The Only Game in Town: A Bank-breaking Tale of 'Staggering' Piracy

Jumping on the bandwagon of industries claiming to be totally screwed by China's 90% piracy rate, American publishers told Congress last week that the conservative estimate for their losses due to intellectual property (IP) theft in China last year amounted to a "staggering" $52 million. According to the Association of American Publishers (AAP) President and CEO Pat Schroeder, that number does not include piracy conducted over the internet, which, if considered, would presumably add much greater weight to the figure. Schroeder told the House Ways and Means Committee on February 15 that the U.S. needed to step up and bring about a "meaningful change in the Chinese market place."

The announcement comes on the heels of a special report released the week prior by AAP and six other copyright-related trade groups, who together jotted down the names of 61 countries that weren’t playing by America’s copyright rules. The septet, who formed under the banner of the International Intellectual Property Alliance (IIPA), requested that 47 of these countries be put on a government "watch list" – something akin to being put on double-secret probation – with China the very top.

Though piracy rates in some other countries are comparable to those in China (like Russia’s unhealthy 79%), and in spite of the fact that China only accounts for 10% of the total $582 million the book industry lost around the world in 2006, the Red Giant has nevertheless been at the epicenter of these heated conversations. One major reason, aside from its significant contributions to piracy, is that the nation has made no visible effort to combat piracy before the Beijing Summer Games in 2008. Many industry spokespersons and government officials are using the Games to guilt-trip global decision makers into taking action against China. Says MPAA chief Dan Glickman, China now has “an opportunity to show the world they're going to play by the rules or they have an opportunity to show the world that they're going to be an outlaw.” In response to Big Red’s reluctance to motivate, the U.S. recently made some more idle threats, hinting yet again at possible legal action at the World Trade Organization if China didn’t shape up its efforts to thwart counterfeiters.

As one of the "core" copyright industries whose primary source of revenue relies on IP protection, publishing is right to join the global blame game. American book sales in 2006 totaled approximately $10 billion last year, and amount lost due to worldwide piracy of books came to about 5% of that. However, the numbers are still quite small when compared other IP-dependent industries, particularly film. The Motion Picture Association of America has estimated that piracy creates a nearly $18 billion loss for the entire film industry, with $6 billion of that affecting the movie studios directly. In 2006, total box office receipts totaled a mere $9 billion. 

The publishing industry should, first of all, count their lucky stars that they deal in paper (it’s harder to photocopy, translate, and distribute The DaVinci Code in hardcover than it is to illegally burn and ship the film version on DVD), and, secondly, they must use this time to build a reasonable digital rights management (DRM) system. If the industry plans to move forward at all with digital content online – whether audio, video, or text – it is imperative that they start protecting that product before counterfeiters find an even more effective way to profit from stealing it.

Chris Steib is the editor in chief of VoidMagazine.com.

When the famous gambler Canada Bill visited Baton Rouge in the late 1880s, he searched all over town for action until eventually coming across a Faro game in the back of a barber shop. When his friend George Devol found him there some time later, Bill was up to his neck in losses. Devol pulled him aside and said, “Bill can’t you see that this game is crooked?" Canada Bill responded, "Sure I know it, but it's the only game in town."