consumers and piracy

03/29/05 at 9:59 am | Posted in Uncategorized | 8 Comments

I’d like to thank everyone who has shared comments on this thorny issue, whether in reaction to my @Play column, my previous blog post or my Infotech article. I really appreciate that you took the time to share your views and whether we agree or disagree, we are engaging in a real conversation.

In particular, I’d like to thank the second Anonymous who posted a comment on my “Piracy and the Philippines” blog post. Do read that comment first because he or she raised very valid points about the economic and political reasons intellectual piracy can’t be eliminated in the Philippines. I’ve posted a brief reaction in the comments to that post, but here’s a longer take on the issue.

I agree, and I’ve said as much, that law enforcement alone won’t be enough to eliminate piracy. That’s why I’m focusing on consumer education, our individual efforts as buyers. As Anonymous pointed out, a Mindanao bigwig reportedly owns the area in Quiapo that acts as a “central bank” for pirated CDs and DVDs. Just as with any crime in this country, law enforcement is hampered not only by the poverty that drives people to commit crimes, but also powerful vested interests that protect such criminal activity.

As I said in my column and my blog post, individual pirate vendors are not necessarily directly involved with criminal syndicates. They’re the small fry who are doing this to earn a living. It’s like the beggars who are used by syndicates, or prostitutes who have to remit part of their earnings to pimps and their protectors, or jueteng bookers. I’m not passing judgment on them. It’s likely that this is a case of kapit-patalim for many of them. Even though this still does not justify piracy, we can understand why some people are forced into a life of crime — without romanticizing their condition or condoning their actions.

I’ve gotten to know many pirate vendors, and for the most part they’re nice people. Sometimes, they even offer better customer service than their counterparts in legal establishments, but that’s another story.

But as we know, petty criminals might not be directly members of criminal organizations, but their petty crimes can and do translate into funds for large-scale criminal activities. They are the retailers, but how can piracy exist in the first place without bigger fish ensuring that these goods are smuggled into the country, who collect whatever money needs to be paid to protect these individuals from law enforcers, and so on.

As Anonymous pointed out, powerful vested interests protect them, like the Mindanao bigwig he or she mentioned. Just as with every other crime, law enforcement is stymied by the fact that some government officials, businessmen and law enforcers are also part of the distribution network. Look how an illegal gambling activity such as jueteng continues to thrive. Didn’t we kick out Erap partly because he was supposed to be the lord of all gambling lords? Yet jueteng has outlived the Erap administration — it certainly existed before he came into power, and still does today.

As consumers, however, we also become part of this distribution network by buying the products and helping the pirates earn revenues. I’m not saying there’s just one monolithic organization directly benefiting from the pesos we individually shell out, but we are, one way or another, helping generate funds for piracy by buying these goods. Can I say that the money I paid for my bottle of San Mig goes directly to the coffers of San Miguel Corp.? Nope, but I do know that by patronizing San Mig (the best beer around, by the way), I’m contributing to its sales and growth.

Most of us don’t have the power to clean up our country, but we do have the power to make individual choices. And yes, our individual choices do matter, and collectively they can enable us to help clean up the mess we Filipinos have inherited.

As individuals, many of us do have a choice. The choice is to save up for the things we want to buy. If we can’t afford the original, then let’s not buy at all. Again, I’m not being holier-than-thou, but what I’m saying is that we should stop looking at piracy only in terms of getting a bargain.

We can’t change our society overnight, but we can decide today to stop buying pirated goods. That’s a start. Many of us may have bought or are continuing to buy pirated DVDs, VCDs, computer and video games, audio CDs and software applications. Yet it’s never too late to stop.

I know, this isn’t easy — I’m not a rich person myself. I know it’s especially hard for students. But it’s all about stopping to consider pirated goods as an alternative. Face it: Don’t we shell out money for things we really like? How much do we shell out to buy a book we really want, even spending a lot on the hardbound edition if we are really excited over the latest title and can’t wait for the softcover to come out? How much do we spend on prepaid cell phone cards, prepaid Internet cards, and prepaid cards for massively multiplayer online games like the highly popular Philippine Ragnarok Online? How much do we spend on movie, concert and theater play tickets? How much do we spend on comic books, whether individual issues, graphic novels or trade paperbacks? If we can save our money so we can have enough to spend on these items and activities, then why aren’t we willing to do the same for DVDs, VCDs, audio CDs, computer and console games, and business software?

This is really due to the nature of the digital world — bits are bits. Depending on the quality of the disc and the settings, a copy can be just as good as the original when it comes to optical media. But the copy is cheaper because the pirate isn’t paying for the intellectual property. The price of the bootleg copy, for instance, does not take into account the contributions of the actors, writers, director, and others, when it comes to movies.

Yes, I realize most of us will no longer be able to enjoy as many titles as we used to when we were buying pirated discs. If this means that we’ll have to buy original VCDs most of the time and only occasionally get original DVDs, well, that’s the “sacrifice” we have to make. I’m personally a cheapskate myself and buy original VCDs regularly, but have to think twice about original DVDs. Sure, some original DVDs now sell for less than P300, but compare that to P75 for some original VCDs.

If we can now only buy fewer titles, then that means we’ll be choosing quality over quantity. Some people buy a lot of pirated titles at a time, say 5 or 10 or 20 titles at a time. At, say, P80 a pirated DVD, that’s P400 to P800 to P1, 600 at a time, depending on how much your suking vendor sells DVDs to you and the discount for getting many titles in one purchase. So for these cases, it’s not a question of not being able to afford to shell out P400, P800 or P1, 600 — it’s just that we want more titles for that amount. Even if you don’t buy a lot of titles at one go, have you considered how much you end up spending in a month?

Most of the time, particularly for those with more disposable incomes, you buy a pirated DVD not because you really like it or it’s a classic, but because it’s cheap and who knows, you might end up enjoying the movie. After all, it’s just 80 bucks (maybe even P60 or less depending on where you buy). How many PC games do you really end up playing when you keep buying lots of pirated titles? How many of them are really worth playing if they weren’t so cheap that they’ve become almost disposable?

At the very least, we’ll have to become more careful in our buying habits, and possibly save ourselves the trouble of cluttering our homes with piles of pirated DVDs and other discs.

Yet something has to be wrong with our mindset and environment if our “common sense” tells us it’s better to buy a P80 or P75 (or whatever price your friendly neighborhood pirate gives you) pirated DVD than the same title as a P75 original VCD. To feel that this isn’t a good choice because the pirated copy is DVD quality.

If we truly believe that piracy is wrong, if we are otherwise law-abiding citizens who have just gotten hooked on the bad habit that is piracy, then we should do something about it the best way we can — as individual consumers.

Otherwise, what are we saying? That piracy may be wrong, but it’s OK for us to do it since everyone else is doing it? That it’s OK for us to buy illegal copies if we can’t afford, or don’t want to shell out that much cash, for originals? That anyway piracy is only to be expected in a Third World country like the Philippines?

This is the kind of mindset we’ve been conditioned to accept, and like it or not, this is the kind of thinking we’ll be passing on to our children and future generations of Filipinos. Yes, our experiences with the government and Philippine society have left us cynical, which is why many of us no longer believe we can change things because “that’s the way things are.”

Yet we’re not even being asked to do anything extraordinary or exceptionally heroic. All we have to do is stop buying. That’s the extent of the sacrifice we’re being asked to make.

Sure, we may not be able to stop pirates from continuing to ply their trade. Sure, we may not be able to change the government and society overnight. But we can change ourselves. Piracy may be impossible to completely eradicate, but we can stop being part of the problem and prevent it from worsening.

At the very least, we have to try, right?



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  1. man, i think the only thing that stops software piracy is using or supporting the General Public Licensed (Open Source) Softwares.

  2. hi anonymous, thanks for your comment. i won’t go that far but i agree people should start considering open source as a better alternative to pirated software.

    for games, we could rely on demos and freeware/shareware, and save up to buy the full games we really like.

    i know, it’s hard, and personally that means i might only be able to buy a new PC title once or twice a month. it’s definitely going to make me think twice about which titles i’ll buy.

    but it’s not like i feel i’m a martyr for doing that or think i’m making such a big sacrifice — at the end of the day, games are luxuries.

  3. I don’t buy into your argument that “Piracy is Wrong and Immoral.” Intellectual property policy is a choice, not a moral issue. The US, which prides itself now as a champion of IP in the world, was for a hundred years or so, a pirate nation that did not respect foreign copyright.

    Consider this: when the US was a net IP importer, it did not respect foreign IP rights. But when the US became a net IP exporter, then it started advocating stronger IP protection.

    I resist your efforts at shaming people into IP compliance. That doesn’t make sense.

    IP is an artificial policy that we can either adopt or reject. Or for that matter, there are alternatives to rewarding authors and inventors. We shouldn’t feel stuck to the choice of either supporting or rejecting Copyright/Patent/Trademark regimes.

    We should, as a nation, ask ourselves whether it benefits the Philippines to have weak rather than strong IP enforcement.

    For a long time, Japan had weak IP enforcement. So did China. For that matter, so did the US. History has shown that weak IP rights can lead to economic growth because local industry can find a market for its good by riding on the IP of others.

    Of course, I’m mindful of the fact that the First World have imposed a strong IP regime on the Third World with the promise of free trade. So, the issue has become more complicated. But this does not mean we are powerless to do anything.

    We should not be ashamed of our poverty nor should we shame others for the choices they have made because of their poverty. We should realize that the current IP regime we have in this country is controlled by the First World in whose interest it is to maintain this regime and to perpetuate the fallacy that IP rights are sacrosanct. We need to get past all of that and choose once and for all, which policy will get us further away from poverty as opposed to one that seeks to keep us in this state.

  4. thanks for your comment, anonymous 2. that’s an interesting alternative view.

    if you don’t think piracy is immoral and wrong in the first place, then obviously i don’t expect you to agree that we should stop patronizing pirated goods.

    but setting aside the question of morality for a moment, piracy certainly is illegal. the philippines has laws protecting ipr and punishing offenders. should we repeal these laws? or just ignore them? what will be our criteria for deciding which laws to follow?

    if IP is an artificial policy, how about if we’re the owner of an intellectual property? should we stop demanding or expecting our IP to be protected? because it’s not like they’re just pirating the products of US companies, but also of our own struggling firms.

    i understand the points you brought up about the us not respecting ipr and being a pirate nation itself when it was not the one exporting IP. but if we keep going back in history, where do we stop?

    take the case of environmentalism. some argue that environmental laws should not be imposed on developing countries like the philippines, because many of the industrialized nations that advocate environmentalism, including the us, of course, were the biggest polluters, and certainly didn’t worry about protecting the environment when they were in the process of industrializing.

    but i’m really interested in knowing the alternatives you’re proposing: how can the philippines ride on the IP of others to market our goods? how can we protect the IP we produce? and what are the alternatives to rewarding authors and inventors?

    based on your argument, we really have to hurry, because pretty soon china will be the one exporting IP and enforcing its IPR upon us. lenovo already bought ibm’s pc division, china is becoming a gaming and software development hub, and that country is also becoming the more attractive location for the offices and factories of multinationals in different industries. it’s a cliché but, yes, china is the next japan.

    which model should we follow, because as you mentioned the first world, what with globalization and all, certainly isn’t going to allow an ipr offender like us get away with it. we know that the us and the west will let countries get away with many crimes if they need something from that country, like oil in the case of middle eastern countries, or the huge market china offers to the west. what can the philippines offer while we’re busily pirating their goods and theoretically developing our own industry?

    i can follow your reasoning for piracy as a way to develop our own products, but the difference is that, japan, for instance, copied and improve. how are we using piracy to gain a competitive advantage? how are we adding value to the things we pirate? and how can piracy help the philippine movie and music industry, and our local artists?

    and really, we can keep talking about how the philippines is a poor country, but time and again i’ve pointed out that i’m talking about consumers, not the poor people peddling pirated goods. for many consumers, this isn’t a case of needing these goods which are pirated, but of wanting them.

    and do I understand you correctly: enforcement of IP by the first world is partly to blame for keeping the philippines in a state of poverty?

  5. >if you don’t think
    >piracy is immoral and
    >wrong in the first place,
    >then obviously i don’t
    >expect you to agree that
    >we should stop patronizing
    >pirated goods.

    when the West complains about piracy, they value their losses in monetary terms. but what’s not measured (or escapes measurement) is the value of dispersing information. right now because of piracy, there are IP goods (movies, music, etc.) that would otherwise not be available for consumption. movies by kurosawa and other directors will never be shown nor released on DVD bec these producers already know that we’re a small market. but now, we’re exposed to these works and artists who want to hone their craft can do so with little expense.

    how do you value that?

    my point is that weak IP laws lead to a greater dispersal of information (whether ideas contained in books, products, patents, movies, art, music, etc. etc.). more information and the ability to use it allows our people to become more competitive, raises standards, and improves people’s lives in ways that can’t be measured in monetary terms.

    we have to understand that an IP system does not exist in order to compensate the artist or inventor or innovator (although that is a necessary evil). IP laws exist in order to enrich the wealth of information and to grow the public domain because we know that more information benefits society as a whole. if people had a perpetual patent on using a net for fishing, where would mankind be today?

    the price we pay to enrich the public domain is to reward the innovators. so, the compensation system is the *means* not the *end* of IP systems.

    but one of the higher costs of the IP system is the monopoly rights we give to IP rights holders. i suppose we all agree that monopolies are bad simply because they do not encourage innovation but rent seeking — not to mention monopoly pricing leaves many consumers unable to afford the IP good.

    my point is that the IP system that you’ve advocated upholding has its flaws and costs. piracy on the other hand has its benefits.

    if the philippines tolerated the production of pirated clothing or even Cisco routers, then local companies can export these products. there’s a market out there for pirated goods. in the meantime, these local companies improve their manufacturing capabilities. later, when the level of knowledge has risen to a point where we can compete, then we can be strict about IPR because at that point IPR protects Filipinos more than it protects foreign interests.

    now, i urge you to think of any type of IP good where the Philippine players have a competitive advantage over foreign players. where do medicines, computers, routers, books, magazines, movies, music, etc. etc. come from? look at IP office statistics. if memory serves, 90% of patents are granted to foreigners and about 80% of trademarks are foreign.

    i find it amazing that we have a Filipino-first policy in our constitution but when it comes to IP rights, we’ve laid out the red carpet to foreign interests.

    so, it pains me to see you taking the high moral ground — berating us all for being pirates. the issue isn’t as simple as that although the West would like you to think so.

    finally, it’s not illegal to purchase pirated products. it’s illegal to produce them and to sell them. but the buying public commits no crime. this is consistent with the notion that the dissemination of information is more important than protecting the IP rights holder.

  6. >and do I understand you
    >correctly: enforcement of
    >IP by the first world is
    >partly to blame for
    >keeping the philippines in
    >a state of poverty?

    yes. the first world can’t compete on the basis of manufacturing might. third world labor is cheaper.

    the fastest growing sector in the US and one that enjoys the largest trade surplus is the IP sector. just think of the first world’s dominance in the areas of film, music, software, or any other IP-related good.

    so, it’s imperative that the US protect the single industry where it enjoys a comparative advantage.

    how do they do this?

    well, if the 3rd world can produce cheap goods, there aren’t enough people in the 3rd world to buy it. therefore, the 3rd world needs access to the 1st world’s markets.

    so, the 1st world says, “we’ll give you free trade so long as you protect our IP rights.” (that’s what TRIPs is all about). it’s a good deal for the 1st world because 3rd world manufactured goods have low value added (and are competitive because of slim margins) while IP goods (made by the 1st world) are high value added products.

    the net effect is that the first world dominates the local IP market and enjoys lower prices for 3rd world manufactured goods. the 3rd world is restricted by strong IP laws from competing against 1st world IP goods but enjoy access to the 1st world market in order to sell manufactured goods that have slim margins.

    so, YES, strong IP regimes are intended to keep poor countries poor while rich countries richer.

  7. yes, buying pirated products is not illegal. that’s why law enforcement is not enough, because when it comes to buyers, you have to rely on consumer education — making people realize how they contribute to the problem by patronizing piracy, and convincing them to voluntarily stop.

    the fact that people can’t be arrested for buying pirated goods still doesn’t change the fact that we know the people producing, shipping and selling these products are breaking the law, and that we are helping them do it.

    i’ve never said the issue was simple, but i also don’t buy the idea of reducing this to a case of east vs. west, of the first world trying to impose its own notions of ipr on the third world to keep developing countries poor. yes, it’s true that the us makes strong ipr protection a condition for foreign trade. it’s motivated by self-interest.

    but we ourselves also support ipr and copyright protection when it benefits us. our knowledge workers are also producing intellectual goods. our artists, musicians and other creatives are also producing original work.

    sure, they want to disseminate information, express their creativity and make others benefit from their talents. but they have to eat too, right?

    you argue that piracy allows information to become more accessible, that now we can enjoy the masterpieces of kurosawa and other works of other foreign artists, enriching our lives and allowing our own artists to hone their craft with little expense.

    presumably, our artists can be inspired by these works and apply what they’ve learned to their own works. but the original works they produce end up being pirated as well. it’s hard to see how piracy is offering a competitive advantage, when it’s helping kill off our local movie and music industry, and, presumably, innovation and creativity.

    if we want others to respect our copyright, then it’s only fair for us to respect the copyright of others. even in the case of open source and gpl, just because it’s a copyleft instead of a copyright, you’re supposed to use it according to the terms of the license. you play by the rules. you want more people to benefit, but you acknowledge that the original creator has a say on how his work should be used.

    i think many buyers do realize that purchasing pirated products is wrong — it’s just that they’ve been conditioned to accept that it’s a fact of life, or feel they don’t have a choice, or because pirated goods are easily accessible. it’s just something we usually don’t want to contemplate.

    the funny thing is that most people won’t shoplift an original dvd from a store. yet more people would buy a pirated version of that dvd. sure, the difference is that the buyer can be arrested for shoplifting, there’s a security device, security cam, and other people can spot you. yet stealing is stealing. except it’s not so obvious with piracy because you’re shelling out money, even though the real producers and creators of that work, whether foreign or local, would argue that you’re stealing from them.

    you say that the philippines should only start enforcing ipr when we’re the ones who are already exporting ip goods, but how can we get to that point when we can’t even support our own ip producers? do you expect philippine companies to keep producing filipino movies and music even while losing money, until they’re forced to close shop? or should our knowledge workers and artists just give up on the philippine market, and just accept outsourcing jobs, sell their original products to foreign markets that respect ipr, or move to another country altogether?

    because increasing the public domain is fine, but while you might say that compensating the artist or inventor or innovator is only a necessary evil, the artist, inventor, and innovator is also trying to make a living. even the most high-minded, non-profit organization needs a source of funds, and any industry needs to generate revenues in order to survive and produce new content.

    you say that our local companies should actually consider exporting pirated goods, because there’s a big market for these. this will supposedly allow our local companies to improve their manufacturing capabilities. but aren’t we courting foreign investors in the manufacturing and other industries? doesn’t our export sector depend on these foreign investments? are cisco, intel and all these foreign investors going to let the philippines get away with that?

    and as you’ve already mentioned, the us demands strong ipr protection in opening its market to foreign trade. we’re already on the watchlist and suffering sanctions due to our piracy levels — what happens when we start increasing instead of eliminating piracy? what will the philippines do in the meantime while we’re trying to become “strong enough” to ignore the preconditions for foreign trade, the wto, and all the rules that come with globalization? the charity and goodwill of the first world despite us not playing by the rules, when you’re the first to admit it’s a matter of self-interest and business sense for them?

    we don’t even help our own artists, inventors and innovators who are trying to compete globally. we don’t even “buy filipino” but “pirate Filipino.”

    and we can’t even take comfort in the fact that we have a competitive advantage as a third world country. you say that the first world can’t compete against the third world in terms of manufacturing cheap goods. that may be true, but the third world also isn’t a monolithic entity, and the hard question is, can we even say we can produce goods more cheaply than other third world nations? we don’t even have the cheapest labor. we don’t have the most efficient manufacturers. we’re supposed to be an agricultural nation, but we’re even reduced to importing rice and other crops.

    yeah, we have our english skills and creativity — in other words the service sector, artists and knowledge workers. thank God for our OFWs who keep remitting to their families.

    should piracy be a question of self-interest instead of morality? even if you grant that, the philippines has many reasons to reduce piracy as a matter of self-interest. and for us to think of the consequences of our actions, instead of insisting it’s somebody else’s problem.

  8. stealing IP goods isn’t the same as stealing a “real” good. when a “pirate” copies a season “Seinfeld”, the producers of the show are not dispossessed of the show or their rights to it. whereas, if you steal my DVD copy of “Seinfeld”, then i can’t enjoy it anymore.

    this is why economists refer to IP goods as “nonrivalrous”. so, stealing IP goods isn’t exactly the same as stealing real property.

    but you seem to miss the point altogether. IP protection isn’t an *inherent* God-given right. IP protection is a *state-mandated policy* which we are free to change.

    how can you justify a system that protects foreign interests more than local interests considering this goes against the ideals of our constitution?

    on the issue of local artists losing out if we have weak IP laws, i disagree with you. remember that shakespeare wrote his plays in a time when no copyright protection existed. we have to remember that artists make money not necessarily through IP rights but other means. musicians make more money performing live than from the sale of their recordings. in fact, many musicians in the US who perform and sell their self-produced CDs fare better than artists with recording contracts.

    besides, *real* artists don’t need IP rights in order to create. are you telling me that you’re a writer because someone at some point told you that copyright will make you rich? would you say the same of our national artists. hell no! people like you and them create, write, direct, innovate, etc. because you want to express yourself. no amount of legal restriction would stop you and no amount of legal encouragement will make you produce more.

    i’d rather have a world where artists like sting make music rather than one where recording companies contrive musical acts because of perceived market demand.

    plus, there are other ways of protecting IP than IP laws. look at ragnarok. despite the presence of “pirate” servers, people will still play in the legitimate servers because it’s not IP rights that drives their revenue but a sense of community, etc.

    even movie producers make money not only through the theatrical release but also the “back end” — cable, freeTV, and video. FPJ films still fetch over P5M each for freeTV rights.

    my point is that local artists can fend for themselves. let’s not use their plight as an excuse to protect foreign interests.

    i also don’t understand why it’s easy for you to accept the US when it acts in its own self-interest but reject the notion when i propose we act in **our** self-interest.

    we should denounce the West when it uses free trade as the carrot to bludgeon us with giving monopoly rights to their IP rights holders. and we’re not just talking about money. IP goods are items of culture and US domination of the global IP goods market means that we’re permitting US values and cultural norms to be adopted locally. to make matters worse, we make *them* rich in the process.

    the moment we buy into their “piracy is immoral” mantra, then we’ve really lost not only the market for IP goods but also the uniqueness of our culture. in the US, their culture is “consumerism” — their only common experience is that defined by shopping and buying IP-protected goods.

    joey, we can’t take the mind-set that we’re helpless. otherwise, they will succeed and trample upon not only our future but that of our future generations. there’s a lot a stake here. this is why it irritates me when our people look at this problem from the standpoint of the west. we must step aside and look at it for ourselves. we must determine our future and not have it imposed upon us.

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