July 22, 2005

Bush on Piracy

Interesting -- President Bush just named Chris Israel to be the US's first Piracy Czar. Ars Technica has the story:
Bush announces new Piracy Czar
President Bush has created a senior-level position in his administration for the purposes of battling piracy and counterfeiting. The position was given the go-ahead late last fall by Congress, and its primary aim is to thwart global piracy, which purportedly costs American businesses US$250 billion a year.

The first Piracy Czar will be Chris Israel, who was previously deputy chief of staff for Commerce Secretary Carlos Gutierrez. At the top of the agenda for now is China, which recently made pledges that it would crack down on rampant piracy in that country. Why piracy and why now?

The skyrocketing U.S. trade deficit -- which reached a record $618 billion last year -- has compounded U.S. concerns about piracy and counterfeiting. Companies that produce movies, music and software and other intellectual property account for a growing share of what the United States has to sell to the rest of the world.

Knocking $250 billion off that would be great, but economic realities won't allow for that to happen overnight. The massive black market in China is spurred in part by monopoly pricing—namely, prices are too high, and the only competition to bring them down is illegal competition. While pirated copies of Star Wars might sell for $1 on the street, 20,000 sales of that pirated DVD do not translate to 20,000 sales of $15 legit DVDs in the absence of piracy. It's going to take a long time to get an established and legitimate market for American entertainment exports setup in China, and its going to need businesses to realize that the key to success in the market is pricing, not enforcement. (And then, maybe they'll realize that for other markets, too.)
Interesting -- Carlos Gutierrez is no idiot so someone who was his deputy chief of staff is probably pretty effective at this sort of stuff. It will be interesting to see any reaction from nations (China) that will be impacted by this enforcement... Posted by DaveH at July 22, 2005 5:15 PM
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