Perhaps this is a meant to be a secret ... but as someone who works for a major Hollywood studio, let me tell you, the studios know this already and while on the one hand they are trying to put the pirates out of business, on the other hand the more pragmatic managers do acknowledge the fact that the pirates, free of quotas and censorship, have done an amazing job of building interest and educating the public to our stuff.

I had not thought of the positive effects of piracy for artist creativity before. Thanks for bringing this to my attention! I think we need a new copyright regime in the United States which favors sharing and remixing more than our current one, that was shaped by old media forces. It would be good if a more progressive copyright policy could be adopted in China-- I don't know that such an outcome is realistic given the governmental realities there, but it would be a good to have alternative IP regimes to that currently supported by the U.S.

I wonder if there is are will be a similar backlash to the cultural influence of Western entertainment in China, similar to what we've seen in some parts of the Middle East? I have often thought it would be nice if we could export ideals of self-determination and human rights without also sharing Madonna and an ever-more-permissive pop culture.

Black markets are always a major feature of overly rigid market regulations, the harder the governments try to regulate and/or control a products production or price the more the underground demand for cheaper and better products becomes.

This is always a feature during a war or during the reconstruction phase after a war. Economic wars have the same effect on markets as do shooting wars, there gets to be scarcity and where there is scarcity demand occurs..

The heros who provide low cost beneficial goods and services in spite of government intrusion into the marketplace help expand and preserve freedom and it's accompanying goods and services.

Great article. Kaiser's comments are insightful, and he of all people knows about this topic. I feel my observations just confirm and expand on his.

I'd like to add something I didn't include in my own article. Recently I met a high school girl who had just won a nationwide English contest. Her English was astonishingly fluent and idiomatic. I felt I was conversing with a girl who had already spent several years in the U.S. She had only been studying English for four years. I asked her how she had gained such superb fluency in such a short time, and she said "I spend my free time watching English DVDs." This girl is certainly not alone in acquiring a vast amount of English through foreign movies and pop songs. Perhaps the Chinese government, with its pre-2008 promotion of English, should give at least a nodding thanks to the bootleg industry for helping China in its attempt to raise the English level of its citizens.

...Hollywood are PISSED and can do nothing about it. They really don't need this to "create" a market - its actually destroys one. They have the best, most exciting product in the world (look at the figures) and they want to earn a dollar from it. They don't need or want the free publicity of piracy.

Maybe Volkswagen should give away some free cars to let people experience the love of driving for a couple of decades before they start charging...Or McDs could....no...

[COMMENT EDITED FOR RELEVANCE - JG]

Yes, Hollywood are PISSED and can do nothing about it.

Bwa ha ha ha ha ha ha!

Welcome to the revenge of the Third World.

Two widespread lies about piracy:

1. A pirated disk equals a lost sale.

This is patently, obviously untrue, and yet the "figures" the software/entertainment industries come up with inevitably make this claim.

2. Piracy "destroys" potential markets.

Every single bit of research on this says the opposite. To give just one example: widespread piracy of desktop publishing software in the early 90's jumpstarted that industry and lead to massive profits all round, including the software makers.

It's the same here. DVD piracy just whets the market appetite for electronic goods, higher quality TV, and, eventually, a real movie "experience" at a reasonable price like you get anywhere else in the world.

While I know Kaiser is an artist who may have lost money because of piracy, but what about all the other artists that think they should profit from their efforts? You are suggesting they suck it up for the good of the country, America or the West? Kaiser is free to give away what he wants to; I admire him for that. But no one is free to give someone elses property away.

I do appreciate the sugggested benefits of piracy in China, but is that really the way to educate the Chinese people? You might be introducing them to a limited part of Western culture, but you are also teaching the Chinese to steal is okay or at least life is a lot cheaper to live if you ignore the rules.

Some years ago I was teaching in a law school in Beijing and one of my students who got many of her ideas from her father who was in the military, questioned me about Chinese use of patents without paying to use them. She (with her father's obvious input) said it was only fair, why should the patent owner be able to stop China's use of the patents without paying. I explained that to protect patent rights is to protect and encourage people to invent and innovate.

A conundrum for some. Won't the "educational" benefits from this piracy come to an end when the Chinese people get their fill of Western culture and all that is left is entertainment and a piracy industry that is more entrenched?

If the film and music industry really wants to cut down on piracy, they should cut the costs of their product--who's going to pay US$30 for a DVD in China? Who could afford that except the wealthy? And it's not an unreasonable thing to do--for mainstream films they hardly need to market them at all here, and typical DVD packaging in China is much simpler and less wasteful than ours tend to be.

Also, I think the market here cares less about special features, so there's no need to include those--strip it down to the movie itself, wrap it in a piece of paper with proper English (and Chinese of course) and voila--you've figured out how to compete in the Chinese film and music market.

Don't believe me? Warner Bros. is already trying it: http://www.realtechnews.com/posts/2971.

I think it'll work.

hey, We are students from Japan. We read your article and were interested, We thought it was very well written. Also, we are doing a debate about piracy in China and we hope that you could help us a bit. Will you please tell us about the negative aspects of piracy. Also, is it possible to send us some evidence or more articles that piracy is still active in China.
Thank you for all your help,
Maddy and Rhea

Talking about how movie companies should lower their prices for companies in China to reduce the rates of piracy, companies will not do this, because it would be an unfair to those in the developed world, which would be the majority of their clients. An example would be how Microsoft does not reduce their prices for Windows in developing countries. Why? more than 90 percent of Windows is pirated in China. But Microsoft cannot just reduce the prices in China, and leave the majority of their clients in other places of the world to have to pay more.

While we're at it, America should also abolish the global income tax policy. What better way to spread American idealogy than to encourage Americans to live overseas. Each one of them would serve as a missionary of democracy.