Business Effects of Illegal Downloads

=============================================================== Business Effects of Illegal Downloads By Sam Vaknin Author of "Malignant Self Love - Narcissism Revisited"

Interview granted to Tim Emmerling, a student at Eastern Illinois University.

Q. What do you know about people illegally downloading files over the internet?

A. I know what everyone knows from being exposed to the news media and to lawsuits filed by publishers: the phenomenon is widespread and most of the millions of exchanged files are music tracks and films (though book rip-offs are not unknown as well).

Q. Why do you think people are taking part in these electronic transactions? Does the cost of purchasing the media come into play?

A. It's a complex canvass of motivations, I guess. Many media products (especially in developing and poor countries) are overpriced in terms of the local purchasing power. Illegally downloading them is often an act of protest or defiance against what disgruntled consumers perceive as excessive profiteering. It may also be the only realistic way to gain ownership of coveted content.

The fact that everything - from text to images - is digital makes replication facile and enticing. Illegal downloading also probably confers an aura of daring and mystique on the "pirates" involved (whose life may otherwise be a lot drearier and mundane).

Additionally, these products resemble public goods in that they are nonrivalrous (the cost of extending the service or providing the good to another person is (close to) zero) and largely nonexcludable.

Most products are rivalrous (scarce) - zero sum games. Having been consumed, they are gone and are not available to others. Public goods, in contrast, are accessible to growing numbers of people without any additional marginal cost. This wide dispersion of benefits renders them unsuitable for private entrepreneurship. It is impossible to recapture the full returns they engender. As Samuelson observed, they are extreme forms of positive externalities (spillover effects).

Moreover, it is impossible to exclude anyone from enjoying the benefits of a public good, or from defraying its costs (positive and negative externalities). Neither can anyone willingly exclude himself from their remit.

Needless to emphasize that media products are not public goods at all! They only superficially resemble public goods. Still, the fact that many books, music, and some films are, indeed, in the public domain further exacerbates the consumer's confusion. "Why can I (legally) download certain books and music tracks free of charge - but not others?" - wonders the baffled surfer, who is rarely versed in the intricacies of copyright laws.

Q. Do you think this leads to a feeling of disrespect toward the various pieces of media by the person that steals it so frequently? (If I download music all the time, will I lose interest in it?)

A. I am not sure that the word "respect" is relevant here. People don't respect or disrespect music - they enjoy it, like it, or dislike it. But frequent illegal downloading of media products is, probably, the outcome of disrespect towards content intermediaries such as publishers, producers, and retail outlets. I don't know for sure because there is no research to guide us in this matter, but I would imagine that these people (wrongly) perceive content intermediaries as parasitic and avaricious.

Q. Downloading is still a widespread act today. The threats of lawsuits and legal action against downloaders hasn't stopped the problem. What, in your opinion, needs to be done to stop this behavior?

A. Law enforcement activities and lawsuits are already having an effect. But you cannot prosecute thousands of people on a regular basis without suffering a commensurate drop in popularity and a tarnished image. People do not perceive these acts as self-defense but as David vs. Goliath bullying. Sooner or later, the efficacy of such measures is bound to decline.

Media companies would do better to adopt new technologies rather than fight them. They must come forth with new business models and new venues of dissemination of content. They have to show more generosity in the management of digital rights. They have to adopt differential pricing of their products across the board, to reflect disparities in earnings and purchasing power in the global marketplace. They have to transform themselves rather than try to coerce the world into their antiquated and Procrustean ways of doing things.

Q. Psychologically speaking, is there a certain kind of person who is more likely to take part in this behavior? Do you feel that this is a generational issue?

A. I cannot but speculate. There is a dearth of data at this early stage. I would imagine that illegal downloaders are hoarders. They are into owning things rather than into using or consuming them. They are into building libraries and collections. They are young and intelligent, but not affluent. They are irreverent, rebellious, and non-conformist. They may be loners who network socially only online. Some of them love culture and its artifacts but they need not be particularly computer-savvy.

============================================================== AUTHOR BIO (must be included with the article)

Sam Vaknin ( samvak.tripod.com ) is the author of Malignant Self Love - Narcissism Revisited and After the Rain - How the West Lost the East. He served as a columnist for Central Europe Review, PopMatters, Bellaonline, and eBookWeb, a United Press International (UPI) Senior Business Correspondent, and the editor of mental health and Central East Europe categories in The Open Directory and Suite101.

Until recently, he served as the Economic Advisor to the Government of Macedonia.

Visit Sam's Web site at samvak.tripod.com