We have all seen marked amounts of growth in proliferation of MP3’s and DivX’s. But have we ever stopped to think that their growth is an indicator of thriving violations of copyright agreements. A parallel increase in shared software (through p2p) also suggests the same for Intellectual Property rights agreements and licenses.

In the western world the figures are , shall we say, less staggaring. According to RIAA and MPAA roughly around 25% of the copeis of music and movies going around in the US on optical medium were pirated. Similar stats for ‘3rd world’ countries can hardly be fathomed. As an example, take note that the largest recordable optical medium manufactureres have changed in the past 10 years from all over the world to south east asia. This implies a more or less direct increase in pirated copies of copyrighted material.

All that was factual information. The pertinent question here is. Why? I beleive it’s a statement being made by file sharer’s is. Is it really justified that talented (or sometimes just overhyped) artists be payed huge amounts of royalty. Just so that their fans can hear their music. Here I consider the cost of the proeprietary product as against the cost of the medium of distribution.

  1. An average CD when cast from a die (as mass produced CD’s are) costs around Rs 3-4 (6-8 cents) to produce.
  2. Include into that the cost of packaging and printing lets say totalling around Rs 3-4 more. coming to a total of 6-8 Rs (13-18 cents)
  3. Now assume that the wastage factor (peices sold /peices produced) is 0.5 i.e. if 200 CD’s are produced only a 100 are sold
  4. The total cost now comes to 12-16 Rs (27-36 cents)
  5. Also adding transportation and middle man margins of 100% (crazy but lets allow as much margins as possible)
  6. Now the Cost to put this CD on the shelf comes out to 24-32 Rs (53-71 cents).

So you mean to tell me there is a profit above this to the tune of 200 % more. Audio CD’s are Rs 100 (2.2 $) per peice the last time i checked

The shelf cost of a movie on Video CD’s in India stands at a minimum of Rs 200-300 if bought from a legitimate source.

Consider the alternatives.

The local grey market CD dealer provides movies at Rs 100 (2.2$) and Audio CD’s for as little as Rs 30 (66 cents)

The Internet provides active P2P communities from where you can get a much wider variety of music and movie’s than ny stockist or Music store in India can provide. The only cost here is to remain connected.

So for me the end user the difference is only the difference which seems to have crept is is the difference in the cost of putting the finished item on the shelf and the cost at which it is marketted. The assumptions made about the wastage and transport and middle man are clearly prepoterous. Hence an actual record company can sell CD’s at the same price as the pirate and still make a profit.

This would help in many ways

consumer : curb the grey market products which have no quality control

Artist : would sell just as many or maybe more records than they are doing currently ( more of them through the proper channel)

Record company: would sell more peices (larger production should mean lower production cost)

MPAA RIAA : could drop the facade that they actually want to stop piracy. all they want is that more people listen to the music and the more profit they can make out of it.

🙂 What do you think?