p2pnet - rss feed: Rubles, dollars and sense
p2p news / p2pnet: p2pnet’s story on the MPAA’s move into Russia struck a chord.
Have MPAA (Motion Picture Association of America) boss Dan Glickman and his merry band perhaps overlooked the economics of things in Russia? - _-Jile-_ wonders.
Rubles and dollars – and sense
By _-Jile-_
Look, the reasons that drives file sharing (I only consider piracy the buying/selling of IP works - not the fair use of sharing it) in the USA and Canada is a lot different than what drives the piracy problem in Russia.
What’s the average wage of a family in Russia? I’ll tell you, the average household income in 1998 was 6,395,000 rubles ($1176 USD) according to CNN.
Oh, I’m sure it’s gone up a little. Lets just ‘assume’ everyone got a 5% a year raise (which I’m sure didn’t happen, but for my point we’ll assume it). That means the average income is now 9,448,328 rubles or $1,737.48/yr which comes out to $144.79/mo or $33.41/wk…
Ok, now let’s look at America. I’m going to say the ‘average’ income here is about $24,000/yr, so ignoring tax, which would mean $2000/mo or $461.54/wk, that $20 CD/movie here is about 0.083% of the income.
However, in Russia, that same $20 is 1.151% of the annual income.
To make it a little clearer, that’s 1,381.31% higher price to the average Russian than the average American. In other words, it would be like our CDs/movies costing $276.26 each!
Now, all that said, WHO would pay $276.26 a movie or CD??
NOBODY!
When the prices are equal, I bet Russians would buy more. So to pass along the same price ratio, that’d mean prices in Russia would need to drop to $1.48 just to match the price to income ratio.
And keep in mind, boys and girls, Americans think the $20 is too much. In fact, most of us on polls I’ve read want the prices down around or below $10. So let’s put all the cards in here and say if the MPAA/RIAA dropped all prices to $10 in America and $0.73 in Russia, they’ll start making sales….
Yep, I know. Not going to happen.. And neither will forcing Russians to buy the RIAA/MPAA product!
I read a while back a comment from a Russian girl. When presented with, Does the average person buy pirated or new-movies/music typically, her answer was basically that the only time anyone buys a new CD/movie is for a special gift. The rest of the time they buy from street vendors and ppl who buy the high-priced ones were seen as wasting their money and preppy, stuck up types.
The average person only buys off the street.
All this said, I support p2p, I’ve never supported piracy and I never will, but the fundamental problem in Russia is income.
Unless they reinvent the wheel and find a way to multiply the average wage, there won’t be a change that’s enforceable. And even if they did stop piracy, they’d only be stopping the music from being shared because there’d be VERY minimal purchase changes given their income limitations.
Just my 10 cents.
Also See:
move into Russia - MPAA turns attention to Russia, March 30, 2006
March 31st, 2006 at 5:44 pm
Things may have changed since I left Russia, but as I remember, there was an incredibly lopsided distribution of wealth (even worse than in America). Given that, it means that the income of the average Russian family is actually a lot lower once you don’t count the extremely rich few individuals. So, it seems like Russians have even less money to burn on legit entertainment.