A few economic models to combat piracy

Firstly, I’m really sorry for not posting for almost two weeks, as I’ve been really busy with school and other commitments, and have just not found time to post here. However, although it is not going to get easier, I will try and post every week from now on

Piracy: the unauthorised use or reproduction of another’s work. It is one of the problems which plagues modern society like, well, the Plague. Movie producers, TV show producers, and countless others are trying to stop this seemingly uncontrollable wave of piracy from continuing. It is an inevitable and inescapable truth of the society which we live in that people want to get things for free. If you want proof of that, you just need to look at all the people falsely claiming benefits in the UK. As people get lazier through the mechanisation of society, they will, obviously, want more things free of charge. Piracy is a perfect way to sate this need, with programs, videos, even bootable discs from every corner of the world and any sort of producer imaginable available on these flagrant websites.

Below are some simple economic models that I have devised, which I think could help combat the rise of piracy in the world. In the interests of simplicity, I will limit these models to movies.

Firstly, the general consensus is that DVDs nowadays are far too expensive, and the opportunity cost of purchasing these DVDs is far too high for the average man, who does not have a dearth of disposable income. Of course, as they still want to satisfy their desire to watch the movie, they will look to alternate avenues to watch these movies. My proposed solution is to reduce the cost of these DVDs so that the opportunity cost will not remain so high, and more people will have the disposable income to buy the DVD, with a clear conscience. In order to accentuate my point, I will take an example.

The Wolf of Wall Street was the most pirated movie of 2014, and, in order to understand why, I searched its price on Amazon America from 2014, which turned out to be $26.99. Even with my relative inexperience in spending, I am quite sure that your average Joe would not want to fork out $26.99 to buy a DVD, which he can pirate in about an hour and watch, in full 1080p Blu-Ray HD. In 2014, what I think that they should have done is to cut down that price by about $10 to around $15.

Although these figures may not be entirely accurate, I think that they can be tweaked at any time, as it is the underlying principle that matters for the moment, not the figures. A price cut means that consumer demand would be stimulated, as they are able to watch the movie and have about $10 of disposable income to spend elsewhere, so everyone’s a winner, in a sense. This means that the amount of people turning to piracy as a result of having insufficient disposable income decreases, as they can now buy that movie, have some more disposable income, and have a clear conscience on top of that.

Although sometimes people just want something entirely for free, this would, in my opinion, reduce piracy and make sure that those movie producers have a little bit of extra money in their pockets.

The next model is based on people’s physical laziness, more than monetary laziness. In my opinion, people who pirate sometimes do so because they are not willing to go through the effort of going to the store, and purchasing a DVD, then driving back home. Who wants to do that in the 21st century?

Although the introduction of websites with shipping such as Amazon and eBay have changed this somewhat, they are still a harder choice to take than searching up a file to pirate. To combat this, what the movie producers could do is to create an online movie marketplace of sorts, which would render DVDs meaningless. Demand for DVDs has been decreasing over the years, as people just do not want a physical copy of something that they want anymore. It’s all virtual. Creating an online movie marketplace, with downloads similar to that of torrent clients such as µTorrent and the like, would mean that the physical hassle that people have to go to in order to purchase copies of a movie would be eradicated.

I understand wholly that services like Netflix exist, however a common complaint is that there is a rather limited choice of movies. An online movie marketplace ensures that you can get the movies that you want, whenever you want, at (hopefully!) the subsidised price that you want. Again, this would increase demand, as people do not have to go through the effort of actually purchasing material copies of movies in the form of DVDs, and it will take up less physical space in their house. The corporation will also have to go through less expenditure in order to produce all those DVDs, as there will be an infinite, unlimited number of copies of movies, so they do not have to cut into profits by increasing supply, as supply is infinite. It is a win-win situation again, as corporations get more money, the people get an easier alternative to buying DVDs, their disposable income increases, and piracy is reduced.

To me, these are the changes that need to be made in order to at least somewhat eradicate piracy, as in any modern business, you need to profit off consumer laziness by providing the path of least resistance in order to give them the easiest access to the goods and services that they want. Subsidised prices increase demand and put more money into the pockets of large corporations, and the people get an easy alternative to piracy, which will leave them with a clear conscience. Of course, piracy can never be completely nullified in this digitised age, but I think that this would be an effective and cost efficient way to combat this cancer to modern society.

9 Comments Add yours

  1. jackhoch says:

    Just discovered your blog! Its great!
    I started trading CFD on a demo account – I`ve don`t have the confidence to start for real yet.

    Cheers – Jack

    Like

    1. Thanks! CFD trading is really fun, hope you enjoy 😉

      Like

  2. Simon says:

    Good to see your level of motivation and interest here.

    But you should avoid using unsubstantiated statements such as: “If you want proof of that, you just need to look at all the people falsely claiming benefits in the UK” as if they were evidence for your argument.

    Unless and until you can back them up with reputable data sources, they are not evidence of anything at all, save your own biases.

    There are enough socio-political dog-whistlers out there already – keep your mind open, check your facts and build your argument on something solid rather than by playing on others’ prejudices.

    Cheers, Simon

    Like

  3. Saul says:

    Thank you for the new article keep them coming,I look foreword to reading them.

    Like

    1. You’re most welcome!

      Like

  4. Shreynal says:

    A good read for a sunday morning. Thanks!

    Just would like to point out that itunes and spotify are somewhat trying to do the same. Basically what matters in the end is to have a very customer centric approach.

    Like

    1. Thanks! They’ve been inspired by me, of course :p

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