Is Online Piracy Actually Unethical?

If you look up “Piracy” on google the first thing that pops up is the definition from Oxford Languages. Piracy: the practice of attacking and robbing ships at sea. That notion of piracy, which has been around for an extremely long time, has a very different meaning from the modern use of the word. Today when most people use the word piracy it is referring to online piracy: the unauthorized use or reproduction of another’s work. One definition refers to the violent attack and taking of physical items from a person or another group of people. While the other refers to the copying and use of software or media on the internet one does not own. While both versions of Piracy are considered crimes, I do not think that online piracy is unethical. As explained by Richard Stallman in his paper Free Software, Free Society, with the rise of the internet the ease of reproducing and consuming unauthorized digital software/media became significantly easier. In order to try and combat this large companies started to vilify the practice by using the term piracy, which based on its original definition has a very negative connotation. Owners of digital media would also refer to it as theft, a non-victimless crime, causing harm and economic damage. They lobbied Congress to pass strict laws criminalizing the practice(Stallman). A widespread anti-piracy public service announcement “Piracy. It’s a Crime.” was shown in theaters and on DVDs, with the first line being “You Wouldn’t Steal a Car” and showed a person stealing objects comparing it to piracy(Federation Against Copyright Theft). I believe that this narrative of downloading copyrighted software or media as equivalent to stealing a physical object is a flawed one. There is no direct effect on the owner of the digital media contrary to someone getting their car stolen as that would be a physical loss. Not only do I think online piracy is ethical, but it can also have many benefits such as driving innovations in the industry, free marketing to people who otherwise would not have paid for it, and acting as invisible competition to keep companies from raising prices too much(Kim and Lahiri).

Piracy became easily available to the masses in 1999 with the start of Napster. Napster was a peer-to-peer file-sharing website that was especially aimed at music sharing. The peer-to-peer technology that Napster used at the time was not new technology, however, the site made it very easy for users to share music files. This in turn led to rampant unintended music piracy on the site. Within a year of the site’s release, millions of people were illegally downloading music, and this was hurting the record labels’ profits on album sales. All the major labels came together and crushed Napster in lawsuits as well as launching massive antipiracy propaganda campaigns which led to the site being forced to shut down(McIntyre). Despite the closing of Napster, it was not the end of piracy and it continued to become more widespread contrary to record label efforts. It sounds as if piracy was terrible for record labels and many did think the music industry was going to collapse. But as we know it did not end up collapsing and I think this shows how piracy has only benefited the industry and its artists. The ease of streaming off the internet led to the many streaming services we know today. People realized that having access to millions of songs, for a relatively cheap monthly price, is way more convenient than the process of illegal downloading off sketchy websites. The many innovations that have evolved over the years with online streaming have allowed many more artists to be discovered. Similar to the loss in revenue from piracy, legal online streaming does not generate the same revenue that buying albums once did which was a large market disruption. Artists and companies pivoted to new sources of revenue through building artist brands and selling merchandise and ads, which has led to even more revenue than before, especially to the artist(McIntyre). This is just one example of how piracy has led to innovations that have been mutually beneficial. But I believe there are many other examples of a similar phenomenon as well as more that might happen in the future as a result of piracy.

As mentioned above a prominent argument against piracy pushed by large corporations is the supposed economic loss. I think that these companies are just peddling misinformation regarding the actual economic effects piracy has. It is claimed that between 200 and 250 billion dollars are lost each year due to piracy (University of Delaware). After these numbers were brought to Congress by anti-piracy lobbyists they were determined to be inflated and not backed up by data. Companies don’t know for sure how many copies of their software or media were pirated. Using the inflated numbers that they came up with, the loss was calculated by just assuming that every person who pirated would have actually paid for it (Stallman). This way of thinking is flawed, most people who downloaded illegally were probably not inclined to buy the product in the first place. People are not willing to spend their hard-earned money on digital that they don’t know if they will really like. Yes, there are many ways to expose people to products such as free trials or demos. But a lot of these demos lack many of the features of the full version and free trials don’t last long enough to really know if it’s worth purchasing an expensive piece of software. I believe pirating is actually a useful marketing strategy that doesn’t take any effort to implement. A personal example of this comes from a few years back when I wanted to edit photos from a family vacation I went on. I heard about Adobe Photoshop but I wasn’t sure if I really wanted to drop a lot of money on it, this was before it became a subscription, and then realize I didn’t actually like it. So I went ahead and pirated a copy of the program, I went on to use it for a while, and grew very accustomed to the program. Since I wasn’t using an official copy and wasn’t receiving updates with new features, I eventually decided to switch to the paid subscription and have used it for years now. Most companies seem to overlook this, but this is a common occurrence for many people who pirate software. They gain brand loyalty, and when a new version comes out or want another product from the same company they are more likely to eventually buy the real thing(Stanford).

There are actually examples of companies that essentially embrace piracy. If you have used a Windows operating system and have had to compress a file chances are you have used the program WinRAR. WinRAR allows you to download a free trial of the software that is actually just the entire program. There is no real expiration to the trial, however, there is a pop-up that will say after the 40-day trial you must uninstall the program or buy a license every time you use it. The catch is that there is no enforcement of this message, you can just click close to the pop-up each time you use the program and continue using it without paying even after 40 days.

WinRAR pop-up that appears if you don’t own the license.https://tipsmake.com/why-does-winrar-give-you-a-free-trial-for-a-lifetime

I have done exactly this and I am sure most casual Windows users are just as guilty. I believe that this model of business is genius and I consider this a brilliant use of ethical piracy to the company's advantage. This program became extremely ubiquitous because of its ability to use beyond the “free trial”. Many frequent users of the program might decide they want to buy it for a number of reasons. This could be to support the developers, some may be annoyed by the pop-up and there are those who believe that they have to buy the program when they see the pop-up. The average everyday WinRAR user is not how the company makes most of its money. WinRAR is not going to go after an individual and file a lawsuit because they haven’t paid for a license. If a large company with many employees didn’t buy licenses it would be much easier and more practical for WinRAR to go after them. Also, it wouldn’t be professional for a large company to not have a license, and then a “Please purchase a WinRAR license” pop-up appears during some important presentation. WinRAR has made way more money off its current strategy of its target market being businesses than it would be targeting consumers. Since they turn a blind eye to individual piracy of their software people have become extremely accustomed to it and businesses like to purchase software that their employees are already familiar with. I believe that this business model supports my claim that piracy is ethical. The average individual internet user can not do much harm downloading a piece of software without paying(Karki).

One of the most important reasons I believe piracy is ethical is that it provides shadow competition that benefits the manufacturer, retailer, and most importantly the consumer. A lot of digital goods online are sold through a wholesale model. For example, HBO will charge the cable company a fee at a wholesale rate for access to their service, then the cable company will go on to determine the price it charges the consumer. This model is called double-marginalization where the manufacturer and retailer both come up with different prices. And unfortunately, it leads to higher retail prices for the consumer, but it also leads to less consumption overall than if the manufacturer and retailer were one company. Research has shown that a moderate amount of piracy can actually reduce the harmful effects of double-marginalization(Kim and Lahiri). This is because it adds competition to the market. A good example of this is that if someone pirates a tv show or a movie the cable company loses a customer but so does HBO. So piracy here acts as a limiting factor in pricing for both the manufacturer and the retailer. In terms of a show like Game of Thrones, which is produced by HBO, a show on another streaming service such as Showtime would not be considered a direct competitor. Thus HBO and the cable company could continue to raise prices if it weren’t for piracy. At a certain point, I might not be willing to pay for the service just to watch Game of Thrones if the price keeps going up. Thus my only other option to watch the specific show would be to go illegally download it. It seems that HBO in recent years has realized that some piracy is beneficial. Game of Thrones, one of their most popular shows, was also one of the most pirated forms of media in the 2010s, and HBO didn’t really do anything to stop it. They also moved away from just being the manufacturer, to now also being the retailer with their streaming service HBO Max. Despite many people in the industry saying that piracy is extremely harmful, HBO's subscriber count has increased over the years even with piracy of their shows. I think this can be attributed to the fairly low price and ease of access that has kept enough people including myself subscribed (Kim and Lahiri).

Overall I think that piracy should not be looked at as this unethical menace to business as it is made out to be. I believe that piracy gives more power to the consumer and also has positive effects through products reaching a broader audience as Richard Stallman would say. I am not advocating for rampant piracy as too much piracy would also have negative effects. But companies trying to go after individuals who download something illegally is a waste of company resources and does not benefit anyone. Moderate piracy at the individual level has been shown to actually have its benefits. I believe that there is nothing ethically wrong with piracy in this sense, even though it may be illegal, it is not a physical loss. It is just a copy of something digital at the end of the day.

References

1. Stallman, Richard. Free Software Free Society: Selected Essays of Richard M. Stallman. Free Software Foundation, 2015.
2. Antino Kim, Atanu Lahiri. “‘Just Enough’ Piracy Can Be a Good Thing.” MIT Sloan Management Review, 27 Aug. 2019, https://sloanreview.mit.edu/article/just-enough-piracy-can-be-a-good-thing/.
3. McIntyre, Hugh. “The Piracy Sites That Nearly Destroyed the Music Industry: What Happened to Napster.” Forbes, Forbes Magazine, 21 Mar. 2018, https://www.forbes.com/sites/hughmcintyre/2018/03/21/what-happened-to-the-piracy-sites-that-nearly-destroyed-the-music-industry-part-1-napster/?sh=6a47a72d2293.
4. Piracy: Helping or Harming the World? — University of Delaware. https://sites.udel.edu/cisc356/2015/04/12/piracy-helping-or-harming-the-world/.
5. Karki, Prajwal. “How Does Winrar Make Money in 2021.” Windowslovers.com, 24 June 2021, https://windowslovers.com/how-does-winrar-make-money/.
6. “Copyright Protection.” https://cs.stanford.edu/people/eroberts/cs181/projects/1999-00/software-piracy/personal.html#:~:text=There%20are%20certainly%20advantages%20to,software%20is%20certainly%20not%20negligible.
7. “Piracy. It’s a Crime.” Federation Against Copyright Theft, 2004, https://www.youtube.com/watch?v=HmZm8vNHBSU.