The Consequences of Movie Piracy

Monday, November 23rd, 2009 by Patrick Ross

There remains a stubbornness out there among some Internet users, a sense of entitlement to enjoying someone else’s creativity without payment to the creator.

In this Chicago Sun-Times story by Kara Spak, Ms. Spak quotes a student at the U. of Illinois at Chicago who enjoys watching unauthorized and infringing copies of movies online saying the following:

“I don’t think it’s wrong,” said 21-year-old online movie-watcher Ahmad Al-Ashqar of south suburban Palos Heights. “I’m sure the movie industry is doing a lot of harm to us, taking our money.”

So receiving payment in return for a product or service is “doing a lot of harm.” I don’t care how “new” a business model is, when receiving payment is viewed as causing harm, there won’t be a business.

I think it’s safe to say that most consumers understand that payment is sometimes necessary when enjoying creative works someone else invested time and money to create. Even “free” content like broadcast television or streaming on Hulu involves a “payment” in terms of exposure to ads. But this easy ability of someone a bit short of cash, as this infringer identifies himself, to rationalize enjoying someone else’s work without compensation in any form to them causes significant harm.

The Sun-Times story notes the almost immediate availability of the new motion picture New Moon. You couldn’t have paid me to watch it, but millions apparently were willing to pay, it grossed more than $140 million this weekend. But no one can say with a straight face that, prior to the availability of infringed works online, at least some of those infringers would have been among those purchasing tickets. Lost sales are a reality.

But the vast majority of motion pictures are not major Hollywood blockbusters featuring dreamy vampires and werewolves.

Take creative works made abroad. In an article in Uganda’s Daily Monitor, we learn about “Nollywood,” Nigeria’s film industry. Every nation on earth has creative people eager to ply their craft; in each country this creative talent base is a potential source of domestic economic growth and exports. But as Alec van Gelder points out, despite having a production cost a small fraction of a Hollywood film, piracy not only significantly reduces the potential paying audience for Nigerian works but actually contributes to a higher per-unit cost of production than a DVD from Hollywood.

That is not a good formula for economic growth.

Someone enjoying a creative work online without authorization or payment of compensation can choose any rationalization they want. The common one, echoed by the student above, is this: “I want to enjoy creative works in the way that I want, in the setting that I want, when I want, and at the price point I want, and if those demands aren’t being met, then it’s the producer’s fault I’m opting out of their business model.”

Opt out all you want — if you think New Moon should be released online for free simultaneously with a theatrical release where moviegoers are charged, then don’t go to the theater. But don’t then adopt mock righteousness and watch an infringed copy while telling yourself your behavior is justifiable.

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