Piracy and Asian Media Consumption Overseas

The only sort of advertising campaigns on trucks that we get in Australia are of the political kind.

"Piracy is theft!" "Stop the bootlegging and torrenting of music, TV shows and movies!" 

It's an age-old issue: the proliferation of piracy and digital media. After reading some fairly hard-lined opinions recently on piracy as it relates to Asian pop cultural media, let's take a brief and simple look at some of the common arguments made by proponents of anti-piracy.

Profits and intellectual property

It is true that downloading music, movies and TV series for free costs those distributors and producers profits that they could have earned if the consumer instead purchases them. Lost profits cycles back to lower profit margins and ROI, and less available for future investment on media products (for example, future seasons of a certain TV show, or music artists creating more music). Basic business finance and accounting 101.

Moreover, obtaining something for free illegally can be likened to a theft of intellectual property, and there can be grounds for copyright infringement, because (on simple terms) the consumer did not obtain the item legally through the exchange of money but instead, obtained it without consideration. 

The problem, however, becomes murkier when we're dealing with international media assets under certain conditions as faced by most consumers of Asian pop culture and media.

A scenario

To demonstrate what I'm inferring here, let's take a quick example: Lady Gaga. Signed onto Universal Music Group worldwide, the Australian branch of UMG has the responsibility of distributing her music (and other media assets) in Australia. I can walk into a brick-and-mortar music store in Australia, or online via iTunes Music Store Australia, and buy a single or album of hers, because UMG has licensed her music for sale in Australia, as well as other countries. So technically, there is very little room for any grounds of piracy, as the consumer is afforded the choice to purchase her music within Australia, and there is ownership of her music IP in Australia by UMG, being the legal distributor and producer of her music. Same with other films and TV series that have been licensed for distribution and sale in Australia. Little excuse for piracy, there.

However, what if we use another artist, say, NMB48. Considering that they're Japanese, there is little to no mainstream demand for any of their goods here in Australia and therefore, Yoshimoto Kogyo and/or AKS (the music distributors and producers) are highly unlikely to take the effort to release their music worldwide. Too costly to do for little return, even if they utilise local distributors to do the effort which, again, costs time and money for little incentive. So what about the tiny percentage of consumers that want NMB48 media goods? They have no other general choice but to digitally download illegally or purchase online. The issue with the latter is out of cost (shipping being a major factor) and with the fact that their music releases are technically not designed with the intention of selling internationally - all their promotions are thought of with the domestic Japanese consumer in mind. In the end, no Australian distributor has the IP rights over NMB48 music, leading to no legal local distributors that have made their music for sale locally. It gets worse with TV properties, as seldom are released on DVD even in Japan, making downloaded TV rips the only option for such consumers overseas.

The reality

Without the proliferation of piracy and digital media downloads, foreign artists would not have gained  international exposure and popularity overseas. Using the Asian context as an example, many anime companies are starting to realise the importance of piracy in terms of gauging demand, and the success of Korean music in Australia has led to live concerts held in Australia. Without piracy, the success of the various international ventures AKB48 has would nowhere near be as high compared with if piracy never existed. There would be no live English translation of the 4th senbatsu election, for one, because there would be even less demand for it than now. Perfume has also begun their efforts at international expansion, realising that they have a sizeable overseas fanbase, by swapping to Universal from the digitally-intolerant Tokuma Japan. 

Of course, this is the internet: where something is made available online, barring country restrictions, everyone can get access to it. It is a common, and perhaps valid, argument that by making Asian media available online for downloading, they are contributing to the piracy efforts domestically (the situation as described above with relation to Lady Gaga). 

However, it could also be argued that foreigners are more likely to spend larger amounts than their domestic counterparts, on average per person (there are exceptions of course), thereby contributing more for the artist, especially once they do decide to buy their goods legally. If I really do like AKB48, then I will support it and therefore consider purchasing some of their music/motion picture goods online. In fact, digital piracy is a form of "free marketing" for overseas consumers - there's little to no investment needed, compared with establishing local marketing and distribution from the get-go with an unknown forecast on local market demand or tastes. The only promotional and distribution effort required is for the local consumers anyway, as the local market (especially in the case of Japan) is sufficient for meeting their profitability needs (and see little incentive to expand overseas). If they do like the artist, then generally they will find the means to purchase it, be it overseas online shops or international iTunes cards, whatever the cost (in economic terms, such consumption becomes cost inelastic for overseas fans), whereas local consumers (barring diehard fans and wota) are more susceptible to cost elasticity and the vagaries of corporate ROI. The net effect on profit, ceritus paribus, becomes nil over the long-term as those once-downloading consumers become purchasers, spending a high amount of their income on those goods. 

Longer term, especially in the context of foreign-language media consumption, this should generate a higher level of profits than compared with the traditional and costly method of local distribution and marketing - everyone has a self-incentive to purchase simply because of the merits of the artist that they support. The only issue left is international copyright treaties and enforcement, although I suspect some companies might not be willing (either financially or pragmatically) to justify taking legal action when that would result in decreased overseas consumption and popularity, lowering revenue streams. International revenue impacts would be low anyway, as the company's main source of income is from local consumption, so there's less fish to fry by hunting overseas consumers. 

Note that I'm only restricting the context to those media products that have no local (legal) distributor nor local IP rights ownership to those artists and their products, which is generally most Asian (especially Japanese) media products consumed overseas. Particularly AKB48 goods, where there is a high demand for not only their music and concert properties but also, being an idol group and all, TV shows - many of which are never released for commercial sale on a disc/digital format. Unlike anime, there are no specialised distributors or licensors (e.g. Madman Entertainment, Sentai Filmworks) for these sorts of series due to a lack of demand - the high cost of licensing would outweigh any benefit of product diversification and local profits.

Final words

In the end, overseas distributors need piracy if they want to gain some international exposure and popularity, with the long-term goal of generating enough demand to have the incentive to sell and market their properties overseas through local means. This is especially true for a market like Japan. Even if they are indifferent to international popularity, the overseas market is a negligible one when taken overall anyway and whilst it would be legally fine to do so, suing the overseas consumer would take significant time, effort and cost. And of course, they would be incredibly cruel to do so. 

Disclaimer: I'm not here to defend piracy, nor am I trying to stop it. But I wish to explain the reasons why piracy has become so paradoxically necessary in certain transnational contexts, especially the Asian one. And no, I'm not a commercial lawyer, let alone an expert on international IP law.