The Ethical Dilemma Around Music and Media Piracy

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Throughout the years, the film and music industries have had to come up with ways to protect themselves against copyright piracy. Through the emergence of software’s like LimeWire and Piratebay that allow users to illegally download music and movies respectively, these industries lose a lot of money because of lack of sales. However, fairly new platforms like Spotify and Netflix allow people to enjoy entertainment at a low-cost price and reduces the need to download illegally. There are also a number of copyright warnings before live shows and movies that present the legal consequences of illegally recording these materials. This article tries to explore how economic and enforcement strategies influence how users acquire their media. Using a survey done on university students regarding music consumption, income and risk perceptions coupled with ethics greatly influence a person’s Willingness to Pay (WTP). This concept is basically about how much money a person is willing to shell out for a certain product. The more they like or prioritize it, they will be more likely to buy it no matter what the price is.

The conceptual model used in the paper is introduced through the comparison of the legal and illegal markets in the protection and acquisition of copyright goods. For each market, there is a value and a price of participation. If the value is greater than the price of participation, then it is more likely that the consumer will acquire a product through the legal market. For example, if a person with a preferably above average income is a big fan of Ariana Grande, he/she would rather purchase a concert ticket or buy her albums rather than illegally downloading a bootleg of the concert or her discography. However, if the value is lesser than the price of participation, then it is more likely that the consumer will acquire a product through the illegal market. For example, if someone with an average income casually listens to Billie Eilish but is not an avid fan, he/she is more likely to illegally download a bootleg of her concert or illegally download her songs rather than buying her concert tickets or her albums.

The concept of enforcement basically states that if there are more barriers to obtaining media illegally, piracy can decrease because putting barriers increases the hassle of obtaining the media. It can include imposing a higher penalty if one gets caught or flagging/taking down piracy websites or software’s. This theory is ideal, along with the concept of economic solutions. It is basically about how reducing the price of media will combat piracy because a budget-friendly price will lead to more purchases from a wide range of consumers. Although both concepts deal with the same purpose of increasing purchasing media through legal means, the difference depends on the different levels of loyalty of the consumers to a certain media product.

Furthermore, if the value of a legally obtained media product is less than its price in the legal market but the value of the same media product in the illegal market is higher than the cost of obtaining it, piracy can still occur because the consumer will feel somewhat compensated for taking a risk. For example, if a person were to buy a second-hand album but finds it too pricey and knows that a friend has a copy and is willing to burn the whole album on a blank CD for free, then that person would rather acquire the media for free through their friend.

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In this article, the researchers used survey data that they gathered from randomly selected university students. The survey consisted of questions regarding the consumption patterns of music, specifically digitally obtained music, along with their knowledge of copyright law as well as views on recently implemented anti-piracy enforcement laws. The question of whether they believed piracy was a huge problem to those in the music industry was also included in the survey. From the data, 58% of university students disclosed that they owned illegal music, and their average music collection consisted of 40% of illegal music (Chiang & Assane, 2009).

For the purpose of using university students in the article, the Income that is being measured is the disposable income that they gain from work, so as to get a loose basis of its influences on a students’ WTP for copyright goods. The economic factor is measured by income, which usually presumes that someone with a higher income would commit less piracy. For the influence of WTP through the non-economic variables, risk behavior (specifically the caught and penalty variables) is being used. Caught is how a likely/unlikely a consumer will be arrested for downloading illegal music, while Penalty deals with the amount of money/fines that a person expects to pay if caught downloading illegal music. Higher scales of the previously mentioned behaviors trigger risk-averse behavior which reduces privacy and increases WTP. As for the control factors, demographic variables backed up by research were found to have an effect on piracy. Those who study in the fields of business, math, and science are more likely to commit piracy because they have access to tools that may aid them in doing so. Finally, Fairness is used to determine whether a student perceives piracy to be unfair to copyright owners, while Shut is to determine whether students think websites containing illegal material should be taken down.

The Heckman maximum likelihood methodwas used to determine which factors had more impact compared to the smaller or marginal ones and how this affects peoples’ WTP. According to this method, Income coupled with Caught and Penalty were the biggest contributing factors in positively influencing students’ WTP for digital music downloads. However, Income is relatively more significant than enforcement variables Caught and Penalty. Therefore, students put more importance on their disposable income than getting caught or paying a fine.

As for demographic variables, their findings were in line with their research, as males are more likely to commit piracy than females and younger students are less willing to pay for music. It was also discovered that White/Caucasian and Asian/Asian-American students are less likely to obtain music through legal methods. However, the White/Caucasian demographic are more likely to commit piracy than the Asian/Asian-American demographic. Through the data, there is no significant correlation between ethnic boundaries and career paths to WTP.

As for Fairness and Shut, they are also contributing factors as to why students’ would choose to legally purchase music rather than committing piracy. The findings in this article are in line with the modern movement regarding music consumption. Online music streaming services have seemed to surpass obtaining music through illegal means, because of its higher quality and convenience. Through the growing popularity of these music streaming services, it can be considered as a better substitute to downloading music illegally. Therefore, WTP for these services can increase, and piracy can decrease as well.

What this article adds to the table are the underlying factors that influence the WTP for making legal purchases when there are illegal substitutes. It drives home the point that economic incentives and enforcement actions help in the reduction of piracy by reducing its value in the illegal market, and/or increasing the value of goods in the legal market. However, it is unclear as to what extent these influence the WTP to pay for licensed music. As previously mentioned, disposable income and greater risk-averse perceptions lead to a higher WTP for legal digital music. Therefore, government policies and corporate strategies should aim to increase the value of legal digital music downloads through lowering prices/increasing initial value, along with increasing the risk of piracy by raising fines or taking down websites or software’s that provide an avenue to commit piracy.

However, the groundbreaking finding is that ethics variables also have a significant effect on the WTP for digital music. Campaigns to raise awareness of the risks in participating in copyright piracy were proven to be effective in influencing the decisions of the students in deciding how to obtain music. Along with the growing library of songs and convenience of online streaming services, these services prove to be competent substitutes of obtaining music rather than through illegal means. Although illegal means to obtain music still exist, digital music platforms provide students with a more convenient choice to obtain music legally, and this development looks good for the future of music sales.

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