Can former “pirates” fix a broken movie market?

For a country of 16 million people with a GDP under $100 billion, Ecuador spends a lot of time in the US crosshairs for inadequate IP protection. The country has been cited in the US government\’s Special 301 IP report every year for the past decade, alongside perennials like Russia and China.

Pharmaceutical access has been the sharpest point of conflict with the US, most recently due to Ecuador’s strong stance on compulsory licensing of medicines. But Ecuador’s pirate disc markets also appear regularly in USTR and industry reports. As the copyright industry group IIPA put it in its 2013 Special 301 submission, “The level of piracy in Ecuador worsened in 2012, and pirate music products are being massively sold in shopping malls without any control from police or local authorities.” The story hasn’t changed much since 2003, when the IIPA described “dramatic decreases in IPR enforcement.”

No one expects Ecuador to wage war on the pirate CD or DVD trade. As long as multinationals set prices for CDs, DVDs, and software at US and European levels, legal markets will be small and pirate markets large. In a country where the informal sector contributes over a third of GDP, street enforcement will be costly and unpopular.

But the US does expect the Ecuadorean government to buy into the premises of the US IP agenda by treating weak legal markets as an enforcement problem rather than a pricing problem—that is, Ecuador’s problem, not Hollywood’s. This produces a kabuki aspect to enforcement efforts in Ecuador (and in many middle- and low-income countries, according to this American Assembly piracy report), marked by high-profile but ineffective police campaigns, harsh but rarely applied penalties, and widespread, low-level graft as police and vendors negotiate the terms of day-to-day business.

The question for Ecuador and for many other poor countries, then, is how to break the relationship between poverty, piracy, and high prices. And on this front, Ecuadoreans have gotten creative. Since 2010, Ecuador has experimented with licensing models for DVDs that incorporate, rather than reject, the informal sector. Street vendors, local rightsholders, and the government have begun to work together to address the problems of affordable, legal access to media.

Full Story: Can former “pirates” fix a broken movie market? | Ars Technica.

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