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Split of total estimated trade losses due to copyright piracy (Source: IIPA)

Per capita U.S. dollar loss due to copyright piracy (Source: DailyTech)

Estimated per capita loss against GDP (PPP) per capita (Source: DailyTech)
Canada is the world's largest piracy offender per capita

Last week, the International Intellectual Property Alliance (IIPA) submitted recommendations to the Bush administration in its “Special 301” review of copyright piracy and market access problems around the world. The IIPA report recommended that 16 countries be placed on a “Priority Watch List,” for piracy offenses. Canada, Mexico and Israel joined China and Russia as countries severely plagued by piracy.

“The annual Special 301 process continues to be the primary means for the U.S. copyright industries to advise U.S. government agencies about the principal impediments to adequate and effective protection in global markets,” noted Eric H. Smith of the IIPA. “Many of the key markets around the world that are infected with high levels of copyright piracy or deny effective market access to copyright industries.”

At first inspection of the figures released by the IIPA, the $2 billion estimated trade losses due to copyright piracy in China and Russia are more than double that of any other nation. Smith comments, “China and Russia are again this year the two countries that are of the greatest concern to the copyright industries, as they were in 2006. While there have been developments in both these key markets over the year, the bottom line is that piracy levels have not come down at all or only marginally, and some problems have grown worse.”

Upon further examination, however, we find that there is more to the Priority Watch List than just raw loss numbers. For example, China leads all nations in piracy with an estimated $2.2 billion lost due from piracy -- but China is also the world’s most populated nation. Could it be that China’s piracy problem is explained by its huge populace? After all, it would be easy to say that China is the world’s biggest consumer of rice because it has the most citizens. While China’s population has a strong role to play in the country’s rice consumption levels, it would be erroneous to attribute the statistic to just a single factor. There are usually several forces at play to explain statistics, as in the example presented with China and rice, culture can be one of them. One raw statistic alone, such as rice consumed or dollars lost, is meaningless without context.

Taking a deeper look into the IIPA’s figures to bring some weight and context behind its estimates show that the Priority Watch List numbers from the Special 301 report are imperfect. Aside the fact that dollar estimates are not an exact science, the IIPA’s lists do not include any figures for the motion picture industry’s losses, has incomplete data for entertainment software and books and features no data for the music industry in Canada. Out of the five categories of copyright piracy, the IIPA only has complete data for business software.

Plotted below is the IIPA’s estimated total business software trade losses due to copyright piracy during 2006 against population and gross domestic product (GDP) at purchasing power parity (PPP).


2006 Estimated Total Losses (U.S. dollars millions)*


Loss Per Capita (U.S. dollars)

GDP (PPP) Per Capita (U.S dollars)***




































Costa Rica










Saudi Arabia















Dominican Republic




















*International Intellectual Property Alliance
**Latest data available on Wikipedia and CIA Factbook
*** International Monetary Fund, World Economic Outlook Database, September 2006

The table is sorted according to dollars lost per capita, and it’s immediately apparent as to why the IIPA is so critical of Canada. Not only does Canada have the greatest loss per capita at $16.78, but its citizens also have the greatest purchasing power. While the IIPA may be concerned about its loss per capita from Canada, the report the coalition filed expressed frustration with Canadian legislation. The IIPA says that pirates have taken advantage of the gaps in Canadian law to become a “leading exporter” of camcorder bootleg movies and modchips for video game consoles.

On the other hand, China, the world leader in dollars lost from piracy, only manages $1.68 lost per person. Of course, incidents of piracy are likely to be spread very unevenly in a nation with huge disparity between urban and rural areas. The IIPA also points to China as a large exporter of pirated goods to Eastern and Western Europe.

The IIPA has spelled out exactly what it believes China must do, including taking deterrent “criminal” actions against pirates instead of fines, which the coalition believes are meaningless. “So far, it is clear that the Chinese government has not devoted sufficient resources to combat rapidly advancing Internet piracy and needs to further clarify underlying legal rules and enforcement procedures, as well as to expand the opportunity for U.S. copyright based industries to offer legitimate materials to the Chinese public,” the IIPA wrote to the Bush administration.

Russia, the other leader in piracy, stays near the top of the list with $14.80 lost. The U.S. government announced in November 2006 a joint program with Russia to fight piracy. The IIPA acknowledges the development, but continues its disparaging tone, saying, “Despite the repeated efforts of industry and the U.S. government to convince the Russian government to provide meaningful and deterrent enforcement of its copyright and other laws against optical disc factories and all types of piracy -- including some of the most open and notorious websites selling unauthorized materials in the world, such as -- little progress has been made over the years in convincing Russia to take the  enforcement actions that could reduce these high piracy levels.”

Despite Israel’s relatively low $98.4 million loss, its smaller population results in a per capita loss of $13.86. The IIPA’s main concern, however, appears to be the Israeli government’s inaction and indifference to U.S. copyright laws. Specifically, the IIPA is dissatisfied with a bill that “would discriminate against foreign producers of sound recordings specifically, and potentially violate Israel’s bilateral obligations to the United States.”

Mexico places fourth on the list of loss per capita at $9.25 and an overall third in terms of overall losses at over $1 billion, but even then, the country’s ranking may be under rated. Going back to the IIPA’s 2005 report, Mexico posted the highest numbers for movie piracy at $483 million—nearly double that of China. The 2006 IIPA report does not include any information about motion pictures, underscoring the potentially incomplete nature of the coalition’s statistics.

Nevertheless, the IIPA has gathered its stats and focused its attentions on the black markets and reigning governments of Argentina, Canada, Chile, China, Costa Rica, the Dominican Republic, Egypt, India, Israel, Mexico, Russia, Saudi Arabia, Thailand, Turkey, Ukraine and Venezuela.

“The unwillingness of the countries identified in our submission to curb high rates of piracy – in most countries, through more effective and deterrent enforcement – saps the U.S. economy of the high-paying jobs and strong growth rates that make this sector critical to the health of the U.S. economy,” said Smith.

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RE: yawn
By Xenoid on 2/20/2007 12:08:56 PM , Rating: 1
If they think I can afford $80 dollars per game or $15 dollars or whatever for a CD they are gravely mistaken. Hell I pirate some stuff because we don't get it in North America (WRC, Top Gear).

RE: yawn
By isaacmacdonald on 2/20/2007 4:02:50 PM , Rating: 5
How much you're willing to pay is unimportant in terms of piracy. If IP theft is prevalent and largely unpunished, you have little incentive to spend any amount of money to purchase a product that is available for free. The only factor that comes into play, in that case, is whether the inconvenience of piracy is preferred to the purchase price of the product.

Now, if they manage to get a handle on piracy (ie: make it exceedingly inconvenient or more dangerous), what you're willing to pay should dictate the prices of goods (something which should be to your benefit, provided you're in the targeted demographic).

You do have a good point about international stuff. There are lots of international movies and TV-shows that aren't marketed to US consumers. Just the other day I tried to track down David Attenborough's "Life on Earth" on dvd. The only place its sold is in the UK--whereas the torrents for it are widespread. Circumstances like these demonstrate the weakness of mass-distribution, and the relative strength of methods used for piracy.

RE: yawn
By fic2 on 2/20/2007 9:06:45 PM , Rating: 3
inconvenience of piracy

Thanks for that laugh. How about the inconvience of purchasing a legit copy? Rootkits, DRM, etc to try to prevent you from actually using the product you purchased.

RE: yawn
By Crank the Planet on 2/21/2007 4:27:14 PM , Rating: 2
I don't see where the U.S. is in comparison to these other countries. I wonder why that is? -lol It's like Bruce Schneier said, if you're going to use low grade encryption and poor implementation for your protection scheme, you'll get what's coming to you. THE REAL PICTURE IS THIS PEOPLE: The vast majority of these movies profit in the millions when they are released in theaters. Then they are released on DVD and profit even more. If these money grubbing industries want to essentially nullify piracy then they will have to have a Wal-Mart special- 2 for $10! Seriously they will need to cut the price of a movie to $5-7. They will see piracy cut to almost nothing and the sale of DVD's octuple! It's just common sense. Nobody want's to pay $15-25 per movie. They only do it because they have to. Same thing with piracy.

RE: yawn
By Chadder007 on 2/21/2007 6:23:12 PM , Rating: 2
Agreed.....If they were that cheap, then why the heck even rent them. You could purchase a DVD for as much as you can even rent the movie in places.

RE: yawn
By Miggle on 2/22/2007 3:20:39 AM , Rating: 2
I totally agree too. They also have to consider that maybe they're paying actors way too much. Make that $8 per movie, $4 per Audio CD, no DRM. They'd probably earn just as much, but wouldn't have to pay for copy protection.

RE: yawn
By darkpaw on 2/23/2007 10:51:28 AM , Rating: 2
Yah they are definately charging too much. I don't get why anyone would pay $15 for a movie when you could get 10 or more from Netflix or other services for the same price (and thats taking a while to watch and return).

I know a lot of people do, but if they cut the retail costs in half or less, they'd definately sell more of them.

I don't pirate, but I also refuse to pay full retail for any movie or cd. If I don't find it deeply discounted or used, I don't buy it. Used movies/cd's make no additional money for the sellers, but if new ones were reasonably priced they would get the money for them.

RE: yawn
By Captain Orgazmo on 2/20/2007 5:20:52 PM , Rating: 2
Top Gear, hell yes. Many good shows are not available here in the GWN, or if they are and you want them, you end up with a $100 per month Shaw/Rogers bill. This estimation of money lost because of piracy is ludicrous. How can these fools know what I would buy or not buy if piracy didn't exist? Before the internet (as we know it now) existed I still never bought movies or CDs. With internet piracy around I have many more games than I used to, but I still buy about 2 per year, same as before internet piracy. These fools think that if something becomes free no longer, that people will just say "Oh, well" and shell out the dough. Maybe it would be more like "Oh, well. I guess I can do without". Except in the good ole consumerism capital of the world: the US of A. They aren't even on the piracy lists. Maybe that's why they have the highest per capita personal debt in the world. Not that I have a problem with that; America's consumerism gives all of us Canadians jobs.

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