20 November 2007

Of "IP", "Piracy" and China

As readers of this blog will know, I don't use the terms "intellectual property" or "piracy", since both are profoundly misleading and hopelessly skew the discussion. Nonetheless I can recommend a paper entitled "Intellectual Property Piracy: Perception and Reality in China, the United States, and Elsewhere", since it presents a cool analysis of the reality behind the terms, as well as some surprises.

Here's a sample of the former:

Free-rider downloading also serves an advertising function that may actually benefit music-copyright owners: Some free-rider downloaders may like “Sci-Fi Wasabi” enough to go out and spend 99¢ per song for other Cibo Matto tunes from iTunes, or even $11 for the album Stereo Type A or $19 for Pom Pom: The Essential Cibo Matto. If the downloader (or another who hears the downloaded copy) becomes a fan, hundreds of dollars in sales may result; if no download takes place, all of these potential future sales would be lost. Even if the total number of such sales represents only a tiny portion of downloads, it still exceeds the number of sales in the absence of downloading, which would be zero.

And one of the surprises is as follows:

Of the supposed $6.1 billion in losses to U.S. studios, 2.3 billion, or 38%, were lost to Internet piracy, while 3.8 billion, or 62%, were lost to hard-goods piracy. The three countries in which the losses to U.S. studios were highest were not East Asian countries, and two of them were not developing countries: Mexico, the United Kingdom, and France accounted for over $1.2 billion in lost revenues, or 25% of the non-U.S. total – and slightly less than the U.S. total of $1.3 billion. The three countries have a combined population of about 225 million, somewhat less than the United States’ 293 million, giving them a slightly higher per capita piracy rate.

(Via Salon.)

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