Piracy on the High Net

1
Piracy on the High Net

• The Computer, the Internet,
• and New Avenues of
• Criminal Activity

2
Piracy

• Refers to unauthorized duplication and sales of
  intellectual products
• Three forms gathering popular legal attention
  in mass media
• Video
• Computer Software
• Recorded Music

3
Video Piracy

• Movies Videos as a Business
• box office for a blockbuster usually totals
  100-150 million
• box office can triple overseas
• home video market easily topped 16 billion in
  1995
• those looking to scam profits with low cost turn
  to pirating

4
Video Piracy Stats

• in 1996, MPAA recorded over 40,000 investigations
  over 16,000 raids
• over 5 million pirate videos over 25,000 VCRs
  were seized
• machines capable of 33 million videos/year
• estimates costs at 250 million in direct U.S.
  losses to motion picture companies

5
Piracy Hot Spots
Italy, UK, Russia, Germany
United States
China Hong Kong
Mexico, Costa Rica, Panama, Peru
6
Software as a Business

• U.S. holds an estimated 70 of world software
  market
• BSA estimates that 620,000 directly employed in
  software industry in 1998
• US leads software producing nations that incur
  the highest economic losses ( 2.3 billion
  annually)

7
Software Piracy

• Most common forms are friends borrowing a copy
  and businesses not buying enough licenses for
  each machine
• Counterfeiting the most organized form
• "gray market" software
• ways of distributing gray market software
• Forms of Internet software exchange
• email, news groups, IRC
• mail order, FTP
• serial numbers and copies on web sites

8
Software Piracy Hot Spots, 1997

• Worldwide estimated cost at 11.4 billion
• Software Piracy as a gateway crime?
• Regional piracy rates
• Eastern Europe -- 80
• Middle East -- 72
• Latin America -- 62
• Africa -- 60
• Asia -- 52
• Western Europe -- 39
• North America -- 27

9
Music as a Business Piracy

• Global music sales total 40 billion/year
• U.S. market share 45 - 50
• Functions of net audio distribution tech
• compression "squeezing" data into smaller files
• security prevent data from being copied or
  altered
• Formats or standards -- MP3 most popular
• Moving Pictures Experts Group Level 3
• compresses near CD-quality audio at 10-1 ratio
• Best guesses at downloading rates are hundreds of
  thousands per day

10
The War Over MP3
MP3

• Big Recording Labels
• Independent Record Labels
• Portals (e.g., search engines)
• Encoders (companies offering such formats)
• Online Retailers (e.g., Amazon.com)
• Hardware Manufacturers (e.g., Diamond)
• Internet Startups (e.g., MP3.com)
• Artists (e.g., Cherry Poppin Daddies, Billy
  Idol, new artists)

11
Music Piracy Hot Spots

• Little statistical evidence has been compiled
• RIAA says 100,000 CDs confiscated in 1998
• 163 increase over 1997
• Focal point continues to be on
• college campuses
• counterfeit operations

12
Themes of Piracy

• Factors that result in increased piracy
• Increased access to the web computers
• Advances in available technology
• User-friendly technologies
• International trade issues intellectual
  property laws
• Clinton administration reached video agreement
  with Chinese in 1996
• Announced trade pressures on foreign govts. in
  Oct. 1998 for software
• Weak economies most susceptible