This article has been written by Ramesh P. Elaidam, pursuing the Diploma in Content Marketing and Strategy Course from Skill Arbitrage, and edited by Koushik Chittella.

Introduction

“Piracy is a crime. It’s not just stealing from the big companies; it’s stealing from the creators. Respect the art and support the artist.” : Neil Gaiman

Piracy means the unauthorised reproduction, distribution, and use of copyrighted material. The importance of knowing more about piracy and how it affects legitimate businesses through the displacement of economic activity in the market is assuming critical proportions as time goes by. To show things in perspective, focusing on just three sectors – clothing, cosmetics, and toys – and one country, Spain, the EUIPO has demonstrated that piracy has caused a loss of 15,044 jobs and up to 1,511 million euros in losses, which is almost equal to 6.7% of sales in these sectors.

Today, anyone can replicate anything. Just imagine that anyone can sell anything created by someone else, including software, digital media, and intellectual property. Businesses are running into huge losses due to piracy, amounting to billions of dollars worldwide. With such huge amounts of money lost by legitimate businesses, it makes very good sense for businesses and governments to work together to combat this threat. The damage caused by piracy goes way beyond sales and profitability; it also impacts investments in innovation and intellectual property rights. The effects of piracy can be seen not only on the balance sheets of companies but also rippling across industries and economies. Hence, it behoves us to have a better understanding of the full scope of piracy, which will help us to develop strategies to better protect the financial health of businesses.

Piracy: meaning

Simply put, piracy is the unauthorised duplication of copyrighted content that is then sold at a fraction of the cost in the “grey” market. The rapid advancement of technology has made it easier for piracy to become even more rampant. A simple example is the availability of CD writers off the shelf. Making music piracy is as simple as borrowing a friend’s CD and making a copy for yourself. Imagine how this would work out when you look at things on an industrial scale. There are a lot of laws that have been implemented to tackle piracy. In developed countries, these laws are stringent and carry severe penalties when applicable. In other countries, particularly a lot of countries in Asia, piracy has not yet been given the importance it requires due to more important issues at hand for the lawmakers. However, the music and IT industries have been actively involved in working with law enforcement to stem the rampant piracy. 

Earlier, getting hold of pirated content used to mean going to some dingy little shop where CDs and DVDs were sold and these shops could theoretically be put out of business by police raids, etc. Today, the scenario is vastly different, with one USB stick being able to hold hundreds of movies or albums, to say nothing about software. There are now websites where an end user can go and download the required content at no charge or a very minimal charge. There was a time when torrenting a file was highly prevalent; however, today, apps like Telegram have become the place to go where pirated content of good quality can be found soon after the original has been released. Sometimes even before the original is released.

Implications of using pirated content

The implications of using pirated products are multifaceted and can have far-reaching consequences. To start with, let us consider the legal implications and then go beyond.

Legal Implications

1. Infringement of Intellectual Property Rights: Any piracy is a violation of an individual’s or company’s intellectual property rights. These rights are protected by IP laws, which ensure that a creator’s rights to their works are assured and protected by law.
2. Civil and Criminal Liability: Anyone using pirated software or content can be charged and be liable to civil lawsuits and criminal charges. They can have heavy consequences, with civil actions leading to huge fines and damages, and criminal action can even result in incarceration for those found responsible and guilty.

Other Implications

1. Reputational Harm: Just imagine if a company is found guilty of using pirated software. The reputation of the company can suffer drastically. This would further result in the loss of credibility and trust among the customer, and the chances are that this would further negatively impact sales and profitability.
2. Operational Risks: A pirate operates on a principle of anonymity and is always going to be tough to pin down. As a result, unless you are an expert, you can never be sure of the quality of the pirated software you are getting. The chances are that it can be inferior. Sometimes pirated software can also contain malware, which can cause you problems later. Anyone buying pirated software should be ready to do all their own troubleshooting, check for malware, and do all this knowing that there are no guarantees on the results as pirated software often lacks proper support and updates. This compromises software security and can further lead to potential security vulnerabilities and operational inefficiencies. This, of course, might compromise business data and negatively affect operations.
3. Economic Impact: Piracy is detrimental to not just businesses but can affect the whole economy as well. This happens because piracy, when uncontrolled, can lead to loss of jobs, loss of revenue to companies losing out on sales, and subsequently to the government due to the loss of tax revenue from these lost sales, which is detrimental to the growth of legitimate markets.
4. Global Trade Relations: Any country seen as supporting piracy or being lax in implementing policies and laws against those indulging in piracy can be at a disadvantage because this can be construed as supporting piracy. Being seen as supporting or engaging in piracy can cause strained international trade relations, particularly if it involves violating trade agreements. The way piracy is becoming a major concern for most countries, this can affect countries seen as lenient on piracy being the target of sanctions, which can negatively affect a country’s global trade standing.
5. Legal Costs: The legal implications of piracy can cover, but not be limited to, the costs associated with defending against lawsuits, which can be substantial. Depending on the severity of the offence and if it is a repeated one, there can be further civil and criminal charges that will add to the burden. The legal implications of using pirated products are serious and can affect businesses on multiple levels, from financial penalties to reputational damage and beyond. 
6. Loss of Business Opportunities: If a company has a history of using pirated products, they can be boycotted by their customers. They can also miss out on business opportunities, as potential partners and investors would be hesitant to invest in a company that does not respect legal and ethical standards.

Post-COVID piracy concerns have only gotten worse. Below, you can find a list of the challenges that have been seen since the pandemic. The challenge of content piracy has only escalated, underscoring the urgency for industries and businesses to address this growing concern. These limitations are even more relevant today. Some of them are: 

• Surge in Piracy: The year 2022 saw a sharp increase in content piracy, up to an 18% rise, with a staggering 215 billion site visits globally.
• Top Piracy Nation: The U.S. has topped the list of countries with the maximum piracy site visits, with over 13.5 billion visits.
• TV is on top: More than 46% of pirated traffic focused on TV content; films came in way lower at 13%.
• Film Piracy Escalation: Cinematic piracy surged by more than 36%; the major cinematic releases in recent years have contributed significantly to this.
• Hit Series Piracy From TV: Top series on TV like “House of the Dragon” and “The Rings of Power” spurred a near 9% uptick in TV show piracy.
• Shift to Streaming Piracy: There has been a shift in user preference to illegal streaming sites; the majority accessed TV and film content through these illegal channels.
• Direct Piracy Site Access: Direct site visits accounted for two-thirds of piracy traffic, indicating how regular consumption of pirated content has become a habit due to entrenched habits.
• Normalisation of Piracy: The regular use of direct access signals piracy’s getting embedded into the entertainment consumption fabric of our society.

Increasing popularity of piracy in spite of associated risks

The popularity of piracy continues to grow due to several factors:

Simple Convenience: Despite the availability of legal streaming services, piracy remains attractive due to its ease of access. A new movie or series can sometimes be available on pirate sites even before it is released. Also, illegally downloaded movies and TV shows are readily available, tempting users away from paid subscriptions.

Statistics

Here are some more numbers to drive home how piracy has been accepted and is growing alarmingly:

• Pirated video content garners over 229 billion views every year.
• 80% of global online piracy can be attributed to illegal streaming services.
• Digital video piracy costs the US economy anywhere between $29.2 billion and $71 billion annually.
• 126.7 billion views worth of US-produced TV episodes are pirated annually.

These figures underscore the widespread impact of piracy, making it a persistent challenge for content creators and businesses alike.

Impact of piracy on society

1. Cultural Erosion:

• Undermines cultural diversity by devaluing original works.
• Hinders the growth of local art, music, and literature.

2. Educational Setbacks:

• Pirated textbooks and educational materials place education at risk.
• Students miss out on updated content and critical resources.

3. Ethical Dilemmas:

• Normalises unethical behaviour, affecting social values.
• The line between right and wrong becomes hazy, negatively affecting integrity.

4. Economic Strain:

• Reduces revenue for creators and industries.
• Causes economic losses, in turn impacting job opportunities and innovation.

5. Intellectual Property Rights:

• Loss of IP protection discourages creativity and invention.
• Loss of respect for original ideas, in turn affecting societal progress.

It is obvious that the ripple effect of piracy extends beyond mere entertainment, shaping our culture, education, and ethical fabric.

Strategies for mitigating piracy

A strategy for mitigating piracy is long overdue, and it will be effective only if it is multifaceted. Tackling piracy requires a comprehensive set of measures, policies, and tactics that combat the unauthorised distribution and use of copyrighted materials. These measures need to be in place to protect intellectual property rights and ensure that the creators receive the rightful acknowledgement and compensation for their work. For this to be effective, it would require the involvement of technical, legal, and enforcement components meshed together to effectively tackle piracy at all levels. 

1. Legal Measures:

• Enhance, implement, and enforce existing copyright laws to protect intellectual property.
• Strictly pursue legal actions against those involved in the unauthorised sharing, distribution, or consumption of copyrighted content.

2. Technological Solutions:

• Invest in development and deployment of tools like digital rights management (DRM) systems, watermarking, and idea identification.
• Empower and enable IT enforcement agencies to block access to piracy websites through Internet Service Providers (ISPs).

3. Education and Awareness:

• Catch them young and inculcate in them the right practices by raising awareness about the ethical, legal, and economic impact of piracy right from school.
• The government and business should work together to promote legal consumption of digital content through educational campaigns.

4. Partnerships and Collaboration:

• Set policies in place that actively promote partnerships between copyright holders, tech companies, governments, and international organisations.
• Set up think tanks and task forces that can share intelligence and develop best practices to coordinate efforts against piracy internationally.

5. Policy and Regulation:

• The government should advocate for policies supporting stricter copyright law enforcement.
• The international agencies should come to the forefront of fostering international agreements and cross-border cooperation to tackle piracy.

6. Monitoring and Enforcement:

• Add more teeth to laws and agencies that actively monitor the internet and digital marketplaces.
• Act swiftly in accordance with existing and new laws so that government agencies can swiftly remove pirated content, shut down illegal websites, and penalise offenders in their jurisdiction.

Conclusion

Why is action against piracy the need of the hour? To sum it up, piracy is a threat not only to businesses and governments, but it is also a major threat to the societal fabric of our world. This is because it not only undermines the financial health of industries across the board, such as the software, entertainment, and publishing industries, but also leads to substantial losses in revenue and profitability. Piracy also has far-reaching legal implications, including civil and criminal liabilities, reputational harm, and operational risks. It not only hampers innovation and investment in intellectual property rights but also negatively impacts the economy as a whole. To address piracy effectively, it is crucial to implement a multifaceted approach involving legal measures, technological solutions, education, partnerships, policy advocacy, and enforcement. By working together, businesses and stakeholders can mitigate the impact of piracy and protect intellectual property rights for a healthier business environment.

Let us, as individuals, pledge ourselves to rooting out this evil from our word. Together, one step at a time, we can get beyond this and ensure that piracy is controlled.

References

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