Four Stocks That Should Abolish Piracy Laws
These four corporations should take the laws on piracy and throw them into the meat grinder as soon as possible.
The reason? There are many. But in short, current piracy laws make it easier for content to be distributed illegally than through any of the legal channels. It's time for that to change.
Over the past few years, I've heard numerous figures regarding the piracy of Adobe (NASDAQ: ADBE) Photoshop. Some reports say that as many as 50% of Photoshop users are running an illegal copy. Other reports claim that number is as high as 80%.
Whatever the case, Adobe is inevitably losing money on its prized photo editing tool. If the company has any hope of recouping those lost earnings, then it should lobby congress to exterminate the current penalties and punishments for downloading illegal copies of software. According to the Business Software Alliance, "A company or an individual found using unlicensed software and violating copyright laws can pay damages of up to $150,000 for each software title copied." That is insane. With a penalty of that magnitude, it's no surprise that few individuals are prosecuted for using pirated software. Thus, Adobe should fight to replace this law with a much simpler penalty.
For every illegal copy of a particular piece of software that an individual obtains, the user (more accurately, the pirate) would be forced to pay a penalty of double the software's value to the IP's owner. This means that if Bob Stealer downloads an unsavory copy of Photoshop (which retails for $699), he would have to pay Adobe $1,398.
Some might think that this is still a rather harsh penalty, especially considering the number of poor college students who use pirated software. But that's precisely the point: to deter pirates while providing Adobe with some value when pirates are actually caught.
Sony and Microsoft
Electronic Arts (NASDAQ: EA) loves the idea of making consumers enter a single-use code to play its games online. This, in EA's mind, raises the value of its games and prevents the sale of used software, all the while making it harder for pirates to fully enjoy what they steal.
The truth is that EA's lovely online pass feature is nothing more than a nuisance. It hurts the rental experience and thus prevents consumers from taking EA's games for a thorough test drive. It also makes it impossible to fully share a game with a friend, which is something EA should not prevent.
Other companies have implemented similar features in their games. Then there are some that have attempted to force consumers to go online (or at the very least log-in) to play a game -- even while engaged in a single-player (read: offline) experience.
To circumvent the latter requirement, players are forced to become pirates. That is absurd.
In order to eliminate this nonsense, Sony (NYSE: SNE) and Microsoft (NASDAQ: MSFT) should team up and form an Anti-Piracy Law Alliance (or as I like to call it, the APLA) that seeks to abolish any law that could make it easier to pirate than it is to obtain video games legally. The APLA should also aim to implement laws that would prevent game companies (and anyone else in the entertainment industry) from implementing features that make piracy more appealing. In other words, it would then be illegal for companies like Ubisoft to force PC users to be online while playing a single-player game of Assassin's Creed.
Considering the way that most tech companies treat piracy, it is very unlikely that Sony or Microsoft would ever form an Anti-Piracy Law Alliance. But if they opened their eyes and took a good look at the situation, they'd realize that an alliance of that nature could be quite rewarding. If nothing else, it would foster the legal sale of games by making piracy less desirable -- a feat the existing anti-piracy methods have failed to accomplish.
Comcast and NBCUniversal
Under the current law, consumers can only legally stream or download copyrighted videos that are released by a studio -- any other acquisition is considered illegal. This means that when NBCUniversal decides to exclude a movie or TV show from its digital library, consumers are left in the dark.
Take Harry's Law, for example. This hit NBC drama used to be available to stream online. But due to "certain content rights situations" (as Hulu puts it), the series is no longer featured on Hulu.com, NBC.com, or any other legal streaming website. iTunes, Netflix (NASDAQ: NFLX) and Amazon Prime (NASDAQ: AMZN) have yet to acquire the series, and despite being in its second season, Harry's Law has yet to come to DVD. Re-runs of the show are rarely aired. Thus, if viewers miss an episode or simply wish to re-watch or purchase the show in some format, they're out of luck.
Since you cannot legally obtain the show, one might wonder why the laws on piracy prevent consumers from obtaining it by some other means. But they do, and that only hurts the show's future. Consumers won't start watching a series mid-season if they can't catch up. That's why shows that are digitally distributed tend to do better than those that are not.
Thus, Comcast (NASDAQ: CMCSA), which now owns NBCUniversal, should push for the laws on piracy to change. If a show is not available to buy or stream in some legal form, consumers should absolutely be able to obtain a digital copy somewhere else. I'm not saying they should do that now -- I'm saying the laws should adjust for that option.
Why would Comcast, which has become a content provider, ever support that law? Because it helps the company's long-term interests. Comcast is not making any money by sitting on digital episodes of Harry's Law. In fact, I'm willing to bet that Comcast would love to sell us a Harry's Law DVD right now, and post the whole series on iTunes. But it can't.
If, however, the day came when the law allowed us to obtain a digital copy of the show by any means if it was not legally available to buy, then I guarantee you that every person and every company involved in Harry's Law would sign off on digital distribution. They'd stop bickering over who gets each piece of the pie and just get it out there to ensure that they profited from the show's distribution -- and to ensure that the law could punish those who weren't willing to pay for it.
In that scenario, everybody wins. Except the pirates, of course. As of this writing, however, nobody wins; not NBCUniversal, not fans of Harry's Law, and certainly not the pirate who wanted to catch up on the Kathy Bates drama but was ultimately caught by police.
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