‘How illegal reproduction of work influence the profitability of businesses’
Piracy is the unlawful reproduction i.e. either copy or forging of work (software, recordings or motion pictures). Piracy has become easier with the advanced evolution of technology and more prevalent at the same time. Secured music can be downloaded from the Internet without actually paying for it. Cheap workers can easily set computer software by reproducing the design following the original software. Even though most people know about piracy, many don’t fathom its impact.
Effects of piracy-
- Distribution Methods: pirated items are distributed in two ways. Firstly, consumers buy pirated items not knowing that they are pirated and secondly when they buy pirated items knowing they are pirated. When consumers buy the items unaware of the fact that they are pirated and afterward when they come to know about it, it leads to a reduction in consumers’ confidence in the company, it further may lead to a reduction in the distribution of items of that company.
- Revenue Diversion: Piracy transfers money from producers and distributors of items such as audio recordings to people indulged in piracy, making those companies who make an investment in production and supplying less profitable.
- Tax Revenues: tax revenue is not generated from pirated items except where pirated items are sold through retail means and taxed. For example, when music is downloaded with no tax charged on it when according to the tax laws it is supposed to, the money is lost there. Lost tax revenue leads to a fall in funds available to the government to spend on people.
- Impact on creativity: Piracy may lead to the migration of talented creators to foreign countries thus depriving the wealth of countries of original creativity. For example, unrestrained piracy in most African countries has led to migration of many artists to Europe, where with the help of the existing copyright system, their works are better remunerated. This affects the native business entities to a drastic extent.
- Impact on foreign relations and development: Piracy destroys the base of local cultural industries and has a disadvantageous impact on their relations with foreign partners. It weakens lawful businesses, which cannot compete with the low prices set by pirate businesses. Thus, piracy impairs economic development too.
- Impact on employment: Pirated goods lead to an adverse effect on production by the legitimate industry thus leading to the generation of fewer jobs.
- Impact on foreign investment: Investment is dependent on both an adequate copyright system and effective enforcement of those rights. If either these elements are missing, a country’s capability to attract investment accompanied by the supplementary benefits of increased employment opportunities, wealth creation as well as tax revenues will be lost.
Lessening the effects of piracy
It is thus very important in today’s world to find techniques that reduce the effect of piracy on both the individuals as well as business entities. Some of these ways are enlisted below-
- Creating a clear software policy statement for the company.
- Making the employees sign an anti-piracy statement.
- Involving regular software inventories.
- Knowing what the company’s software licenses allow.
- Educating the public about the influence of piracy on their lives.
- Businesses can apply methods to prevent software piracy like changing the distribution of software so that it becomes harder to download etc.