Purchasing power linked to piracy

2013-04-25 11:01

(Duncan Alfreds, News24)

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Istanbul – The problem of counterfeiting and copyright infringement is complicated by the purchasing power differentiation in countries, a world body has asserted.

“You have one global market, but not one global consumer: Indeed, many different levels of consumer and their purchasing power,” Dr Francis Gurry, director general of the World Intellectual Property Organisation (Wipo) told News24.

According to the BSA Global Software Piracy study, the worldwide piracy rate is 42%, but in emerging markets, the rate spikes to 68%.

Gurry said that the globalised economy had played a role in the spread of counterfeit goods, particularly when those goods are digital content.

“Very briefly, the origin of the problem of counterfeiting; the aggravation of the problem has been globalisation which creates greater opportunity in open markets for illicit goods to be circulated.

Organised crime

“In the case of digital pirates, of course, we’ve had a revolution in the means of production and distribution of music, literature, and cinema – all forms of cultural goods.”

The value of the trade in illicit software is estimated to be around $63.5bn and much of these funds have been shown to support organised crime activities.

Wipo contends that the business models developed prior to the internet revolution has to change to cope with the speed of technological change.

“That revolution has meant that the architecture that was in place for the analogue world has to be re-invented, if you like, for the digital world.

“It especially means a transition in business models and the different business models by which music and the other cultural goods are distributed,” said Gurry.

South Africa is among the list of countries that have signed up to the World Customs Organisation’s Interface Public-Members tool which seeks to limit the spread of counterfeit goods by disrupting the piracy economic supply chain.

Economic activity

Gurry said that nations are committed to fighting piracy, but the difference in purchasing power exacerbated the problem in some countries where resources were scarce.

“I think that all countries actually, are committed to enforcement of intellectual property – I don’t see much of a difference there.

“Some countries have more resources with which to tackle the problem, first of all. In other countries, you’ll find a big difference in purchasing power,” he said.

According to the piracy study, reducing piracy by just 10% in four years would create $142bn in new economic activity, add around 500 000 high-tech jobs, and result in an additional $32bn in tax revenue.

Gurry, however, said that consumers are often torn between the long term benefits of legal products, as opposed to the short term gain of lower costs.

“The short term disadvantage is that you have to pay. The long term advantage is that you have a creative culture, you have an environment in which cultural production is financed; in which creatives are going to survive.”

– Follow Duncan on Twitter.

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