Who will benefit from the enforcement?
Online piracy has significantly reduced the profitability of film and TV series production. The culture industry will become more profitable when the product owners receive compensation and piracy is reduced. This will allow for expanding production and hiring additional employees. This way, the entire production chain will benefit from the enforcement.
Consumers will benefit from a broader scope of cultural offerings. Expanded production will result in more films and series to choose from. As legal distribution services are adopted by a larger number of users, more service providers will enter the market. Competition encourages them to expand their selection and lower their prices. Service prices may also go down because service users do not need to cover the costs of piracy.
The enforcement has been called a “letters business” run by law agencies. It is true that attorneys are being paid to monitor piracy and send enforcement letters to users who are illegally sharing works. However, this does not mean that they are not trying to eliminate piracy. Hedman Partners is not maintaining piracy; the agency’s attorneys have been assigned to reduce it.
Furthermore, the government benefits from reduced piracy. Piracy does not generate tax income for the government as legal product distribution does. Foreign film distributors such as Scanbox are also paying taxes in Finland.
It is in everyone’s best interest that piracy is eliminated and legal products are consumed. The benefits are felt by media companies, people in the media industry and individual people alike.
The price of piracy cannot be zero
Online piracy, that is, the unauthorised distribution and downloading of copyright-protected material, is illegal. Section 57 of the Copyright Act states that unauthorised distribution of files must always be compensated for. The purpose of the compensation is to place the owner of the distribution rights in a position where they would have been without the copyright infringement.
In other words, the compensation does not relate to the person downloading the film for their own use; it relates to them making the product available to the public. This will result in substantial losses to the film-makers.
The price of piracy cannot be zero. The legal distribution channel cannot compete with piracy on price. Legal operators have a lot of costs that the pirate channel does not have. These include, for example, the film’s creation or acquisition costs, employee salaries, distribution and marketing costs and taxes. Since the product owners cannot lower their own price to zero, the price level of the illegal competitor must be raised higher. Piracy distorts competition. In addition to the compensation, enforcement aims at a healthy market situation.