors and Owners: The Invention of Copyright,” author Mark Rose described the first instance of a statute that made copyright a legal and governmental matter rather than one that fell to the people. The “Statute of Anne” is a document earlier enacted by Parliament in Great Britain in 1710. It copied restrictions that had been stated in the Licensing Act. The restrictions were then enforced by the Stationers’ Company, a guild of the time, was the only group that could legally print literary works. The Statute of Anne was also the first document to refer to those who infringed upon copyright as “pirates.” The combination of the Stationers both censoring and monopolizing the printing industry led to authors and consumers fighting to prevent it being re-authorized. After years of the Stationers fighting to preserve their sole rights to print, Parliament decided against re-authorizing the system. The Statute of Anne was then altered so that a copyright had to be renewed every 14 years instead of every two years, as it had been previously, and the author of a work had the right to select who would print it, giving only the selected company and the author rights to the work.
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If the copyright was not renewed after 14 years, then the work would become public domain, meaning it was free for all to use and produce. The idea of copyright entered the constitution in much the same form, though was gradually starting to extend further into things other than books, most noticeably in the form of patents. This wasted no time in affecting the future copyright of all media, with Thomas Edison’s invention and subsequent patent of the Kinetoscope, the first device created to view moving pictures, was fully developed by 1892. By 1894, his first motion picture had been copyrighted, known best by its name of “Fred Ott’s Sneeze,” according to Million and One Nights: A History of the Motion Picture Through 1925 by Terry Ramsaye. The Motion Picture Patents Company, also known as the Edison Trust, was formed in 1908 and standardized the way films were distributed and exhibited. Edison made it so that anyone not using his company’s machines and films for exhibitions would be subject to litigation, and sued his competitors. Anyone outside the Trust in North America who had ambitions regarding the new invention had to relocate to the west coast, and those who did found themselves settling with other likeminded people in the town of Hollywood. Eventually this would set the groundwork for the Hollywood that we know today, a place that only exists because
the original fathers of cinematography wanted to be able to make movies without the limitations imposed on them by copyrights and patents. According to Tim Dirks, the writer and editor of filmsite. org, the first Hollywood studio was Nestor Motion Picture Company, but the first to make a motion picture there was D. W. Griffith, who in 1910 made his film “In Old California.” It only took a few short years for Hollywood to become the nation’s capitol of movie making, and many film companies sprang up including Warner Bros., Paramount, and Columbia, which we still recognize today. It is difficult to find any early records of illegal distribution. It wasn’t until 1984 that a clear court case surfaced again with regard to U.S. use of media. Sony Corp. of America v. Universal City Studios, Inc. was a case in which the Supreme Court ruled that it was legal to make copies of television shows to be watched at a later date, and that manufacturers of home video recording devices, in this particular case referring mostly to Sony’s Betamax, were not liable for copyright infringement. No other copyright infringement case surfaced until the first ever peer-to-peer file sharing court case, A&M Records v. Napster in 2001. Napster was found guilty because they were providing the service and knowingly leading people to infringe standing copyrights. In more recent cases the hosting sites are usually free from fault because the sharing is directly peer-to-peer. The Recording Industry Association of America has started to try to go after individual users instead of entire websites. The RIAA doesn’t have any pattern for who they take to court; the first case to try to make it to the supreme court involved a girl named Whitney Harper, trying to claim “innocent infringer” for 37 songs she shared between the ages of 14 and 16 using Limewire. The RIAA demanded $27,500 in total, $750 per song. Harper stated she did not understand that she was infringing copyright law, which would have brought down the fine to $200 a song. According to David Kravets’ article on arstechnica.com Harper was one of 20,000 individuals that the RIAA has taken to court relating to file-sharing music. More recently, though the legal cases with individuals are still ongoing, lobbyists have started pushing blanket administration against piracy in an attempt to combat it. PIPA, fully titled as “Preventing real online threats to economic creativity and theft of intellectual property act of 2011” was introduced to the U.S. Senate on May 12, 2011.
The Stop Online Piracy Act, fully titled was introduced later that year on Oct. 26, 2011. SOPA was proposed by Congressman Lamar Smith of the 21st district of Texas, while PIPA was introduced by Senator Patrick Leahy, the U.S. Senator for Vermont and both bills were made to give copyright holders more power to protect their copyrights from being shared on the Internet. PIPA requires any funders or advertisers working with an offending website to pull their support and services, as well as for the website’s provider to remove service, disabling it and giving enforcers the ability to punish any sites that might still reference or link to the offending site. SOPA gives government the direct ability to remove websites after they have offended and if necessary the ability to censor the internet access of Americans completely, only allowing access to websites that have been approved. On Jan. 18, people protested both of these acts, and several websites including Wikipedia, Reddit, and Memebase pulled down their websites entirely while others such as Google and 4Chan blacked out their logos or pages and showed notes and information about PIPA and SOPA. Internet users across the country called their congress representatives, swaying the numbers from 80 supporters and 31 opponents of SOPA/PIPA on Jan. 18, to 65 supporters and 101 opponents on Jan. 19. ACTA is the Anti-Counterfeiting Trade Agreement and was drafted April 15, 2010, and then revised to its final state on Nov. 15 2010. ACTA is a multinational treaty for establishing international standards regarding property rights. It not also counterfeit goods and generic medicines. This would mean that legally the only thing that acted like Tylenol and had the same active ingredient would be Tylenol. ACTA would also allow the Internet use of any individual to be tracked without that person’s knowledge. Supporters say that ACTA is an attempt to protect intellectual property, but opponents insist it flies in the face of freedom of expression and privacy, and that it would make it to easy to create a monopoly on things such as medication, and therefore, there would be no price control. ACTA has been signed by the United States, Australia, Canada, Japan, the European Union, Morocco, New Zealand, Singapore, and South Korea, and currently needs to be ratified by six more countries to become active. © Image courtesy of federalregister.gov Reporting Public Affairs Online Piracy
Controversial Bills Combat Online Piracy In 2011, a pair of bills aimed at ending piracy were proposed to the U.S. House of Representatives and Senate. The bills did not go undisputed.
By Jessica Rojas
exas Senator Lamar Smith presented the Stop Online Piracy Act to the U.S. House of Representatives Oct. 26, 2011. The Protect IP Act was introduced in the Senate by Senator Patrick Leahy of Vt. May 12, 2011. The purpose of the bills is to fight the ongoing battle against online piracy facilitated by sites originating outside the U.S. Although the targets were foreign websites, the way the bills were worded would affect the Internet in ways that critics described as unconstitutional and infringing. Shocklee.com, a multimedia production and new media company run by architect Hank Shocklee, specializes in the future of music, film and media. Shocklee explained on his website why he believes SOPA and PIPA should be considered unconstitutional. “These bills make website owners responsible and punishable for how users interact with their sites. The language of these bills can be easily manipulated and abused, resulting in many websites being severely limited or blocked.” Shocklee said the First Amendment set forth the Prior Restraint Doctrine, which means the government can’t censor media before it is published, but it can immediately censor after publication if any material is found in violation of the doctrine. Internet sites are already in compliance with the Digital Millennium Copyright Law, which holds sites responsible for censoring material after it has been published. “YouTube can’t pre-censor absolutely all copyrighted material, but it can take down videos one by one after they’re posted,” Shocklee explained. SOPA and PIPA would do away with the restrictions set
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in place by the Prior Restraint Doctrine which would then make “websites responsible for pre-censorship of any illegal or copyright material,” Shocklee said Another issue with the wording of SOPA and PIPA is how the bills classify domain names as domestic or foreign Shocklee said. SOPA and PIPA target foreign sites, however, the way the bills define foreign sites is incorrect. According to Shocklee, SOPA and PIPA classify foreign sites as those that end in, “.ily” or “.it”. Some sites such as redd.it and bit.ly are not foreign at all; they are actually domestic sites. Sites that end in “.com”, “.org” or “.us” are what SOPA and PIPA define as domestic, but sites such as wikipedia.org and thepiratebay.org are foreign. This misconception of information is what Shocklee considers a main issue with the bills, as well. The Internet was a buzz on Jan. 18, 2012 when sites such as Wikipedia and Google protested the bills. Wikipedia displayed its stance against the bills by having their site go dark for 24 hours. YouTube titled Jan. 18, 2012 as “SOPA-PIPA Awareness Day,” and Google showed its support by displaying a black censor strip doodle on its homepage logo. CNET News, a tech media website, reported that much of the Internet industry and a large percentage of Internet users opposed SOPA and PIPA. “On November 15, Google, Facebook, Twitter, Zynga, eBay, Mozilla, Yahoo, AOL, and LinkedIn wrote a letter to key members of the U.S. Senate and House of Representatives, saying SOPA poses ‘a serious risk to our industry’s continued track record of innovation and job creation, as well as to our nation’s cybersecurity,’ according to CNET News.
Yahoo has reportedly quit the U.S. Chamber of Commerce over the organization’s enthusiastic support for SOPA.” Smith argued SOPA would not infringe on anyone’s rights or be unconstitutional. “The Stop Online Piracy Act works by cutting off the money to foreign illegal sites and making it harder for online criminals to market and distribute illegal products to U.S. consumers,” he explained to CNN in January. The bill includes provisions that “follow the money” in order to cut off the main source of revenue to these sites and also protects consumers from being directed to foreign illegal websites through search engines placed on domestic sites, Smith said. “Entire domains can be blacklisted if any part of the site is found in violation,” and therefore the provisions of the bills are wrong, Shocklee said. SOPA and PIPA both propose the censoring of service providers. SOPA states that sites with payment network providers such as PayPal need to be censored, while PIPA states that financial transaction providers, which are the same as payment network providers need to be censored. The wording of the bills would “qualify any holder of intellectual property who is harmed by the activity of a foreign infringing site as a plaintiff,” Shocklee said. SOPA and PIPA state respectively: “The owner or operator of the site is committing or facilitating the commission of
criminal violations”, and “The site is used or has been designed by its operator primarily as a means for engaging in, enabling, or facilitating the activities of copyright infringement or counterfeit products.” Those excerpts from the bills, mainly the transpose of “facilitating,” are what critics say is bad wording. “This vague language found in both bills leaves this legislation open for abuse,” Shocklee said. Both bills are currently stalled. Smith stated on a press release, “The problem of online piracy is too big to ignore.” The theft of America’s Intellectual Property costs the U.S. economy more than $100 billion annually and results in the loss of thousands of American Jobs.” After the stalling of the bills, Smith also stated that he took seriously the critics concerns and that “revisions would be looked into.” The day the bills were stalled, Representative of California Darrel Issa announced his alternative to the bills; the Online Protection and Enforcement of Digital Trade Act. His act would shift the power of regulation from the hands of the U.S. Justice Department, as SOPA and PIPA had stated, to the hands of the International Trade Commission. “Placing that responsibility in the hands of one entity, rather than the whole court system, would make the process more transparent,” Issa said. He said he believes his bill would lead to a better chance of reaching a consensus. Other bills are also being formulated in hopes of addressing the issue in a way that does not constrict or harm the Internet.© Photo manipulation by Jessica Rojas Reporting Public Affairs Online Piracy
MegaUpload Walks By Rose Wambsganss
Harm Caused $500 MILLION Site Income $175 MILLION Site Fees $500 MILLION Dotcom’s Salary $42 MILLION 10
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the Plank Heavily armed police and some antiterrorist crews arrested Kim Dotcom, MegaUpload’s founder, and his associates Jan. 10. The arrests were a result of a two-year FBI investigation.
egaUpload was a file sharing cloud that helped users store and access data from any computer or location. The MegaUpload case is among the largest of all criminal copyright cases brought by the United States, according to a United States Department of Justice press release. The indictment alleges that MegaUpload reproduced and distributed copyrighted material without permission over the Internet, including movies, videogames, music, TVshows and e-books. Along with Dotcom, six other MegaUpload employees were also named in the indictment, including: Mathias Ortmann, co-founder; Finn Batato, chief marketing officer; Julius Bencko, graphic designer; Sven Echternach, business development manager; Andrus Nomm, software programmer and head of the development software division and Bram Van Der Kolk, who oversaw programming and the underlying network structure. “The individuals and two corporations, MegaUpload Limited and Vestor Limited, were indicted by a grand jury in the Eastern District of Virginia on Jan. 5 and charged with engaging in a racketeering conspiracy, conspiring to commit copyright infringement, conspiring to commit money laundering and two substantive counts of criminal copyright infringement,” according to information in the press release. Dotcom was running an international criminal organization called a mega conspiracy by the FBI in the indictment. Each MegaUpload employee faces a maximum penalty of 50 years in prison if convicted of all charges. It is unknown how long it will take to sentence all parties charged in the indictment.
In the next few years the case will unfold, setting a precedence on how the FBI will handle copyright infringement. File sharing website users will also have some idea as to what they can do to protect the data they have stored in clouds and file sharing networks. Although the fate of MegaUpload is unknown, other file sharing sites are not waiting to find out. The aftermath brought threats of lawsuits, and other file sharing sites closed in fear that they will face similar charges. Hackers retaliated by blacking out the Justice Department and Universal Music websites. ABC reported that one hour after the indictment was an anounced, the Justice Department’s website, www.justice. gov, went under cyber attack. Information posted in varying areas on the site was blacked out and unavailable to site users. “Anonymous, the hacktivist computer group, claimed responsibility,” according to information posted on ABC’s website. “The FBI’s website also went black for about an hour,” ABC reported. “The websites for the Recording Industry Association of America, Universal Music and the Motion Picture Association of America also appeared to be unavailable or under attack.” When MegaUpload shut down, an estimated 180 million user files went down with it. Some of those users were accessing materials that were in violation of copyright law, but some were not, according to the indictment. Information found in an FBI press release stated they released the confiscated data back to MegaUpload’s server host, Carpathia. Carpathia is trying to assess the extent of the lost data by offering former MegaUpload users an area to stake their claims on what information they have lost. Carpathia will not comment on when or if they will provide the files to MegaUpload users and claims to not have any user’s files. There are many companies listed as third parties to the
mega conspiracy, including Carpathia Hosting, Cogent Communications, Leaseweb, PayPal, Moneybookers Limited, AdBrite, Inc. and PartyGaming Place, according to the indictment. Any of the third party companies could be listed in a joint civil action backed by MegaUpload legitimate users, but the current focus is on bringing a lawsuit to the federal government, according to information found on TechDirt.com, an Internet rights reporting website. MegaUpload users are not alone in their frustrations. News of arrests, seizures, extraditions and jail time has panicked other file sharing sites into closing and others to reconsider operating in North America. Torrent Freak, an Internet watchdog and news reporting agency reported Feb. 6, “BTjunkie decided to close their site because the stress became too much, and at least two other sites in the top 10 (most popular) have toyed with the same idea.” On the other side, Gary Fung, owner of file-sharing site IsoHunt.com, has continued undeterred. He has been fighting a six-year battle through two civil copyright infringement lawsuits with the Motion Picture Association of America and Canadian Recording Industry Association, according to information posted on Torrent Freak. “We are still here,” Fung said. “From Lokitorrent to Suprnova, we’ve seen sites we index come and go and as long as the Free Internet exists, sharing will endure. As will IsoHunt.”©
MegaUpload’s Associates Sites’ Revenues
$150 $25 MILLION MILLION Source: The US District Court for the Eastern District of Virginia, Alexandria Division, federal indictment. Reporting Public Affairs Online Piracy
Understanding By Molly Cotner
Piracy. The connotation of that very word brings to mind the idea of bandits, thieves and outlaws. In fact even when used as a synonym for acquiring illegal downloads online, its basic definition is “to steal”.
owever, of those who do pirate online, many would not think to ever actually steal a physical object or even walk into a store and take the very things they take online. So what makes us think pirating online is OK? The psychology behind it all might be surprising.
voice and that not guilty feeling can be seen in the number of people who feel that online piracy is OK. According to torrentfreak.com, a study conducted by the Rockwool Foundation Research Unit found that among those surveyed 70 percent said that “downloading illicit material from the Internet is acceptable.”
“When people pirate, they are operating in a virtual world, not a real one.”
Marc Praterelli, a CSU-Pueblo professor of psychology who specializes in cognitive neuroscience research, said the psychology behind online piracy is “a combination of our biology and culture.” It is in the human biology to like to get things for a deal, and then there is a cultural amplifier, such as peer pressure and the want for material things, which taps into that.
It is this combination that allows many to take things illegally online and not feel the guilt that is associated with that tiny little voice called a conscious, he said. In fact, the ignoring of the inner
This figure shows just how much piracy has become a standard practice, even if it constitutes stealing. Karen Yescavage, a CSU- Pueblo professor of psychology, who specializes in social psychology, said another big factor in online piracy is when people pirate they are operating in a virtual world, not a real one. The virtual world allows for de-individuation. “It is a way for you to leave yourself in the physical world and be whomever you want in the virtual world,” Yescavage said. She added piracy can be considered a consequence of the virtual world and
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The Pirate Mind by taking away the human aspect, online piracy does not feel like actual stealing. Yet another reason why so many feel they can condone pirating online is when something is pirated nothing tangible is taken. When no inventory gets lost, people feel less like they are left holding the hot potato. “It doesn’t feel like you took anything it’s not tangible,” Praterelli said. By not physically taking anything, it is more like just stealing air.
“We have a moral self. It boils down to who do you believe you are. The person we start becoming when we are younger is eventually the person who we will become when we’re adults, so best to start clean.” piracy is still, in fact, stealing. While many would agree that piracy is petty compared to other forms of crimes, both Yescavage and Praterelli said it all comes down to a person’s integrity.
Then there are the ways that people justify pirating to themselves. They use excuses such as price, convenience and the rationalization of the actual damage done to companies, Yescavage said.
“We have a moral self. It boils down to who do you believe you are. The person we start becoming when we are younger is eventually the person who we will become when we’re adults, so best to start clean.
“We disengage from our own personal standards, we rationalize …we engage in hypocrisy, and how do we explain that? One way is to cognitively bolster,” she said.
How would you feel if someone was taking your property?” Praterelli said.©
Using excuses is a way for people to feel better about what they are doing and the activities they engage in.
Photo by Ye Ming. Photo manipulation by Rose Wambsganss.
The psychology behind why people do what they do is as intricate as the connections and paths of a maze. However, when it all boils down to it
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Students: A Pirate’s Life is the Life for Me By Chelsea Reese
hen it comes to students pirating copyrighted material, the general consensus around CSU-Pueblo seems to be students are aware of what is considered copyright and how they infringe on it, but either they aren’t worried that it will happen to them or they aren’t sure how much bite the law really has. “Copyright protects creative expression that has been reduced to a tangible form, such as a book, piece of recorded music, computer program, screenplay, painting, photograph, or motion picture,” according to information on benedict.com, a copyright information website. When people use creative works without the original creators’ permission, they are violating copyright law, AKA infringing, commonly called pirating.
Most students have a general knowledge of what punishments they could face, but it hasn’t struck a chord with everyone yet because no one around them has been caught, Silva said. “It’s like, if it’s free or if it’s cheap and if it (being caught) hasn’t happened yet, then why should I worry?” Silva said.
“I’m still supporting the artists. I go to shows, I go to festivals, so I’m still giving them money.”
If they are caught, they can be slapped with lawsuits and large fines. However, jail time for pirating isn’t likely unless their intent is to profit from the copied material, i.e. selling copied CDs or DVDs illegally, according to information on chillingeffects.org, a website that provides explanations of law. Ashley Silva, 21, a senior liberal studies major and elementary education minor, said she is guilty of using creative works without permission.
Silva said she cuts and pastes images and songs into PowerPoint presentations that she uses to teach her class without citing the creator of the material, and she wasn’t completely aware of how confusing copyright infringement and online pirating can be. However, Silva doesn’t download anything because of the harmful effects it may have on her computer, she said.
“For my actual videos I’ve put together, I’ve used music off of YouTube, I’ve looked up videos and I’ve heard songs that I knew weren’t actually the artist’s (cover songs),” Silva said. “I usually just grab ‘n’ go.”
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Gina McDougal, 22, a senior health promotions major and an admitted pirate, said she downloads music illegally occasionally and buys bootleg copies regularly from her barbershop, stating that bootlegs are usually on display in the salon and ready for purchase, because “a lot of people are doing it.” Although she knows of other people who have been caught for pirating, she has made the decision to continue downloading, she said. “Tough break,” McDougal said. “Fingers crossed that it’s not me next.” Janae Deas, 21, a senior mass communications major, downloads music frequently and knows what the consequences could be if she were caught. Deas doesn’t personally know anyone who has been caught for pirating copyrighted material, but she said she won’t quit downloading even if someone she knows is eventually caught. “I’m doing that shit regardless,” Deas said.
“The purpose of these bills is to make it harder for sites — especially those located outside the United States — to sell or distribute pirated copyrighted material such as movies and music as well as physical goods such as counterfeit purses and watches,” according to information on Forbes’ Website. In January, several online websites, such as Wikipedia and Google, publicly protested the bills, which were then postponed until issues concerning the language used in the bills are resolved, according to an article on CBS’s website. “Shutting down Wikipedia for a day or blacking out the Google logo won’t stop these bills in their tracks, but they have raised an enormous amount of awareness about the issue,” according to Forbes. “As a result, it is likely that these bills will continue to be amended and, though they may pass in some fashion, they are likely to be quite different than they were when first proposed.”
Janae Deas uses her personal laptop to pirate music from the Internet. Photo by Chelsea Reese. Some student pirates, among them Lydia Shafer, 22, a psychology major, justify downloading music by supporting the band or artist in other ways.
Several students at CSU-Pueblo do not think SOPA or PIPA will be good for their Internet freedom and the bills will ruin their online experience. “What would the Internet be at that point and what would be the point?” McDougal said. “All that we’ve accomplished would be for nothing.” ©
“From my standpoint, I’m still supporting the artists. I go to shows, I go to festivals, so I’m still giving them money,” Shafer said. “There are bands like Pretty Lights who give their music away for free, which is how I think it should be.” Shafer also thinks it is easier for her to pirate music because these goods are not tangible and she can’t physically hold the music she downloads, Shafer said. Dana Williams, 32, a senior sociology and criminology major, doesn’t physically download materials, such as movies, herself because her husband does it enough for the both of them. Neither Williams nor her husband worry about getting caught, she said, even though she is aware of the punishments. “It’s easy. Who doesn’t want a deal?” Williams said. In an attempt to combat online piracy, U.S. Rep. Lamar Smith, R-Texas, introduced the Stop Online Piracy Act in the House on Oct. 26, 2011, and Rep. Patrick Leahy, D-Vt., introduced the Preventing Real Online Threats to Economic Creativity and Theft to Intellectual Property Act in the Senate on May 12, 2011.
Gina McDougal displays movies she’s bought at her barbershop, among them are copies of the movies “Tangled” and “Zombieland.” Photo by Chelsea Reese. Reporting Public Affairs Online Piracy
Cyber Piracy: By the Numbers How Much is Pirated? L
The average iPod contains $800 of pirated music
Across the Globe
Did You Know?
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PC/Console Games 6.7%
TV Shows 14.5%
Most Wanted List Pirates XXX
Fast Five L
Adobe Photoshop Jay-Z & Kanye West Watch The Throne
1000 Photoshop Tips & Tricks
Fines up to $500,000
Jail sentence up to 5 years
Fines up to $1 million
Jail sentence up to 10 years
Justifying the Act of Piracy
By Sherrea Elliott
The rationale of previewing before purchasing may no longer have a leg to stand on, and illegal downloaders may never have to risk their freedom for a song again because of improved song sampling.
Reporting Public Affairs Online Piracy
Pettis estimated that she illegally downloaded 1,000 songs and has bought five albums. “It’s easier to download,” Pettis said.
llegal downloaders might think they are justified in pirating music, videos and software by claiming they download those items to preview the content to decide if they want to buy. However, research published in the International Journal of Marketing and Advertising may have headed off that thinking by meeting the needs of both profit-driven businesses and illegal downloaders. The theory behind previewing before buying is potential customers would illegally download a product as a sample. They would then decide if the product is worth the money. If so, the downloader would then purchase the real copy. One junior at CSU-Pueblo studying computer information systems, who asked to remain anonymous, said he samples products before buying. “Sometimes I’ll preview things and see what (the song) sounds like,” he said. If I like it, then I will go download it.” That student also has an iTunes account, and if he does find artists he likes, then he said he will buy the albums. However, he will not purchase an entire album if he likes just one song. Instead, he said, he will illegally download the song. In the past year he estimated he has illegally downloaded about 300 songs, but he hasn’t purchased any albums or bought any songs via iTunes, he said. Piracy has become a national hot topic. Despite laws to prevent piracy, illegal downloading continues, but two researchers may have found a way to put a stop it.
the usefulness of samples in order to understand why downloaders illegally download. Through a survey targeted at music samples, higher quality and longer segments increased the sampler’s music evaluation, according to the press release. The research suggests if the music industry produces longer, better quality music samples, then downloaders would be more likely to buy than to illegally download. The CSU-Pueblo student, who wished to remain anonymous said longer samples would be better, but he doesn’t think longer or better quality samples would have much impact on his downloading. “Right now it’s free over anything,” he said. “I mean, I like good quality, but it doesn’t make me want to go out and buy it,” he said. Portia Pettis, a junior art major at CSU-Pueblo, said she also practices previewing before purchasing. If there is an artist she supports, she will buy the artist’s album after she has illegally downloaded individual songs from it. In the past year, Pettis estimated she illegally downloaded 1,000 songs and has bought five albums. She would still illegally download a song rather than buy the song, regardless of a longer sample song with better quality; however, she thinks that someone who really wanted to buy the song would purchase it, Pettis said. “It’s easier to download,” she said.
Yanbin Tu, a researcher at the department of marketing at Robert Morris University in MoonTown, Pa., and Min Lu, in the department of finance and economics, conducted, research that could help in the fight to stop piracy previewing.
However, Pettis said she would pay for quality rather than illegally download a less-than-perfect song that has a DJ talking throughout the song. Some artists have had success in applying this research to their sales pitch.
Tu and Lu performed a study that tested the “determinate of the five effectiveness dimensions, i.e. evaluation, willingness-to-pay, perceived sample usefulness, sample cost and the likelihood of a consumer being a ‘free rider,’ of online digital samples,” according to a 2009 press release found on BacktoEurekAlert.org.
“Coldplay, Radiohead, Rik Emmett and Paul Simon, who have experimented with high-quality samples and free formats for their fans, have had huge success as well as achieving viral marketing spread that would otherwise be impossible through conventional advertising campaigns,” according to the press release.
In other words, the study that was performed measured certain aspects illegal downloaders may consider.
No other research showing further success for such methods has been conducted in the past few years.©
These aspects included a subject’s willingness-to-pay and
Photo manipulation by Katherine Dahlberg Reporting Public Affairs Online Piracy
Piracy and the Victimization of Business Theft of intellectual property continues to threaten business revenue and undermine the creativity of producers.
By Jessica Rojas and Marcus Hill
orporations from all over the world, as various as their production markets may be, have one commonality; an incessant battle against online piracy. Industries claim to lose between $200-250 billion per year and more than 750,000 jobs to piracy, according to FBI reports. The piracy issue has released a tide of controversy for years because claims by corporations are hard to pinpoint and prove. Those who illegally take the products are not reporting their levels of pirating to anyone, let alone government agencies or the corporations they are taking from. Research from the Institute for Policy Innovation revealed the numbers are far lower than reported by the FBI. The Recording Industry Association of America, an organization that supports and promotes the recording industry, is an active member in the battle against online piracy.
cy as “a real threat to the livelihoods of not only artists and music label employees but also thousands of less celebrated people in the music industry. Piracy undermines the future of music by depriving the industry of the resources it needs to find and develop new talent and drains millions of dollars in tax revenue from local communities and their residents. The Motion Picture Association of America claims to lose almost $20 billion per year, according to information published in a January Washington Post article. However, movie theaters have shown an increase in revenue as well as steady attendance rates for the past five years. Worldwide box office for all films released in each country around the world reached $31.8 billion in 2010, up 8 percent from the total in 2009, according to MPAA.
The music industry loses almost $12.5 billion a year in the United States to piracy and more than $2.7 billion globally, according to IPI.
In addition, 12 of the top 20 all-time grossing movies have come after 2006. Movies such as “The Dark Knight,” “Toy Story 3” and “Pirates of the Caribbean: Dead Man’s Chest” all surpassed the $1 billion mark in theaters.
RIAA specifies that online piracy affects and describes pira-
In 2011, three more movies made more than $1 billion, and
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“Leaders of industries inflate the cost of goods to offset their losses.” “Avatar” made history by making nearly $3 billion at the box office in 2009. The Business Software Alliance is an organization composed of software companies who invest billions of dollars in their industry, according to information on its website. The BSA reported that software piracy globally amounted to $59 billion in 2010. The BSA study found “half of the 116 economies studied in 2010 had piracy rates of 62 percent of higher, and two-thirds had at least one software program pirated for every one installed legally.”
showed that digitally pirated music, movies, and software accounts for between $30-75 billion in lost revenue to industries. The piracy costs governments and consumers over $125 billion every year and 2.5 million lost jobs,” states information on their website. Frontier Economics and its partners took the study a step further, projecting losses for 2015. “Pirated music, movies and software will amount to losses of $80 billion for industries and $240 billion to governments and consumers.”
The BSA works to identify and remove unlicensed software products online with the help of an online auction tracking system and other technologies of that sort to monitor piracy activity, according to information on BSA’s website.
Numbers reported by all the industries are highly scrutinized by the public.
Organizations from the other industries also rely on similar technology and piracy reporting to obtain leads on pirates.
It is claimed constantly that leaders of industries inflate the amount of their losses, which can be found on many online forums.
Frontier Economics is a global company that studies economic issues and advises companies on how to handle such issues.
Kal Raustiala and Chris Sprigman, bloggers on freakonomics.com, dispute some online piracy statistics, especially since these numbers seem truly dire said Raustiala and Sprigman.
The company conducted their own study on online piracy with the help of the World Trade Organization, the World Customs Organization and the World Intellectual Property Organization. Counterfeit and pirated goods pervade virtually every sector in every country. As well as causing harm to legitimate businesses, counterfeit and pirated goods impact on governments and consumers by reducing tax revenues, increasing expenditure on welfare, health services and crime prevention. Piracy also exposes consumers to potentially unsafe products, the company reported. The data in Frontier Economics study
Online there are various forums such as freakonomics.com that discuss and debate the online piracy topic.
Two hundred and fifty billion dollars lost per year would be almost $800 for every man, woman and child in America. Or it would equate to 750,000 jobs, which is twice the number of those employed in the entire motion picture industry in 2010. The U.S. Government Accountability Office, an independent, nonpartisan agency that works for Congress, reported in its own study of effects of piracy that the lack of data is the primary challenge for quantifying economic impacts of counterfeiting and piracy. ©
The Price of Piracy
12.5 Billions of dollars lost each year in the U.S. by the music industry
Billions of dollars lost annually outside the U.S.
Million estimated jobs lost each year.
Billion dollars estimated loss for the government & consumers in 2015
Billion dollars lost in software piracy globally
Reporting Public Affairs Online Piracy
Customers test Apple products in an Apple retail store in Qingdao, China. Photo by Junhao Fang.
Piracy in China By Ye Ming T
he number of Internet users in China reached 505 million in November 2011, which is 37.7 percent of its population, according to a report published Jan. 11 by Reuters news agency. As a country with the most Internet users in the world, China’s online piracy rate is among the highest.
China has been addressing the protection of intellectual property since 1979. Over the years, it has developed a comprehensive copyright law that protects both domestic and foreign copyrighted works. China is also a member of many international organizations such as the World Intellectual Property Organization.
Ninety-nine percent of all music available online in China infringes copyright, a report by the International Federation of the Phonographic Industry says. The PC software piracy rate remains at 80 percent, according to the 2010 Special 301 Report on Copyright Protection and Enforcement by the International Intellectual Property Alliance, an annual report indentifying countries lacking protection of intellectual property.
“The Chinese government has indeed taken steps to crack down on piracy, and many of the shops and even some websites that offered such material have been closed down in recent years,” said Doug Young, who worked at Reuters news agency for 10 years and is now a business commentator and professor of journalism at Fudan University in China.
Reporting Public Affairs Online Piracy
China’s leading search engine, Baidu, was removed from the Notorious Markets List. In 2011, the list, released by the
Office of the U.S. Trade Representative each year, identifies countries with both online and physical marketplaces that are connected with counterfeiting and copyright infringements. Baidu was long criticized for its music searching and streaming services, which led to a large percent of illegal music downloading in China. In 2007, Baidu was sued by major records companies, such as Universal Music and Sony Corp, seeking $9 million for damages based on 127 songs it streamed on the website without authorization, which was a small representation of Baidu’s infringement of copyrighted music. Its removal occurred because of the agreements Baidu settled with these record companies, which required Baidu to pay royalties for streaming their music. “Chinese government regulations about piracy are actually quite strict, but the problem is that enforcement is relatively weak,” Young said. “Many producers of pirated materials have very strong connections with the local governments where their factories are located, so it’s easy for them to bribe local officials to stay open,” Young said. In 2007, the Chinese government introduced “Internet police” to the cyber world. However, it is used rather as a censorship tool for the government and does not oversee online piracy.
on infrzm, the online version of the Southern Weekly in China. The records industry in China has made too little money to be called an industry, Hong said. With a large number of illegal music streaming and downloading websites, China has not yet established the sale system of digital music and most Internet users don’t think they should pay for online downloads. In early 2011, 50,000 stolen iTunes accounts were for sale on Taobao, the Chinese equivalent of eBay, according to an article on BCC News. Buyers are promised to have unlimited iTunes downloads for up to 12 hours after the purchase. The sales model of digital music on the Internet, such as with iTunes, won’t work in China and music will eventually be free, said Xiaosong Gao, a Chinese composer, songwriter and producer, in the article “The Internet: Music’s enemy or friend?” However, some think the sales model still has potential. “I think this model could work in China if it has all the proper infrastructure,” Young said. “Chinese consumers might initially resist the idea of paying for copyrighted material, but if the price isn’t too high and the quality and support services are good, many might feel that such fees are acceptable and worthwhile,” Young said. ©
China continued to be listed on the priority watch list of the 2011 Special 301 Report. It was also highlighted in the 2011 Country Watch List released by the Congressional International Anti-Piracy Caucus, a bipartisan and bicameral group aiming to protect American intellectual property and reduce piracy abroad. While the U.S. copyright holders are worried about their losses in China, Chinese copyright industries have confronted the struggle of survival. “China doesn’t have records industry,” said Bo Hong, a renowned commentator on Information Technology, in the article, “The Internet: music’s enemy or friend?” published
An Internet user watches the U.S. produced movie “American Beauty” in an Internet cafe in Qingdao, China. Photo by Junhao Fang. Reporting Public Affairs Online Piracy
The Anti-Piracy Law Threat: Taking the “You” out of You Tube By Nikki Martinez
As waters become troubled regarding online piracy, a threat grows for the website that put the music industry back in the hands of the people.
t has been a long held yet misconstrued notion that the American music industry has been the product of organic talent and determination. The very definition of industry is “a particular form or branch of economic or commercial activity,” according to the Webster’s Dictionary entry. As with any industry, there is a process of converting raw materials into a commercial good, and this process has been implemented when it comes to music bought and sold in the U.S. At the root of all American music, there has always been a business model. In the U.S., a country whose economic system is capitalism, profit is king, and the music industry is no exception. In the ‘60s, a label called Motown Records was founded by Berry Gordy, a lyricist and business man. His label came to be one of the most renowned record companies for its talented line-up of artists. The talent included chart-toppers The Temptations, Stevie Wonder, Smokey Robinson, Marvin Gaye, The Supremes and many more.
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To promote these artists and increase record sales, Gordy used a business model using an image and a sound that could be marketed. In an interview with journalist Charlie Rose, Gordy explained his approach to the music industry. “Raw talent alone is not enough. It has to be developed and that’s what we did at Motown.” Gordy said. “That was my goal. The assembly line approach to music was they (artists) would go in one door a kid off the street and come out the other as a star. That’s what we did at Motown.” Gordy said he believed he could make a star out of a person with a small amount of talent with the right marketing and packaging. He hired choreographers, writers, publicists and top-notch producers to aid him in the assembly line approach. This mentality and process plus his line-up of talented artists brought about what some call a “Golden Age” of music. Motown Records was responsible for more than 110 number one songs and countless top 10 records in the decade, according to information on the label’s website.
Music. The consolidation of music industry power changed the face and sound of the American music industry. In economics, limited hands in any industry means limited choices for consumers. Consolidation meant fewer opportunities for artists trying to make a name in the industry. The Big Six labels looked for specific artists with the right look and sound that they could sell to audiences. In return, audiences bought only what was available to them because there were now more limited choices, platforms and avenues for music. The sound of American music was being harvested, processed, packaged and sold, and only a select few labels were profiting. It was a business model, and it worked. Nikki Sixx, lead singer of Motley Crue, explained the phenomenon in an interview, saying, “The music industry is saying (to artists), ‘This is the format, and if you’ll fit into this format, you can be on radio, and if radio will play you, MTV will expose you, and if MTV will expose you, we’ll sell records.’” All of the power of the music industry was in the hands of these corporations. The ‘60s was a decade that yielded diverse, iconic artists such as The Beatles, Jimi Hendrix, The Creedence Clearwater Revival, The Doors, all of whom were included in Rolling Stone’s list of the 100 greatest artists of all time. These and 43 other groups listed made their debut in the 10 years that was the 1960s. This can be attributed to the amount of labels operating in the 1960s. In economics, it is understood that competition in the free market allows for more variety and options for the consumer. In the ‘60s, the great number of labels allowed for a wide variety of music that inundated the decade. There was doo-wop, rock and roll, folk and rock, among others. But soon, Gordy’s process was adopted by corporate labels that slowly bought out independent labels throughout the ‘70s and ‘80s. By the 1990s, there was a group of labels know as the “Big Six” that owned the music industry in its entirety. The six groups were Universal Music Group, Warner Music Group, Sony Group, BMG Music Group, EMI Group and PolyGram
By 2005, the Big Six further consolidated to form the Big Four which then consisted of Universal Music Group, Sony BMG Music Entertainment, Inc., Warner Music Group and EMI Group. In that year, U.S. music market shares, according to Nielsen SoundScan, reported that the Big Four accounted for 81.87 percent of the U.S. music market. The breakdown was as follows: Universal Music Group accounted for 31.71percent of shares, Sony BMG Music Entertainment, Inc. had 25.61 percent, Warner Music Group 15 percent and EMI Group had 9.55 percent, while independent labels only had 18.13 percent share in the industry. But 2005 was also the birth year of YouTube. It was then that the music industry’s face would change. The site offered a platform for new artists to showcase their talents. Reporting Public Affairs Online Piracy
The video-sharing site launched in February 2005 and quickly became a popular site for uploading, sharing and viewing videos. Music artists soon caught on to the powerful nature of the audience-powered site. One such artist was Jackie Pajo, an aspiring singer from the Philippines. Pajo, who has currently reached 1,000 followers on YouTube, said she used the platform as a means to reach a world-wide audience from her home. She said she chose YouTube because of its wide reach and popularity. “It really came down to activity, frequency, the numbers. All of this encourages folks who want to share their work with the world,” she said. A popular tool for Pajo and many new artists is the use of covers of popular songs, songs that are easily recognizable to audiences, songs that are usually copyrighted. It is through these covers that small-time or new artists can garner attention from fans of the original performers, Pajo said. “Covers act as a sort of stepping stone for so many artists to be able to showcase their real talents,” Pajo said. She credits her own success to her ability to post her covers of popular music on her page. “Covers allow fans and potential fans the opportunity to hear me sing, which is what I love to do, first and foremost. The covers are also a means to demonstrate what I am capable of doing vocally,” Pajo said. Fans and followers of artists like Pajo enjoy fine tuning their music preferences by way of covers on YouTube. Justina Gonzales, a CSU-Pueblo alumnus, said she uses YouTube to listen to covers by up-and-coming artists. “I enjoy that I can find covers of the music I like,” she said. “It allows me to find new artists and new talents and I like to follow those new artists to the top. It feels good to be a part of that success.”
“Really, it puts music choice in our hands and gives the people a say in the music industry,” Gonzales said. “We can choose who should be famous.” Those audience-chosen “YouTube sensations” include music artists Justin Beiber, Arnel Pineda and (see sidebar). These artists were contacted by record labels because of their large YouTube followings. Recently, the freedom for artists to gain their own fame over YouTube was threatened. The Stop Online Piracy Act (SOPA) and the Protect IP Act (PIPA) would essentially render YouTube covers extinct. Specifically, PIPA sates in Section 3, articles one through 10: “The term ‘‘Internet site dedicated to infringing activities’’ means an Internet site that (A) has no significant use other than engaging in, enabling, or facilitating the reproduction, distribution, or public performance of copyrighted works, in complete or substantially complete form, in a manner that constitutes copyright infringement under section 501 of title 17, 10 United States Code” This section would directly apply to YouTube artists and their subsequent covers available to viewers. Though the acts weren’t passed, the issue remains a debate in terms of copyright infringement. Pajo said she is weary of the prospect of such acts returning in the future and the effect it could have on budding artists. “Piracy enforcement laws could really stifle the new artist who doesn’t have the original material or an established fan base.” Gonzales said she agrees that it could be upsetting for fans and artists alike. “With piracy acts that stretch as far as to cut off YouTube covers, the music industry will be out of our hands and the talent and fame that could be, never will be.” ©
YouTube’s Greatest Music Sensations Justin Bieber
•Appeared on YouTube at age 13 • Covered R&B artists Justin Timberlake, Chris Brown, Usher and others •In 2005, he was the #1 most followed musician on YouTube. •Signed to Island Def Jam Records •Sold more tham 8 million albums worldwide to date
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•Became known as Steve Perry “sound-alike” on YouTube and covered Journey songs with his band, The Zoo •Spoke almost no English • In 2007, caught the attention of Perry’s former band, Journey. •Currently tours with Journey as new lead singer
•Known as the “YouTube Cinderella Story” •Made up of boyfriend/ girlfriend duo Nick Noonan and Amy Heidemann • Cover of Chris Brown’s song “Look at Me Now” in which Heidemann raps went viral in 2011 • Signed with Epic Records
Business and Piracy The Hunt for Common Ground
Map graphics by Traci Hamilton. Businessman graphic manipulation by Nikki Martinez.
By Molly Cotner
The battle against online piracy is fought by the nationâ€™s leading entertainment, software and publishing companies every year, and yet it is a fight that is far from being won. With more and more people finding out just how easy online pirating can be, companies continue to dig in their heels pushing for more law and regulation. Reporting Public Affairs Online Piracy
his strategy however has, so far, has not been an effective one, and with technology growing faster than Congress can turn out laws, the question is how can these companies find a way to cater to those they say steal from them? According to Justin Bregar, a professor of mass communications at Colorado State Universtiy-Pueblo who has done research on copyright infringement, one of the first steps is for companies to provide consumers “with a product that they want, of good quality, for a reasonable price.” Price is in fact one of the major reasons many say they engage in online piracy, and Bregar said that in general most people want to pay for what they get.
So why are companies not changing how they conduct their business? “It’s the idea of we’ve always done it this way it’s a complete resistance to change,” Bregar said. Companies continue to stamp out online piracy by forcing users to bend to their rules and asking the government to help them accomplish this. However, according to Bregar, there is a much more simple solution.
However, he also pointed out that a reasonable price is not based on what the company thinks but rather what the consumer agrees is a fair price to pay.
“Rather than asking the government to prop up your business model, change your business model to something that people actually want,” he said.
Another big component that contributes to online piracy is the idea that many companies treat consumers with very little regard or respect.
In order to effectively gain ground on online piracy, companies have to realize that it is up to them to make the effort, not the consumer.
“They need to treat their customers with respect and not treat them like they’re stupid or like they’re criminals,” Bregar said.
“If the piracy thing teaches them anything it’s that if you don’t change and you’re not in front of your customer, your customer will end up in front of you,” Bregar said. ©
This lack of respect can be seen with extensive user agreements, confusing arbitration rules and packaging that is more locked down than the highest levels at NORAD, all things that illegally downloaded content does not include Paul Tassi, a contributing writer for Forbes.com, agrees that respect for the consumer is a big issue when trying to win the online piracy battle. “Treat your customers with respect, and they’ll do the same to you. And that is how you fight piracy” Tassi said. In fact both price and respect played big roles in a strategy used by the rock band Radiohead when they released their 2007 album “In Rainbows.” Instead of a traditional release, the band decided to first release the album digitally with a unique “pay what you want” price. While some took advantage of this and paid nothing at all, the band still reaped quite a large paycheck. In the first month, about a million fans downloaded ‘In Rainbows, according to Wired magazine. Roughly 40 percent of them paid for it netting the band nearly $3 million.”
In the end Radiohead showed that putting a little faith in the ones who buy the music can make for a very profitable product.
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The Future of Piracy: Our View P
iracy, like many other crimes, has little deterrent. Theft of intellectual property in the form of digital goods has become overwhelmingly easy in the cyber age where a file is a product and a file can be shared or manipulated. Consequently, the act of online piracy evokes little remorse even for the average law-abiding citizen in a time where online transactions are faceless. A balance must be struck to appeal to the pirate and compensate digital material producers. This balance is compromise and it just might be a business opportunity. Businesses should consider the question: “What appeals to pirates?” The main answers are easy access and free content. Businesses can adapt to this model of pirate thinking by readjusting their marketing process. Trent Reznor, of the band Nine Inch Nails may be a pioneer in this industry. In 2006, Reznor promoted his band’s new album by utilizing piracy. Reznor leaked his own content onto the Internet on sites like the Pirate Bay. He also left flash drives in the bathroom and backstage areas of his concerts for fans to find and upload content to the Internet themselves, according to the Nine Inch Nails blog. The trick was that Reznor only released a few songs from the album, called “Year Zero.” Album sales skyrocketed. This was a “free sampling” method that garnered Reznor attention and endeared him to the pirating community, which value free content above all. Those same pirates bought “Year Zero.” Reznor said he did this because he felt his fans were being ripped off by the music industry, which was jacking up prices to offset piracy. In a blog post Reznor commented on what he called “absurd retail pricing” of albums. His post read: “Year Zero is selling for $34.99 Australian dollars ($29.10 U.S.). No wonder people steal music. Avril Lavigne’s record in the same store
was $21.99 ($18.21 U.S.). “When I asked a label rep about this his response was: ‘It’s because we know you have a real core audience that will pay whatever it costs when you put something out - you know, true fans. It’s the pop stuff we have to discount to get people to buy.’ “So I guess as a reward for being a ‘true fan’ you get ripped off,” Reznor wrote. It appears boosting prices may only exacerbate the piracy problem for producers of digital goods. Alternatively, businesses can use the Internet accessibility that pirates crave to create platforms for buying content. A good example is the Zune Internet music subscription service. The method allows for a $15 per month fee and the consumer can download unlimited songs. Once the subscription ends, the songs are deleted. This promotes repeat business while allowing variety and providing it at a low cost. A good instance for the software industry is the Kindle book sharing method. When a Kindle book is bought, one free “share” is allowed. This method lets potential pirates receive the “free” aspect of piracy they yearn for while leveraging a business deal for the company. Is piracy truly a lost cause? It may just be a business opportunity. One of the main problems with piracy is that modern technology moves faster than the business world. The modern pirate-rampant waters of the Internet are an opportunity for the business world to adapt and do what they do best - profit. The real question is: “Who will be the one to develop a system to convert pirates into consumers? The race is on.
-RPA Staff Reporting Public Affairs Online Piracy