Implementation and Success Analysis of Various Global Programs for Piracy with Special Focus on the "Six Strikes" Policy

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Authors Aroba, Nidhi

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Table of Contents Abstract ...... 3 Introduction ...... 4 What is Piracy? ...... 5 Who is a Pirate?—Profile of a Pirate ...... 6 Why Pirate? ...... 7 How Do We Pirate? ...... 9 Impacts on Industries ...... 12 France ...... 16 China ...... 23 U.S...... 25 Survey ...... 31 Conclusion ...... 39 References ...... 41

Figure 1: What is Piracy? ...... 5 Figure 2: Theory of Planned Behavior Chart ...... 8 Figure 3: Recording Industry Association of America; Digital Entertainment Group; Motion Picture Association of America Revenue Comparison (Taken from The New York Times) ...... 13 Figure 4: IIPA Creative Industry Growth Rate (Taken from Arstechnica.com) ...... 14 Figure 5: HADOPI First Strike Warnings (Source: TorrentFreak) ...... 18 Figure 6: HADOPI Second Strike Warnings (Source: TorrentFreak) ...... 19 Figure 7: HADOPI Third Strike Warnings (Source: TorrentFreak) ...... 20 Figure 8: Control Treatment Graph ...... 34 Figure 9: Individual Treatment Only Graph ...... 35 Figure 10: Societal Treatment Only Graph ...... 36 Figure 11: Combined Treatment Graph ...... 37 Figure 12: All Treatment Intention Comparison ...... 38 Figure 13: Treatment Deterrence Graph ...... 38

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Abstract Since the advent and perpetual improvement of Internet technologies, digital piracy has become ubiquitous. As a result, digital piracy is a global issue which transcends national borders, governments, and legal jurisprudence. Several players such as national music and movie industries, political groups, and

Internet freedom groups have become embroiled within the issue in order to better understand digital piracy. With this interest, a new field focusing on piracy research has emerged and researchers have begun to understand the demographics, motivations, methodologies, and implications behind Internet piracy. Meanwhile, industries argue that piracy hurts their bottom line and deters artists from creating new content. Through these arguments, these industries have been somewhat successful in implementing anti-piracy programs globally such as in France and most recently the United States. The new program, called the Copyright Alert System (CAS) or “Six Strikes”, went into effect in early 2013 and it is unclear how effective it will be. This thesis will assess the success of international anti-piracy plans such as in

France and China in relation to the U.S. plan. Further, this thesis will conduct and analyze a survey study to understand how U.S. Internet users will react to the new plan.

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Introduction Since the advent of the Internet, many have grappled with the issue of digital piracy—the semantics, ethics, methods, motivations, and implications behind this pervasive act. For many, digital theft of copyrighted information seems innocuous and rather inconsequential however, there are many people, organizations, industries, and even countries affected by a single click on the download button on a torrent program. As technology advances and global Internet usage increases, piracy continues to grow and has become an international issue, which transcends national borders, governments, and legal jurisprudence.

In 2009, there were an estimated 25 million active users of , a large Internet file- website (Piracy by the Numbers). The PC software industry was deeply impacted from pirated software because the commercial value of pirated software sharply increased from $58.8 billion in 2010 to $63.4 billion in 2011 (Business Software Alliance). Today, Russian movies are downloaded an average of 1 million times from the Internet during their first week in theaters and are consequently gutting the

Russian movie industry (Piracy by the Numbers). As it can be seen from these statistics, some organizations have made many cases on how piracy impacts and ultimately hurts national economies, industries, and jobs.

Despite the extensiveness of piracy and its wide-ranging repercussions, some countries have attempted to put an end to piracy within their borders. While none of the efforts have fully achieved their goals as of this paper, piracy critics laud any and all anti-piracy efforts, privacy proponents criticize national actions, and dialog has begun between citizens and their governments on if and how to effectively deal with piracy and pirates.

Since 2011, the United States became the latest of these countries to implement an anti-piracy effort. Though the program, formally known as the Copyright Alert System or “Six Strikes”, has only recently gone into effect, this paper will attempt to analyze the implementation and success of previous, prominent anti-piracy plans in France and China and compare to the U.S. plan and predict how effective

Six Strikes may be towards curbing piracy. Further, this paper will discuss the consequences of piracy, ARORA 5 describe graduated-response plans, and present results from a study focusing on piracy behavior in the US regarding perceptions of success of the new US plan.

In conclusion, this thesis hopes to further educate individuals about the issue of piracy. By exploring the topic from both an international and national lens, and conducting a study relevant for the field of piracy research, the author aspires to inform her audience about the status and implications of piracy beyond that of what can be found online in other literature.

What is Piracy?

Before delving into the crux of the issue, it is important to understand what piracy exactly is.

According to Merriam-Webster, piracy is “the unauthorized use of another’s production, invention, or conception especially in infringement of a copyright” (Piracy Definition). Though pirates and other parties may have different definitions for piracy, this official definition will serve to adequately describe the act in this paper. However, merely noting the definition of piracy is unfair towards this area of extensive research and study. Beyond defining piracy, it is important to recognize the different dimensions involved in the act.

Who?

Piracy (What?) How? Why?

Figure 1: What is Piracy? ARORA 6

The first of many depends upon understanding the profile of a pirate in terms of who pirates or which demographic pirates. The second asks why these individuals or groups choose to pirate. And the third asks by how, or by which technologies, they achieve their goal. By exploring at least these three dimensions, piracy itself can be better understood by industry leaders, researchers, and policy makers.

Once the what, who, why, and how questions are explored, there are even more questions left to be answered. Understanding the basics about will supplant an investigation into understanding the ramifications of illegal copyright sharing and how organizations and countries plan to take action against infringers.

Who is a Pirate?—Profile of a Pirate

According to a 2012 global software piracy study conducted by the Business Software Alliance

(BSA) (Business Software Alliance), an international software alliance and anti-piracy advocacy group,

“well over half of the world’s personal computer users…admit they pirate software”. The group’s report was compiled through a survey administered to nearly 15,000 personal computer users from 33 countries, a figure which comprises at least 82% of the global PC market.

Despite surveying such a broad group of users, the question remains—is there a particular type of person who is more likely to pirate than other people with access to a personal computer?

According to a key finding on the BSA report, that answer was yes, “The users who say they pirate software most frequently are disproportionately young and male” (Business Software Alliance).

However, in contrast to the BSA’s international finding that males are most likely to pirate than females, the U.S. shows a different result. According to backgroundcheck.org, men and women are equally likely to pirate in the U.S (Online Piracy Statistics Infographic 2012).

Further, 70% of 18-to-29-year-olds brought pirated DVDs, copied files or discs from friends or family, or have downloaded music, TV shows, or movies for free. This means that in the U.S. at least, most college-aged and young adults currently pirate or have pirated in the past. Overall, within the U.S.,

46% of American adults report illegal file sharing. Interestingly enough, on top of the number of ARORA 7

Americans who have reported pirating, 24% of Republicans, 35% of Democrats, and 31% of

Independents reported copied or downloaded music for free (Online Piracy Statistics Infographic 2012).

From a U.S.-centric perspective, the profile of a pirate is a young, college-aged male or female, democrat-leaning voter. In contrast, the global pirate located in an emerging market is more likely to be identified as male and young. Clearly, the globally-focused BSA report and the BackgroundCheck report from the U.S. reflect different profiles of pirates. Certainly, with more country and region-specific research, more varied profiles of pirates are likely to emerge. However, regardless of which profile pirates or is likely to pirate, the reasoning and rational behind pirating are likely to be universal. While it is important to understand who pirates, it is even more important to understand why people pirate.

Why Pirate?

Unfortunately for those trying to understand why people pirate, there is no single reasoning that every pirate uses to justify their actions. For a pirate, there could be several reasons or incentives to pirate.

For most pirates however, the following table lists some of the most popular reasons:

Table 1: Common Reasons for Pirating

Common Reasons for Pirating 1 The content is not available legally. 2 The individual is unaware that pirating is illegal. 3 The individual believes that pirating is faster (and therefore better) than legally obtaining the content. 4 The individual already legally owns the content but wants additional copies. 5 The cost of legally obtaining the content is unaffordable or out of reach. 6 It is socially acceptable to pirate.

To pinpoint why individuals are driven or choose to pirate, researchers in the field have begun to apply psychological principles and theories to the discipline. One such theory is that of the Theory of

Planned Behavior. The Theory of Planned Behavior, introduced by Icek Ajzen, attempts to connect beliefs, attitudes, behavioral intentions, and behaviors together to explain why individuals do what they do (Ajzen). ARORA 8

Figure 2: Theory of Planned Behavior Chart

Each of the boxes in the diagram above affects the likelihood of a particular behavior occurring for an individual. Behavioral beliefs interact with normative beliefs and control beliefs to impact an individual’s attitudes towards a particular behavior, the perceived subjective norm about that behavior, and the perceived behavioral control an individual has in acting to make the behavior happen. All of these impact an individual’s intention to perform the behavior. Sometimes however, as shown on the chart, if an individual has enough confidence in performing the behavior, then the individual performs the behavior irrespective of intention or the other factors (Ajzen).

In terms of piracy research, some researchers have attempted to test the topic by applying the

Theory of Planned Behavior in studies. One researcher, Cheolho Yoon, analyzed responses gathered from

Chinese university students after applying the theory and found that, “…attitude, subjective norms, and perceived behavioral control, influence the behavioral intentions of individuals to commit digital piracy.

The attitude of individuals towards digital piracy is also found to be influenced by perceived benefits, perceived risk, and habit.” (Yoon). Through Yoon’s study, it appears that the theory can have applications in explaining why people pirate and gauging how likely they are to pirate in the future. ARORA 9

In another research paper titled, “Factors Influencing South African Attitudes toward Digital

Piracy”, researchers Kimi van der Byl and Jean-Paul Van Belle administered a revised Digital Piracy

Attitude Model incorporating individual and situational constructs using quantitative data. Van der Byl and Van Belle discovered that the, “constructs showing significant correlation to an individual’s attitude toward digital piracy were age, Machiavellianism, cognitive beliefs, positive affect beliefs, and perceived importance” (van der Byl and Van Belle). Similar to Yoon’s study, this paper highlighted that people, regardless of nationality or profile, pirate because they can and these findings agree with Azjen’s theory.

As it can be seen, there are various specific reasons why someone may pirate copyrighted content online. In addition to why, piracy researchers have begun to apply psychological theories such as the

Theory of Planned Behavior in order to gain a deeper understanding of why individuals pirate and what factors affect them in making a decision. In developing educational and awareness programs to limit piracy, knowing this information and conducting further research in the field may prove useful.

How Do We Pirate?

For the modern pirate with computer access and a reliable Internet connection, there are many ways to pirate content. And, depending on the method, each carries different risks in getting caught.

Globally however, the most popular of method remains to be “torrenting”. Torrenting stems from

BitTorrent, a popular software which uses Internet-based peer-to-peer (P2P) networks to large files and large amounts of data freely among users. Though BitTorrent and other clients enable users to share data, it is the peer-to-peer network that forms the backbone of torrenting and file sharing (Gil). As a note, torrenting or file sharing are not illegal processes; it only becomes illegal when the data being transferred and shared is copyrighted and done so without permission from the copyright holder.

Prior to the development of P2P, computers in a business setting did not possess a hard drive or any processing power. These computers, known as “dumb terminals”, would access software through a central server and save any data onto the central machine. Eventually dumb terminals evolved into personal computers that could store data and boot software locally without the need of a central machine ARORA 10

(Cope). However, once a central mainframe became unnecessary, a new way had to be devised to allow these newly independent machines to communicate and share files among one another. As a result, P2P networks developed.

Unlike in the past, peer-to-peer Internet networks enable individual computers to act as both servers and clients. This means that PCs on this type of network can store data and software, share this data with other peers on the network, and access and download data and software from other peer machines on the network. Computers on a P2P network set permissions to determine what data can be shared and to which machines (Cope). Some popular examples of P2P software through the early 2000s include , LimeWire, and .

The first generation of P2P networks maintained a central server that indexed all of the peer computers on the network and what files each computer had. When one peer made a request for a certain file, the central server would search the index for the file and display all of the available copies to the requester (Tyson). The requester would then choose a file and the two peers would handle the file transfer through the central server. Napster, the first file sharing program, used this process successfully until July

2001 when the service was shut down due to copyright infringement for facilitating the transfer process.

A major limitation of this first generation network was that only music files could be shared among peers, thus posing an issue of breaking copyright laws (Tyson).

Once Napster was shut down, the second generation of P2P networks arrived and diverged from their predecessor. Instead of using a central server to conduct file transfers, some new programs like

Kazaa opted to connect peers on the network to one another remotely (Watson). Others, like BitTorrent, created files containing metadata of shareable files and posted them to websites and trackers for download. Through BitTorrent, users select a torrent to download and then the client pulls the file data pieces from multiple peers who already possess the file. One similarity among 2nd generation P2P networks is that file exchanges are no longer limited to only music files; other software and data can be shared (Watson). ARORA 11

Today, internet users only need two real tools to perform piracy: a P2P software client, which are free and widely available online, and an Internet connection to query download links or torrents. Similar to the public nature of P2P clients, links to copyrighted material are widely available as well for download. The ease of access to both of these tools makes it very easy for users, regardless of level of computer expertise, to pirate content over the Internet. And, for those who struggle or do not know how to pirate content, there are numerous how-to guides and helpful documentation to overcome this hurdle.

Another option to find torrent and download data is through joining private torrent communities such as BitNation, Tvtorrents, and BitGamer. These elusive communities are not open for anyone to join—usually an invitation is extended or needs to be earned in order to gain entrance into the community and be able to access the group’s stored torrents. Communities may provide additional protections against getting caught by authorities because community member’s identities are verified, there may be download limits or restrictions, and joining these communities requires invitation. Further, these private communities may provide a greater selection of torrents, high quality files, fast download speeds, and a good social network for the serious torrenter.

In contrast, to legally download content, users need to create accounts with iTunes, Amazon

Music, or Rhapsody and share their payment information. These providers work with the music, movie, and other artistic content industries to set prices and content availability. Despite the Internet and many of these services having a global presence, not all content is available or priced equally in the world.

Further, some of these legal options may put a restriction on how many copies of a song or a piece of content can be accessed by different computers and devices. These legal restrictions can prove cumbersome and even seem unnecessary for already paid content. Separate from this qualm however, many legal services offer occasional treats or rewards for customers. While popular content is rarely offered for free to legal users, many of these services provide by newer or relatively unknown authors and artists in order to boost the newcomer’s presence.

Beyond what is described in this section, there are other ways to obtain digital content legally and illegally. However, in determining which software or method is right for an individual, the main factors ARORA 12 tend to be based on what type of content is desired by the individual, how tech-savvy the individual is, where the individual is physically located, and how much the individual values privacy. With these factors in mind, anyone online can find the right method(s) for use.

Impacts on Industries

After understanding the basic dimensions of piracy and copyright infringement, it is necessary to delve into exploring the impacts digital piracy has on industries, economies, and societies. By concentrating on this aspect of piracy, the motivations for wanting to implement graduated response plans can be better understood by lawmakers, industry executives, organizations, and Internet users.

Prior to Napster’s creation and distribution in 1999, the American music industry had enjoyed hundreds of millions of dollars from physical album sales alone. However, as the P2P software grew in popularity, the industry began noticing a decrease in sales. The industry reported that sales fell from 755 million in 1999 to 458 million in 2011—a sizeable drop. In 1999, the top album, “Millennium” by the

Backstreet Boys, sold 9.4 million copies while 2011’s top album, “21” by Adele, only sold 5.8 million

(Porter). This decrease, the music industry argued, demonstrated the detrimental effect P2P networks were having on physical sales.

The US movie industry avoided this same fate until Internet bandwidth improved, speeds increased, and more advanced P2P software came out in the mid-2000s. Since then, home entertainment sales, which largely contribute to movie revenues, fell consecutively from 2004 to 2010 (Porter).

Similarly, movie ticket sales have decreased compared to previous years—showing that less people are attending movies in theaters and purchasing tickets. To counter diminishing audiences from impact revenues, movie ticket prices have increased in recent years. Pirates illegally downloaded the Oscar award-winning movie, “The Hurt Locker”, over 7 million times—an amount that could have potentially added to the film’s trifling global box office revenue of $49 million (Porter). ARORA 13

Figure 3: Recording Industry Association of America; Digital Entertainment Group; Motion Picture Association of

America Revenue Comparison (Taken from The New York Times)

While the music and movie industries have experienced effects from digital piracy for years now, the publishing industry, despite only recently incorporating e-books a couple of years ago, is no stranger to piracy. According to an analysis conducted by Attributor, a Web monitoring company, 1.5 to 3 million queries were conducted daily in 2010 for versions of free pirated books (Porter). The impact to the publishing industry is demonstrated to be less than the impacts caused to the music and movie industries however.

In addition to these major player’s observations, smaller artists and groups have reported to also be impacted by illegal file sharing. Specifically, independent producers and creative artists claim that piracy is adversely affecting their abilities to raise money for small and mid-sized projects (Porter). From this statement, it can be argued that piracy hurts some of these artists’ capability to produce content for consumers and make an earning off of their creations. Some even go on to argue that because online piracy is so detrimental, creative artists may be less motivated or incentivized to create new works in the future; thus creating a mass exodus of creative industries and contents (Sanchez). ARORA 14

In spite of the negative repercussions brought on by copyright infringement, these industries are still performing well—better than even the U.S. economy. In a report produced on behalf of the

International Alliance (IIPA), a coalition representing the trade interests of several large creative industries, it is clear that the U.S.’s copyright industries have contributed a great deal of dollars to the economy compared to other industries, provided above-average wages for workers, and were relatively unaffected by unemployment cuts during the U.S. recessionary period. Further, this alliance earned revenue abroad and experienced growth through foreign sales and exports (Siwek).

Figure 4: IIPA Creative Industry Growth Rate (Taken from Arstechnica.com)

With all these positives, the music, movie, and publishing industries have attempted to lobby the country’s government into adopting anti-piracy measures. The reasons most often used by these organizations paint a picture of a struggling copyright industry rather than the thriving one that exists in reality (Anderson). And because of this blatant disconnect, some prominent public figures and organizations have begun to question and challenge the facts and figures provided and touted by these industries. ARORA 15

Julian Sanchez, a CATO think-tank writer, renowned editor, and internet blogger, has critiqued the copyright industry’s attempts to convince the U.S. government in creating anti-piracy and anti-privacy

Internet bills such as the Stop Online Piracy Act (SOPA) and Protect-IP Act (PIPA) (Sanchez). Through his research and analysis, Sanchez argues that piracy is not the big problem these industries portray it to be and, as a result, does not merit government involvement.

He is not alone in his conclusions; numerous studies conducted on the impacts of piracy reveal that there is a minimal affect or that it is nearly impossible to quantify the effects of illegal file sharing on an economy. An analysis conducted by Felix Oberholzer-Gee, a Harvard University researcher, showed that “[illegal] downloads have an effect on sales that is statistically indistinguishable from zero”

(Oberholzer-Gee and Strumpf).

Separate from Gee’s article, another paper titled, “The Impact of Illegal Peer-to-Peer File Sharing on the Media Industry”, shows that, “Unauthorized downloading of music files over P2P networks may actually increase sales of legitimate products.” Goel and his colleagues go on to reason that an increase occurs because people like to experience goods before investing in them and by pirating content, people can be persuaded to legally purchase the content (Goel, Miesing and Chandra). As it can be seen, even academic research papers provide a differing conclusion than what the copyright industry advertises.

From this discussion, it remains unclear if and to what extent illegal copyright sharing affects the copyright industries and overall economy. Although the connection is vague at this moment, the industries continue to lobby and assert that Internet piracy poses a major threat to its longevity and future success. Opposing groups in the U.S. contest the industry’s claims by bringing up the industry’s economic successes in the past decade while supposedly facing a major piracy threat (Kain). However, despite the clash faced domestically in the U.S. between the copyright industry and several Internet freedom groups, the industry has begun to work and implement anti-piracy initiatives internationally with the help of foreign governments. ARORA 16

France

In 2007, it was estimated that digital piracy had created a profit loss of €1.2 billion in France’s entertainment sector as a whole. Specifically, the video production industry had been hit the hardest; creating a loss of €605 million (Sookman). The music and book industries also faced similar albeit lesser losses; €369 million and €147 million respectively. Besides profit loss, the French National Assembly’s report also purported that around a total of 5,000 jobs had been lost within these combined industries.

Prior to HADOPI, it was reported that Internet digital piracy and the use of peer-to-peer networks for illegal downloading was on the rise in France. While laws were in place to prosecute and impose steep penalties on infringers, actual criminal cases against the number of Internet subscribers pirating were significantly low—rendering the legal framework impractical.

After multiple revisions and battles arguing over the extent of infringing human and privacy rights, France’s highest constitutional court approved a three-strike anti-piracy law called “the High

Authority for Transmission of Creative Works and Copyright Protection on the Internet” or HADOPI in

2009. With the passage of HADOPI, a new governmental agency called the Rights Protection Committee

(RPC) was created with the intention to strictly enforce the protections of copyrighted content on the

Internet (Sookman). HADOPI would protect against digital piracy on the Internet through careful monitoring and partnerships with French Internet Service Providers (ISPs) and music and movie industries.

Specifically, the agency would be run by 9 board members appointed by the government, legislature, judicial bodies, and by the Superior Council of Artistic and Literary Property. This group would report directly to the French Ministry of Culture and would ultimately have powers to police

French Internet users. The agency would track P2P networks for suspicious activities, work with ISPs to receive names corresponding with captured internet protocol (IP) addresses, and send warning notices to the individual linked to the account. ARORA 17

As a result of HADOPI, French ISPs were charged with greater responsibility for monitoring, informing, and communicating with their subscribers of any infringement activity and potential consequences after infringing (Sookman). ISPs would also have to communicate and provide copyright infringer’s personal information to the RPC for legal action after illegal file sharing was detected.

Though HADOPI is known as a “three-strike” bill for its crackdown on illegal P2P file sharing,

HADOPI also emphasizes making legal content more accessible and available online for download and purchase. One result from the bill’s intention was the creation of a music card for Internet subscribers between the ages of 12 and 25 (Sookman). The government subsidized card would enable purchase of online music at a low cost through a legal online service in efforts to increase legal sales. Further, the law shortened the length of time for release of media on video, pay-per-view, and free television mediums— making digital content not only more affordable but also more readily available for legal consumption

(Sookman).

With the implementation of HADOPI, a total of three warnings are sent to users suspected of pirating copyrighted material. In September 2010, the first wave of warning letters was sent out to unsuspecting French internet subscribers (Andy). The first offense, or “first strike”, results in the agency sending an email message to the offending internet access subscriber. This warning specifies the time the perceived infringement occurred and, as a result, the ISP is required to monitor the subscriber’s internet connection. In addition to the ISP’s increased scrutiny on the subscriber’s internet activities, the subscriber is also invited to install a filter on his connection to also better self-monitor against repeat infringing.

If within the next six months of issuing the first warning further infringement is suspected, then the second warning is sent out. In the spring of 2011, the first wave of second notices was sent out to subscribers (Andy). The second “strike” consists of alleged infringers receiving a certified letter with similar content included in the first email warning. Unlike the first warning, if the accused subscriber fails to cease infringing copyright laws for a year after being notified then the third strike is taken. ARORA 18

Sometime during the summer of 2011, subscribers who continued infringing in the eyes of French law found themselves on the receiving end of the third “strike” (Andy). In the third “strike”, the internet subscriber’s ISP suspends the offender’s internet service for a period ranging from two months to a full year. Further, the offender is blacklisted from receiving service from other ISPs for the duration of the period. And, despite the suspension, the offender is required to continue to pay for service fees and may face additional charges arising from service termination.

Once the third strike has been issued, the accused may appeal to court to dispute the infringement allegations. However, even with challenging the accusation, the accused can merely reduce the duration of the sentence rather than outright cancelling it. Demonstrating one’s innocence may prove difficult because the burden of proof is on the appellant in challenging the allegations in court.

Since HADOPI became law, limited yet growing numbers of strikes have been issued against internet subscribers (Andy). The following charts display the number of first, second, and third warnings given out since HADOPI’s conception:

HADOPI First “Strike” Issued Warnings

Figure 5: HADOPI First Strike Warnings (Source: TorrentFreak)

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The red line in this graph reveals the cumulative number of “first strike” warnings issued:

1,599,847. The highest number of first warnings sent out was in May 2011 with nearly 110,000 warnings.

HADOPI Second “Strike” Issued Warnings

Figure 6: HADOPI Second Strike Warnings (Source: TorrentFreak)

The red line in this graph reveals the cumulative number of “second strike” warnings issued:

138,953. Compared to the first waves of warnings, the highest number of second wave warnings, numbering around 16,000, was sent out in June 2011.

HADOPI Third “Strike” Issued Warnings ARORA 20

Figure 7: HADOPI Third Strike Warnings (Source: TorrentFreak)

The red line in this graph reveals the cumulative number of “third strike” warnings issued: 488.

December 2011 produced the highest numbers of third strike warnings—amounting to a little over 500 warnings—however it appears HADOPI consecutively sent high numbers of warnings from November

2011 until March 2012.

Studying the graphs reveal that after the first and second warnings are issued, less than 50 infringers are sent a third and final warning. For those opposed to HADOPI, these results mean nothing.

Some believe that HADOPI was a failure because those who are serious about pirating have found new methods for pirating and are sneaking past ISPs who only inspect P2P networks. For HADOPI supporters however, this data supports the notion that the law has reduced copyright infringement on the Internet and that the law is a success.

In fact, a study conducted by Danaher et al. on the effect the HADOPI law had on music sales in

France showed that French iTunes song sales rose by 22.5% on average. Album sales on iTunes received an even larger increase by 25% (Danaher, Smith and Telang). Further, music genres which were heavily pirated received the greatest legal purchases after HADOPI was implemented. In terms of cost, the study also suggested that iTunes revenues for the major record labels increased on average by €9.63 million per year after HADOPI’s passing (Danaher, Smith and Telang). As a whole, the study showed that HADOPI- ARORA 21 type of laws, where there is education, awareness, discounted price incentives, and sanctions involved, can be effective and help floundering media sales.

In retaliation to the study, Le Monde, a premiere French newspaper, conducted an experiment by comparing the rise in iTunes sales with Google Trends during the same periods the study covered. The Le

Monde reporter discovered that peaks appeared with the search term that corresponded with the sales increases on iTunes (Leloup and Baruch). Further, both of the peaks were related to periods where new iPhones were launched and the holiday seasons occurred. From these findings, the newspaper argued that

HADOPI may not have played such a big role in driving iTunes music sales.

After Le Monde’s research was unveiled, the authors of the original study rebutted against the newspaper’s findings. Though the debate among researchers and French newspapers continues on over

HADOPI’s impact, it is clear to any observer that understanding and isolating HADOPI’s effects are difficult and not clear cut. In fact, there are several concerning issues about HADOPI that critics have touted since the law first appeared in the late 2000’s.

La Quadrature du Net, a French digital rights and freedoms advocacy group, heavily opposed and campaigned against the passage of the law on the grounds that the law was draconian in nature and would be ultimately ineffective in reducing illegal file-sharing (Pfanner). In recent times however, HADOPI critics eye the costs associated with the law and the extremely low conviction rate to be the law’s undoing.

Over the years, French lawmakers learned that convicting subscribers of copyright infringement only on an IP address is extremely difficult to do by solely monitoring P2P networks. For this reason, legislators added in a clause in HADOPI that requires subscribers to secure their Internet connections. As a result of this new rule, the first Frenchman was convicted through HADOPI and had to pay a fine on

October 2012—3 years after the law’s passage. To add insult to injury, the man’s crime was not illegal file sharing but rather it was failing to secure his internet connection. The resulting fine he paid for not abiding to the law amounted to only €150—a paltry amount compared to the millions spent since the ARORA 22 law’s enactment (Marchive, Three years and millions of euros later, Hadopi has its first conviction. Now what?).

For the content owners, HADOPI is relatively inexpensive—content owners only pay a service provider to monitor P2P networks for illegal file-sharing. The real expense for HADOPI comes in when

ISPs warn subscribers of infringement and the government (and taxpayers) pays millions to the ISPs for this responsibility. Even Aurelie Filippetti, the French Culture Minister, has stated that, “In financial terms, 12 million euros a year and 60 officers, it’s an expensive way to send a million e-mails…[and]

HADOPI has not fulfilled its mission to develop legal offers” (enigmax). In addition to the law costing excessive amounts of money for little return, there are issues within the law.

Originally HADOPI aimed to reduce online illegal file-sharing while educating users about piracy through providing incentives and awareness. With the addition of securing Internet connections, HADOPI was also expected to suggest ways and tools subscribers could secure their connections. As of today,

HADOPI has yet to provide any guidelines on this facet and instead has begun ignoring this clause because it is beyond the law’s mission.

HADOPI also intended to create government subsidized music cards for certain subscribers however, most of the money in the budget has not been spent because the cards system was difficult to use. Eventually, the card concept was removed because of all of the issues with this incentive.

With all of these issues, HADOPI still lives on. Surprisingly enough, there are plans for HADOPI to evolve into something else rather than ending as a law despite its problems. In the future, it is predicted that the law could increasingly use tech companies to be more involved in online content distribution process in order to tackle piracy. These companies could create systems that would automatically remove illegal copyright content through digital watermark identification (Marchive, France's anti-piracy watchdog ponders evolution, faces extinction). Another change HADOPI could undergo is the ability to identify ISPs who fail to comply with identifying and notifying subscribers of infringement activity. After identifying these ISPs, HADOPI could impose fines and/or public shaming of the organization as a result. ARORA 23

Regardless of how HADOPI may change in the future, the changes to the law will be brought on upon by how France’s Canal+ task force, a group aimed to protect the country’s digital works in the digital age, chooses to function and focus on (Marchive, France's anti-piracy watchdog ponders evolution, faces extinction).

By studying HADOPI, other countries can better understand both the benefits and costs associated with adopting an anti-piracy response plan. Though it is still unclear how effective a

HADOPI-type of law or legislation may be in actually curbing digital piracy, it is important to keep monitoring the situation in France.

China

In China, copyright infringement is ubiquitous. Consumers are able to buy numerous ripped and illegal versions of Chinese and Hollywood films on street corners and inside private shopping centers.

And, if for whatever reason consumers are unable to purchase or attain an illegal copy of content, there are always opportunities to buy knock-offs or imitations called shanzhai (Rapoza). Compared to the

French or even the Americans, the issue of piracy in China transcends into an entirely different playing field for consumers, levels of government, and numerous industries with the desire to protect their intellectual property.

According to a 2011 BSA Global Software Piracy Study report, China’s software piracy rate is around 77% (Business Software Alliance). Though this rate may seem startling, it should be noted that this is a decrease and a record new low from previous years. Further, it is estimated that the illegal software market is worth almost $9 billion dollars. This number, compared to China’s legal software market value of $3 billion, means that China’s illegal market is the second largest in the world in terms of value (Lee).

Despite these shocking numbers, experts have struggled to understand why China’s infringement rates have been so high compared to global piracy levels. Some, like Tom Doctoroff, a marketing guru at ARORA 24 a prominent firm and author, argue that infringement is a cultural value that is expected for China because of its history (Rapoza). In his publishing titled “What Chinese Want”, he writes:

As in dynastic times, anything inconsistent with the government’s role of promoting a

harmonious society will be prohibited. Notably, groups must never seek to become alternative

centers of authority and challenge the party, and explicit or extramarital sexuality is always

banned. The latter is driven by both the sensitivities of a generally conservative population and

the government’s patriarchal responsibility to protect the moral standing of the masses. (quoted in

Rapoza)

Based off Doctoroff’s analysis, it appears the real issue lies with the notion of individual rights; there is no notion of individual rights in ancient or modern Chinese culture. Beyond the lack of individual rights, China’s cultural and legal system is not structured to protect innovative individuals or their ideas

(Rapoza). This is in stark contrast to the U.S.’s and other western legal systems where individual rights hold weight. All of these different facets eventually contribute to the Chinese not viewing piracy or content imitation as inherently wrong. In fact, many Chinese consider these acts pragmatic and overall the smarter, more creative thing to do (Rapoza).

The Chinese government is aware of the rampant digital piracy that occurs within its borders but has taken very limited action against infringers. This lack of action could be because either the government in unable or unwilling to do so. It is likely that China’s censorship practices play a role in determining the government’s hands-off approach; if certain content are censored, then demand may actually increase for the contraband item and piracy results. Doctoroff says that the government‘s focus is on maintaining itself as the central power with authority, not enforcing copyright laws on the masses. As long as infringement poses no threat to the government’s authority, then the Chinese government turns a blind eye to the piracy situation.

Internationally however, the Chinese government knows that the numerous copyright infringements occurring within the country cannot be justified to the World Trade Organization (Lee). ARORA 25

However, as seen above, as long as the government’s power is not threatened, the government cannot be expected to act on limiting piracy.

For companies entering the Chinese market in hopes to attract new consumers, this is bad news.

In order for these organizations to make money, it appears that the only way to compete with rampant piracy and a passive government is by lowering their profit margins next to nothing in order to compete

(Rapoza). It is likely that companies in China will be unable to be greedy and instead swallow the bitter pill that some profit is better than no profit at all.

China’s attitude towards piracy is extreme compared to global standards but not alien enough that it is the only country in the world to adhere to this behavior. There are several countries besides China, which also practice turning either a blind-eye towards digital piracy or do not prioritize it. As China grows to become a global superpower and more modernized however, it is likely China will have to start addressing its rampant piracy problem.

U.S.

The copyright infringement landscape in the United States is decidedly different from that of

France, China, and other countries in the world. In 2011, the BSA reported that “the United States has the largest market for software, spending $42 billion, and the lowest piracy rate at 19%”. Compared to

China’s rate of 77% on the same report and the global piracy average of 57%, the US piracy issue is relatively smaller in scope and size (Fitzgerald) . Another group however, has another take with more startling figures. The Center for Copyright Information (CCI), states that content theft costs the US economy $58 billion, 373,000 American jobs, and $16 billion in lost employee earnings every year, and also costs federal, state, and local government $2.6 billion each year in lost tax revenue (FAQ’s on The

Center for Copyright Information And Copyright Alert System). Despite the difference in size however and the previously discussed creative industry’s economic success, piracy, according to various content producing industries, needs to be combatted within the country. ARORA 26

For this purpose, the Center for Copyright Information was established through a joint partnership between film, music, and television industries and ISPs in order to deal with this extensive problem. The

CCI touts that despite copyright infringement in the US being economically damaging, most users would cease content theft if they are alerted it is occurring, told it is illegal, and shown that there are consequences associated with the act. From this research, the organization’s mission aims to educate

Internet subscribers about the importance of copyright protection and lawful ways to obtain copyrighted content. Additionally, the Center plans to help develop and confirm best-practices for a new system of progressive Copyright Alerts. This new system, the organization hopes, will resemble credit card fraud alerts, which will alert subscribers when potential content theft is identified (FAQ’s on The Center for

Copyright Information And Copyright Alert System).

As a result of the collaboration between these industries, a new copyright alert system was created. On July 7th, 2011, U.S. ISPs worked with the Motion Picture Association of America (MPAA),

Independent Film and Television Alliance (IFTA), Recording Industry Association of America (RIAA), and the American Association of Independent Music (A2IM) to create the first ever large-scale voluntary graduated response program. This program, called the Copyright Alert System (CAS) or “Six Strikes”, attempts to be:

a consumer-focused process for identifying and notifying residential wired Internet access service

customers of the participating ISPs (other than dial-up subscribers) who receive multiple

notifications of allegations of online infringement made via P2P networks and applications, in an

effort to educate consumers, deter online infringement, and direct consumers to lawful online

legitimate sources of content online (FAQ’s on The Center for Copyright Information And

Copyright Alert System).

While the system is the first of its kind released in the US, there are several things to note in order to separate this plan from the policies in place in France and China. First, the Copyright Alert System issues six warnings than the three issued by HADOPI. Second, no new laws or formal legal procedures ARORA 27 are created and the government is not officially involved in this system (FAQ’s on The Center for

Copyright Information And Copyright Alert System). This means that US citizens do not presently face legal action issued on behalf of the government. Third, regardless of the number of warnings issued to a subscriber, a subscriber’s Internet access will never be suspended. Instead, the subscriber’s speeds may be throttled for a brief period of time or other “mitigating measures” may be taken at the discretion of the

ISP.

For clarity, the chart below summarizes the differences discussed thus far in dealing with piracy among the three countries:

Table 2: International Anti-Piracy Plan Comparison

United States France China Anti-piracy Plan? Yes Yes No Name of Plan Six Strikes/Copyright HADOPI -- Alert System (CAS) Release Date February 2013 October 2009 -- How many “strikes”? 6 3 -- Federal Government No Yes Occasionally Involvement? Infringement Unknown Est. 1.5 Million+ Unknown Warnings Sent out To Date

With the Six Strikes plan, ISPs are expected to come up with individual monitoring and warning issuing policies. According to the CCI, regardless of which policies and systems an ISP adopts, content companies will not know who downloaded and shared copyrighted content unless a subpoena or court order is issued. However, the process by which infringers will be discovered is quite simple. Leading technology companies have developed state-of-the-art software to participate in P2P networks to identify illegal content distribution and record the IP addresses involved in the illegal distribution (FAQ’s on The

Center for Copyright Information And Copyright Alert System). Content owners will provide these IP addresses to ISPs, ISPs will then identify the associated account, and will forward an alert to the subscriber. ARORA 28

Though there are some minor differences in how each ISP implements and creates their internal detection and notification tools, the alerts delivered to subscribers all adhere by the same standards, regardless of the ISP. Each of the warnings is automatically sent electronically through email to the

Internet subscriber’s email account after possible infringement is detected. Depending on the warning number, the subscriber may or may not have to take action or deal with certain consequences.

The first and second warnings notify customers that one or more copyright owners have recorded possible copyright infringement activity on the customer’s account. This warning is delivered through email but can also be delivered through a voicemail. Within the email, a link is provided to the customer with information on how to check if file sharing software is installed on their devices and how to remove them. Further, the link provides information on where the customer can obtain similar content through legal sources.

The third and fourth warnings redirect an offending customer’s browser to a special web page which lists all of the past alerts issued to the account. Once the customer acknowledges them, then the customer is guided to watch a short video on copyright law and the consequences of copyright infringement. Before the user can go back to regular web activity, the user must acknowledge watching the video in order to create a record that these alerts have been received.

The fifth and sixth warnings follow the format of the third and fourth warnings in that subscribers are once again redirected to a special web page in their browser. On this page, several options are given to the subscriber to choose from. The first option is for the subscriber to agree to a temporary (2-3 day) speed reduction or throttling. The second option is to agree to the throttling but have the consequence take effect after a delayed period of time. The third and final option given to subscribers is the ability to ask for a review of the validity of all of the alerts issued by the ISP. If this last option is selected, the subscriber must pay a small fee in order to arbitrate the case. If the infringement allegations are wrong, then the subscriber will receive his or her arbitration fee back (FAQ’s on The Center for Copyright

Information And Copyright Alert System). ARORA 29

For the fifth and sixth warnings, there may be other and/or additional mitigating measures taken by a subscriber’s ISP. According to the CCI’s FAQs guide, ISPs are allowed the following right after a subscriber has been alleged of infringing more than four times:

At this time, the ISP may take one of several steps, referred to as “Mitigation Measures”

reasonably calculated to stop future content theft. These Mitigation Measures may include, for

example: temporary reductions of Internet speeds, redirection to a landing page until the

subscriber contacts the ISP to discuss the matter or reviews and responds to some educational

information about copyright, or other measures (as specified in published policies) that the ISP

may deem necessary to help resolve the matter (FAQ’s on The Center for Copyright Information

And Copyright Alert System).

Some critics worry that ISPs may resort to banning or terminating subscribers permanently from their Internet service but the CCI claims that the alert system does not require the ISP to take these actions. However, the CCI does note that section 512 of the Digital Millennium Copyright Act requires that ISPs have in place a termination policy for repeat copyright infringers as a condition of availing themselves of the Act’s “safe harbor” provision. This is why the CCI argues that subscribers have a right to know if it has been alleged that content theft is taking place on their accounts and have the ability to respond. Further, the CCI states that copyright owners can also seek remedies directly against the owner of an Internet subscriber based on any infringement evidence that may be collected (FAQ’s on The Center for Copyright Information And Copyright Alert System).This means that for infringers who have received several warnings, content copyright owners may use the alerts against the subscriber in court to win over their case.

Since the creation of the CCI and the Six Strikes Plan, numerous concerns have been voiced about this new system. One major concern is how subscribers are identified and alleged of infringing on peer-to-peer networks. The copyright owners currently plan to monitor P2P traffic from public BitTorrent trackers but the system will not identify those users who attempt to anonymize their IP through virtual ARORA 30 private networks (VPN) or . The Electronic Frontier Foundation (EFF) further argues that ultimately this system falls short by casting a wide net that impacts many people’s privacy but is unable to capture those subscribers intent on pirating the most and avoiding it (Nazer).

Another area of concern for U.S. Internet subscribers is using the CAS arbitration system to defend against allegations of copyright infringement. Subscribers can only dispute claims after the third of fourth strike alert is delivered (Nazer). Once the sufficient number of warnings has been delivered to the subscriber, a subscriber has no more than 14 days to accept an independent review after the ISP offers the option. If at least half of the notices are successfully challenged, all of the allegations will be cleared.

However, the issue the EFF has with the arbitration process is related to the types of defenses a subscriber can use. Only the following defenses can be used during the review process with the American

Arbitration Association:

Table 3: CAS Arbitration Available Defenses For Use

 Your account was incorrectly identified as the source of the file in question.  The file was shared by an unauthorized user of your account, whose use you were not aware of and could not have prevented (e.g., you have an open WiFi connection).  You had permission from the copyright owner to share the file.  The file was mislabeled or misidentified and did not “consist primarily” of the alleged copyright work at issue, but rather contained other, non-infringing material.  The work was published before 1923.  Your peer-to-peer reproduction and distribution of the file was under U.S. copyright law.

While these defenses may suit some subscribers, there are instances were a subscriber’s actions can still be treated as infringement. An example of this is if content is shared that is in the for a reason other than being published before 1923. Regardless of the reasoning, the subscriber will still be guilty of copyright infringement under the system. And, once a decision has been reached, there is no appeal process for the subscriber (Nazer).

Fortunately, for subscribers who are disappointed in the system or do not wish to participate, there are few other, smaller ISPs that are not involved with the CCI’s system. Unfortunately however, many of these non-participating ISPs are regional and physically out of reach for Internet subscribers. For ARORA 31 those businesses maintaining an open WiFi network, such as cafes and restaurants, it is unclear how they will be impacted by this strike program (Nazer). The program will also attempt to get Internet subscribers to be more mindful of their activity and who can access and interact through the account.

For the major ISPs like Time Warner, , and Verizon, their Six Strikes plans have only just gone into effect during February and March of 2013. It is currently unknown if any official notifications under CAS have gone out to these company’s subscribers. And consequently, it is too soon to understand the true effects and implications of this volunteer graduated response plan; only time will reveal whether the Copyright Alert System will attain the same success or failure as other international anti-piracy efforts implemented before it.

Survey

In an attempt to gain a better idea of how the Copyright Alerts System and other graduated response programs, like HADOPI, would be received by U.S. residents, a survey was created by a small team of university researchers. The survey asks questions based on four different treatment groups and piracy scenarios within the survey: the control group, the individual group, the societal group, and the combined group.

The following scenarios were the same for each of the treatments:

Table 4: Survey Treatment Decisions

First Piracy Decision: Second Piracy Third Piracy Decision: Fourth Piracy Decision: Decision: Imagine a situation Imagine a situation Imagine a situation Imagine a situation where your friend has where you followed the where you followed the where you followed the told you about a piece link to the pirated link to the pirated link to the pirated of software that you software and were software and were software and were would probably like, caught pirating. Your caught pirating for third caught pirating for and has sent you a link friend has now told you time. Your friend has second time. Your to pirate it. If caught about another piece of now told you about friend has now told you pirating software by the software that you would another piece of about another piece of authorities, you will also probably like, and software that you would software that you would receive an email has sent you another also probably like, and also probably like, and message from their link to pirate it. If has sent you another has sent you another ARORA 32

Internet provider, caught by the authorities link to pirate it. If link to pirate it. If stating that you were a second time, you will caught by the authorities caught by the authorities caught pirating. Also, receive a certified letter a third time, your a fourth time, you will your Internet connection from their Internet Internet speeds will be be added to a National will be monitored for provider, stating that significantly reduced. Internet access blacklist future piracy behavior. you were caught Also, your Internet and your Internet access pirating for the second connection will be will be revoked for up time. Also, your monitored for future to a year. Internet connection will piracy behavior. be monitored for future piracy behavior.

However, beyond these decisions, the individual, societal, and combined treatments have additional repercussions added to each of the described descriptions above.

Table 5: Survey Other Treatment Repercussions

Individual: Societal: Combined: In addition to being caught by the In addition to being caught by the In addition to being caught by the authorities, you could be sued by authorities, the losses suffered as authorities, you could be sued by the copyright owner for a result of your software piracy the copyright owner for thousands of dollars for pirating decrease the profitability of the thousands of dollars for pirating their software. Also, the pirated software industry, and jobs held their software. The pirated software might expose you to a by employees of the software software might also expose you computer virus and other industry may also be affected. to a computer virus and other computer security risks. computer security risks. Further, the losses suffered as a result of your software piracy decrease the profitability of the software industry, and jobs held by employees of the software industry may also be affected.

The control group’s repercussions are very basic and describe only general penalties an individual faces after being caught pirating under a graduated response system. In comparison, the other three treatments incorporate the general consequences present in the control group with more specific repercussions that target the individual personally, impacts on the society an individual lives in, and a combination of both non-control treatments. ARORA 33

Each treatment asks a series of similar questions and the majority of questions are posed in the

Likert scale ranking format, ranging from 1 - 7. Questions regarding demographics, normative beliefs, attitudes, ability, societal views, perceptions, and others were asked within the survey to gauge various facets of piracy behavior.

The survey was deployed on the University of Arizona campus through two courses as extra credit opportunities and current college students were encouraged to complete the survey. As mentioned in an earlier section, the U.S. profile of a pirate is young and college-aged. For this reason, the survey was taken by college students because it is important to understand how this demographic would respond to graduated response measures. In the future, it would be interesting for this survey to be administered to other, non-majority pirating profiles in the U.S.

197 students successfully completed the survey. For analysis purposes, the responses for three particular statements were analyzed after each scenario was introduced. Each of these questions was answered based on a scaled response of 1 – 7, where 1 meant “I strongly agree” and 7 meant “I strongly disagree”. For the last question however, student responses had to be reverse-coded in order to not contradict their responses for the first question. As a result, question 3’s scale resembled 1 meaning “I want to pirate” and 7 meaning “I want to buy” instead. The three analyzed statements were:

 “I think I may commit software piracy in this type of situation in the future.”

 “If I had the opportunity in this type of situation, I would commit software piracy.”

 “I would never commit software piracy in this type of situation.”

After assessing the scaled responses for each of the questions, an average was compiled and counted on a 1 – 7 range with 1 indicating a strong intention to pirate and 7 indicating a strong intention to not pirate and obtain content legally. The number of responses were sorted and displayed on graphs for each treatment scenario. Additionally, statistical t-tests were conducted to compare between treatments to see how effective each treatment was compared to the others. ARORA 34

Analyzing these questions together revealed a survey taker’s overall intention to pirate in the future in response to the presented treatment level. For people and organizations interested in piracy, understanding intention is important because it is a major factor driving the behavior. By studying intention in relation to the treatment consequences, perhaps progress can be made within the field from both theoretical and application perspectives.

Of the 197 students who responded and fully completed the survey, the following results were observed:

Figure 8: Control Treatment Graph

In the control group, 49 survey takers were given the control scenario. After taking the averages of the three aforementioned questions, survey takers were spread out in their responses after being shown the first level of repercussions. The first level entailed that if a survey taker was caught pirating the first time, an email warning would be sent to the pirate. In this level, there was a slight lead on survey takers being slightly likely to legally obtain content than not but there was no one unanimous intention. In the second level, where individuals were told they would receive a certified level if they were caught pirating a second time, survey takers were either neutral about their intentions to pirate or legally purchase content or slightly more likely to legally purchase content. ARORA 35

After the third level of repercussions, where a user’s internet speed would be throttled after getting caught a third time, most survey takers would be slightly inclined to legally purchase content to all the way to only legally obtaining content. On the fourth level, where survey takers were told that if caught a fourth time their Internet access would be revoked for a year, the majority of survey takers responded by stating they were fully determined to only legally obtain content.

Figure 9: Individual Treatment Only Graph

Within the individual treatment, 50 survey takers completed this scenario. In addition to the base repercussion levels the control showed its subjects, the individual treatment also included in the scenarios the possibility of being sued by copyright owners, contracting computer viruses, and incurring other security risks by pirating.

In the first level, responses were varied. Some survey takers were less likely to pirate content, be less likely to legally obtain content, and others were solely determined to obtain content legally. After the second level was shown to survey takers, most survey takers responded with a neutral intention to pirate content, neither fully supporting pirating or legal procurement. In the third level, many users were either less likely to legally obtain content or were solely focused on only obtaining content legally. Curiously enough, the fourth level invoked a nearly identical response in survey takers as the third level. ARORA 36

Figure 10: Societal Treatment Only Graph

A total of 49 survey takers completed the societal treatment in the survey. As with the individual treatment, the societal treatment incorporated the base scenarios presented in the control treatment.

However, the societal treatment also told survey takers that in addition to facing the four different repercussions, the software industry’s profitability would suffer and that jobs held by employees of the software industry could also be affected as a result of the piracy.

In the first level, survey takers were most likely to either be slightly inclined to legally obtain content or likely inclined to obtain content legally. After the second level, most survey takers were spread out in their intentions. A few were less likely to pirate while most were neutral, slightly likely to legally obtain content, and determined to solely obtain content legally. Similar with the second level, a nearly identical response was measured in with the third level. However, in the third level, survey takers were slightly more likely to only obtain content legally. In the fourth level, a great majority of survey takers were most likely to only solely obtain content legally.

ARORA 37

Figure 11: Combined Treatment Graph

49 survey takers completed this particular treatment. In this treatment, both the individual and societal supplemental consequences were included alongside the control treatment’s scenarios. Survey takers were told that in addition to facing the four levels of repercussions, they could be sued by copyright owners, could contract computer viruses, incur other security risks through pirating, cause the software industry to lose profitability, and cause the loss of jobs of workers in the software industry.

Compared to the other treatments, it is immediately apparent that when survey takers were told about all of the potential consequences, nearly all held at least a neutral intention towards pirating or legally obtaining content, regardless of the level. For all levels except the first level, most survey takers had intentions to only legally obtain content. In the first level, survey takers were most likely to be slightly likely to obtain content legally. These results stand apart from all other treatments and it appears to be quite successful in deterrence.

Now that all of the treatments have been described, the following figure displays all four graphs for comparison purposes: ARORA 38

Figure 12: All Treatment Intention Comparison

Below is a line graph comparing the means of each treatment and repercussion levels:

Figure 13: Treatment Deterrence Graph ARORA 39

In comparing the different treatments, it appears that by far, the combined individual and societal treatment work mold individual’s intentions to be inclined to at least legally obtain content at all levels. In second place, the societal treatment attempted to deter individuals from pirating as well. Finally, in third place, both individual and the control treatments tied in producing the least deterrence.

It is interesting to note however, that the control provides a greater deterrence response in the fourth level than in the individual only or societal only treatments. When the two treatments are combined however, they produce a response as great as the control in the fourth level. This could be attributed to the fact that people make more educated decisions when they have more complete information, or in this case, are aware of all of the consequences. With greater awareness, individuals are less inclined to illegally pirate and are instead more likely to legally obtain content.

The results from this study, although currently limited, are significant. These results provide insight into how a graduate response program may be received by individuals in the U.S., especially those who fit the pirate profile. However, regardless of how well-designed a response program is or well- funded, a key takeaway from this survey study is that the audience must be made aware of all of the consequences their actions cause, not just the sanctions they face.

In order to build a better case, additional research will need to be conducted. With the recent implementation of the Copyright Alert System, perhaps ISPs and the industries backing the efforts can begin their own testing similar to how this study was conducted.

Conclusion

Depending on who is asked piracy can either be a major issue or a non-issue. Creative industries argue vehemently that digital piracy hurts their bottom line and dissuades them from producing new, innovative content. Privacy groups however, argue that the creative industry has blown the piracy issue out of proportion and is seeing soaring profits regardless. ARORA 40

In attempts to understand who is right in the argument, researchers in the field have begun assessing and exploring pirate behavior by including and applying psychological principles. While progress has been made, it is still unclear if the graduated response measures so frequently touted by anti- piracy groups are effective in curbing and deterring piracy behavior within pirate demographics. Even attempting to study the piracy issue internationally such as in France and China has yielded few helpful insights.

And, despite all of the protests U.S. Internet freedoms groups have displayed and persuading they have attempted, a new voluntary graduated response plan has been introduced in the country when it is still entirely unclear how successful HADOPI was in France. Millions of Americans who may or may not be aware of the Copyright Alert System or Six Strikes plan are unknowingly being monitored for any suspected P2P illegal activity. And currently, while the government is uninvolved, unlike in France, that may soon change if the creative industries can prove the CAS program’s success and can encourage legal prosecution and support from the executive and legislative branches.

Regardless of what may happen in the future, the study featured in this paper has shown that intentions driving individuals towards piracy behavior, regardless of whether it is good or bad, can be deterred if people are told of all of the negative consequences associated with their actions. If anti-piracy groups want to limit casual piracy, then they may want to focus more on awareness measures than actual penalty measures. For opponents of graduated response and piracy crackdowns, it is possible that there are positive consequences from pirating and that if awareness is brought upon these positives, then the intention to pirate may actually increase instead.

In the grand scheme of things, there is still plenty we do not know about piracy despite it being an ubiquitous global activity that has caught the attention of several major industries. If any decision or course of action is to be made regarding piracy, then additional research is necessary. If better tools can be created to understand piracy’s impacts on economies, then arguments made by either side can become more substantial. Otherwise, in the meantime, perhaps it is time for the creative industries who claim to be impacted by pirates to look into better technology, content delivery systems, and sales modules in ARORA 41 order to improve their chances in outsmarting the legion of young, 20-something, ramen-eating college- aged pirates.

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