Consumer

behaviour towards
piracy
This dissertation is submitted in fulfilment of
the requirements for the degree of Bachelor
of Arts in the subject Business Management
at the University of Wales Lampeter

By
Roberto Ramos Moreira Pires Carvalho

September 2009

This paper intent to show that the human behaviour towards piracy
suffers influences from many aspects, and tries to clarify those aspects
purpose and analyze models. It can be used by organizations to find
information of the consumer behaviour towards piracy helping to develop
a better approach anti-piracy.
 © COPYRIGHT BY

Roberto Ramos Moreira Pires Carvalho

2009

Some Rights Reserved

This work is licensed under a Creative Commons Attribution-Share

Alike 2.0 England & Wales Licence

http://creativecommons.org/licenses/by-sa/2.0/uk/
Declaration
This dissertation is submitted in part fulfilment of the Bachelor of
Arts Business Management at College of Technology London

I declare that this dissertation is the result of my own work. All

sources are duly acknowledged.

Signature and date

Abstract
Propose - This paper intent to show that the human behaviour
towards piracy suffers influences from many aspects, and tries to
clarify those aspects purpose and analyse models. It can be used
by organizations to find information of the consumer behaviour
towards piracy helping to develop a better approach anti-piracy.

Methodology - A model is proposed based in the studies of Matos et

al., Ang et al., Huang et al., and Martin Fishbein & Icek Aljzen. The
research used two methods, focus group and survey. Survey was
conducted online while the focus group used local volunteers.

Findings - Questionable and shallow research that the media

release often point the price as the key factor that drives people for
the counterfeit products however, that not true. Many factors like
the social need that every human has influence in a positive way
our behaviour towards piracy.
Acknowledgement
I would like to thank my family that supported my decision of
studying abroad, my friends that helped to pass through hard times
and all those that helped me directly or indirectly. I also want to
thanks Felippe Correia for being a friend in good and bad moments.
Also I want to thank all teachers and lectures, in special Dr Ernando
Melo and Lipi Begum. And finally I want to thank the private
community that trusted on me with closed information and good
discussions that made this paper a pleasure to do.
Contents
Declaration.......................................................................................3

Abstract............................................................................................4

Acknowledgement............................................................................5

Contents...........................................................................................5

Image and Table index.....................................................................8

Introduction....................................................................................10

Rationale for the research...........................................................15

Aims and Objectives.......................................................................16

Literature review............................................................................16

Enlightenment Revolution ..........................................................16

Ideas into tangible property........................................................18

Patent law................................................................................19

Trademark law.........................................................................19

Statue of Anne (Copyright Act 1709).......................................19

Culture, Society...........................................................................20

Consumer’s behaviour models....................................................21

Behavioural Model - I................................................................22

Behavioural Model - II...............................................................23

Behavioural Model – III.............................................................27

Previous Experience.................................................................28

Theory of Reasoned Action......................................................28

Theory of Planed Behaviour.....................................................28

Technology...............................................................................30

Internet urge for socialization..................................................31

New project development........................................................33

5
 SWOT.......................................................................................35

Literature conclusion................................................................36

Methodology...................................................................................36

Positivism and Interpretivism......................................................36

Quantitative and Qualitative.......................................................38

Research design..........................................................................39

Focus Group.............................................................................39

Questionnaires.........................................................................39

Validity and Reliability.................................................................40

Sampling.....................................................................................41

Ethical and Considerations.............................................................42

Findings..........................................................................................42

Online Survey..............................................................................42

Presentation of raw data..........................................................45

Focus Group................................................................................52

Critical discussions of findings........................................................54

Conclusion......................................................................................56

Summary of findings.......................................................................58

Recommendation...........................................................................59

Limitation of research.....................................................................60

Areas of further research................................................................60

Bibliography....................................................................................61

Appendix A.....................................................................................67

AXXO means quality case study..................................................67

Appendix B.....................................................................................68

Radiohead case study.................................................................68

Appendix C.....................................................................................71

6
 Netflix and partnership with Xbox 360........................................71

Appendix D.....................................................................................72

Hulu growing market...................................................................72

Appendix E.....................................................................................73

BBC iPlayer in UK.........................................................................73

Appendix F......................................................................................74

DRM – Music and Games.............................................................74

Appendix G.....................................................................................75

Ethics Considerations form..........................................................75

Appendix H.....................................................................................79

Two sample t-Test – Two groups related regards piracy supplier

and usage frequency...................................................................79

Appendix I.......................................................................................80

Two sample t-Test.......................................................................80

Appendix J.......................................................................................81

Survey questionnaire design.......................................................81

Appendix K.....................................................................................88

Small sample took from the online survey..................................88

7
Image and Table index
Table 1 - SWOT analyses of the Piracy and the Content Owners....35

Table 2 - Characteristics Positivism and Interpretivism (Sandberg,

2004, in Skoldberg & Alvesson, 2004)............................................37

Table 3 – Two Sample F-Test for Variances – Suppliers believe

versus usage frequency.................................................................79

Table 4 – t-Tent: Two Sample Assuming Equal Variances –Suppliers

believe versus usage frequency.....................................................79

Table 5 – F-test Two Sample for Variances – Internet for social use
related with behaviour towards piracy...........................................80

Table 6 – t-Test Two Sample Assuming Equal Variances – Internet

for social use related with behaviour towards piracy.....................80

Figure 1 - Model III - (Matos et al., 2007)........................................27

Figure 2 - Gender............................................................................45

Figure 3 - Age.................................................................................45

Figure 4 - Online shoppers..............................................................45

Figure 5 - Digital shoppers..............................................................46

Figure 6 - Online store....................................................................46

Figure 7 – Hours spent on internet weekly.....................................46

Figure 8 - Internet usage................................................................47

Figure 9 - Internet usage second choice.........................................47

Figure 10 – Download of content....................................................47

Figure 11 - Frequency illegally file are downloaded.......................47

Figure 12 - Rate trust on pirate source...........................................48

Figure 13 - Protocol used to download illegal content....................48

Figure 14 - Reasons that led to piracy............................................49

Figure 15 - Personal feeling after downloading illegally content....49

8
Figure 16 - Feeling of knowing someone else is download illegally
content...........................................................................................50

Figure 17 - Evaluate your computer skills......................................50

Figure 18 - Stream..........................................................................51

Figure 19 - Paid stream media........................................................51

Figure 20 - Rate your behaviour towards piracy.............................51

Figure 21 - Self rate as a pirate......................................................52

Figure 22 - AXXO, FXM, FXG, KLAXXON .........................................68

9
Introduction
It is estimated that for the present year of 2009 more than £390
billion will be traded in counterfeit products. This sun represents
around 10% of the whole products that it is expected to be traded
this year [ameinfo.com, 2009]. Moreover the trend for this
percentage of counterfeit products sold for the following years are
rising, reaching new highs year after year. Today the piracy acts on
virtually all businesses, where the top ten most pirated goods are
the following, Brand name clothing, Electronics, Handbag and
luxury accessories, Medicine, CDs/ DVDs/ Videogames, Automotive
components, toys Cosmetics and Personal hygiene products,
Cigarettes and Food & Beverages [CBC, 2009]. Considering those
peculiar markets China and Hong Kong are broadly known and has
been identified as the centre for pirated audio, video and branded
consumer wear (A.J. Park & Son in (Prendergast et al., 2002), and
this highly production is reached through the cheap labour and as
Shenkar says the government has being supporting the counterfeit
production as never before in the human history. Pirates counts
with sophisticated and elaborated plans that helps the production
(Shenkar, 2003 in Wah-Leung & Prendergast, 2005). Another
argument that shows that China supports directly and indirectly the
piracy is with the growing digital data hosted on their territory
which are shared for the entire world through internet websites.
The group Vobile found that by 2007 to 2008 the number of related
videos hosted in Chinese web hosts that are somehow infringing
copyrights sky rocketed rising by 6 times from one to the next year
[Greenberg, 2009].

Some industries like the Hollywood studios (MPAA) claimed that in

2005 the loss in revenue was estimated in £3.3 billion and around
half of that is due the piracy through the internet [BBC News
Channel, 2006]. Another example is the Software industry that in

10
2006 has a loss estimated over £5.5 billion in the US alone, claim
IDC. If seeing the growing market of China those numbers are
scaring. In 2005 according to BSA and IDC’s research, China rose
39.8 percent of piracy estimated revenue from $3.9 billion dollars
to $5.4 billion dollars in 2006 alone. India another example had an
outstanding rise of 125.3% in the same period now representing
$1.3 billion dollars loss for the software industry (Yu, 2007). A
recent study carried out by the University of Hertfordshire asked a
big number of users to fill up the online survey, where they had
and successful return for 1,800 users aged between 14 and 24 in
the UK, regards their behaves and habits when consuming music.
This research brought some interesting data, like the shift of where
users usually consume their media, which is now voted by 68% as
being using mainly on their computers while just 15% still use CD
players daily. The average music collection is now over 8,000
tracks which roughly represent 17 days of music nonstop. As much
as 61% of the of theses consumers use P2P network or torrent
trackers while the majority with 83%, often uses the network
weekly or daily for downloading more music (Bahanovich & Collopy,
2009).

Companies which claim to lose gigantic amount of money are those

that more often behave with “bestiality” approach, like prosecuting
individuals that are in many cases unaware of committing a crime,
thus losing credibility, while other companies are changing their
business strategies. For instance, changing their price strategy is a
method that the companies radically drops prices on their product
and then are able to offer a legit product while still facing directly
counterfeit products with this new low price, this was an approach
carried out by Microsoft in China. This software giant sells the world
wide know Microsoft Office 2007 as low as $29 in China
[Businessweek, 2009] while the same product is sold in the US it by
$299.99 [Amazon.com, 2009]. This aggressive low price raised the
Software sales by 800% selling more than 80,000 copies of the

11
program claim Liu Tianxiang, vice president of Beijing Federal
Software (Chinese Software distributor). Also the company intends
to shift this successful trial low price as a permanent price strategy
against the piracy for the product Microsoft Office 2007 in China
(Burrows, 2009). Another group has yet a different approach which
is gathering the major brands from that specific business and join
associations where their main focus is to research ways to help that
industry in any area from international networking to piracy, for
example two associations called MPAA and RIA.

The chairman of the MPAA Dan Glickman states in the movie “Steal
This Film II” that “We recognize that we will never, never stop the
piracy. We just have to try to make as difficult and tedious as
possible. People needs to know that there are consequences if they
are caught” (Steal This Film II, 2007). MPAA (The Motion Picture
Association of America), which is an organization founded in 1922,
represents internationally the motion picture industry as the
theatrical and TV in and out of the US. Today this organization is
seeing as anti-piracy agency where their main concern is to look
after, obviously, related subjects with copyright material produced
by their associates. This agency clearly states that any internet
user that have ever downloaded any music or video are compared
with stealing someone else’s “shoes or stereo” and accused of
doing so cause more harm than stealing a simple shoes, those
users are simply “thieves”. That is the quote extracted directly
from their website “Movie pirates are thieves, plain and simple.
Piracy is the unauthorized taking, copying or use of copyrighted
materials without permission. It is no different from stealing
another person's shoes or stereo, except sometimes it can be a lot
more damaging” (Motion Picture Association of America, 2009).

RIAA is MPAA counterpart but looks after the music industry

(Recording Industry Association of America) which assumes the
same position. The organization in 2007 sued a single mother of
two rewarding in nearly £135,000. What they were trying with this

12
situation is like the old times when the chief of the village chop off
the head of the criminal and mount it in pikes as warning to
everybody else, or in other words they punish just fell individuals
(up to 20,000 in 2007) severe enough that they can (hope to)
intimidate larger group of users in stopping sharing pirated music.
The curious aspect is that since when the Association started to sue
individuals from 2003 to 2007 the number of users just jumped in
nearly two times from 3.8 million to 9 million (Kravets, 2007).

All this data gathered show that there is something wrong with the
media producers, or with the consumers that are not aligned. It is
fact the record industry and the motion picture industry spend a lot
of money producing high quality content but it is also known that
they are not selling many of their products due the piracy.
Therefore it is critical analyse the reasons that make people run
towards counterfeit goods, so organizations can see how it could
turn this loss into profit. Studying consumer behaviour models is
possible to understand this human behaviour toward piracy which
sometimes does not make much sense. Some users buy the goods
already knowing that it is not legit, while other would refuse to buy
it. This decision making processes of how consumers make such
decision has already generated many studies. Many factors have
been identified as reasons to alter the decision perspective like
situational factors (Ferrell and Gresham 1985, in Tan, 2002), moral
development (Kohlberg, 1984, in Tan, 2002), although among
those two, three more factors which initially looks to be more
important on this decision making process: perceived risk, moral
judgement and moral intensity (Tan, 2002).

The behaviour assumed by the consumer toward intellectual

property might be the traces of the general human behaviour. The
culture and the society share information, ideas, create and
shaping the nature is embedded in the human mind just. The pure
act of speak or listen are act of sharing attention, or thoughts. And
imply that in a free society where everyone has granted the right

13
to speak, have a copyright protection which turns the way to
express and idea into property is a contradictory concept. Some
time ago, in the lattes XVIII century, the French society changed.
Censorship was controlling the information and this was an
important fact that let the society to bring down the government.
This human behaviour towards piracy is the focus of this paper
however instead of looking it at a broadly idea of consumption of
brand clouting, fragrances, it will used the framework of the motion
pictures, software and music industry regards the online piracy.
Topics like, copyright infringements, the act of sharing, the
network, culture, and more, the history of our society which will be
covered in order to provide a better understanding background of
this broad topic.

The technology played an important role on this aspect of sharing

information. People all over the world use internet as a way to
communicate with each other and this numbers are growing
rapidly. Lately big companies has emerged just by serving as a hub
where people share all kind of information, from video, music,
ideas, images, to personal life, niche forums where much of this
content are user generated. These companies like YouTube,
FaceBook, Twitter, Last.fm, DigitalPoint, Digg, are some in between
many that worth millions of dollars, all they do is to offer in a
convenient, reliable way that we can socialize and share all kinds of
content. This technology makes possible to people access of
original content, where it shifts the distribution system completely,
where once before just news papers, magazine, high cost
broadcast equipment, but now Website can be done by anyone,
platforms like WordPress builds the all the site for you, with a
webcam anyone are able to record, their thoughts and distribute
online it is a with significant cost reduction. Now is also possible to
make an infinite number of copies at the same time of that file with
virtually cost free and consumers are infringing the law by using
those products without permission and even re distributing them.

14
This implies that users do not realize that just by copying a digital
file without permission what they are actually doing, is infringing
copyright protections. So studying aspects related with consumer
behaviour towards piracy, can help researchers and organizations
to find a better and more efficient method to combat it.

A curious case happened not long ago when the British rock band
Radiohead announced their new album “In Rainbows”. This album
is particularly interesting because the band decided to distribute
the album through their website, using the price strategy where
fans would pay literally any amount. This experience resulted in
some mixed points and some really interesting aspects can be
seeing that wasn’t expected coming from an album that was freely
distributed. The band was surprised that the average price paid for
those that have paid some something was $6. However if you sum
up all uses, the volunteered paid and those that did not pay, the
band received $2.62 per album. comScore’s marketing manager
Andrew Lipsman said that this experiment was a success even
though the price per album was sold below the market average.
The reasons for this is that Radiohead cut off the middleman, had
nearly no cost for distribution and the revenue per digital sold copy
is far greater than physical albums and it goes straight away to the
band rather than for the record labels, studios and so on. Also the
band enjoy other important and hard to measure benefits which
includes the possibility of increase of fans’ base since for then it is
a risk album to know a different band, therefore possible more
incoming generated from previous albums and concert tickets. For
further information about this interesting case please look at
appendix B.

Rationale for the research

Organizations all over the works need to understand their
customers and the reasons that make a counterfeit product be
more attractive than their original counterpart. A huge amount of
money is traded and year after year it increases. And

15
understanding what reasons make people prefer pirated goods will
help those create more efficient strategies anti-piracy.

Aims and Objectives

The target of this research is to discuss through the literature
review some consumer behavioural models that can be applied in
the framework of online counterfeit products, critically discussing
and clarifying the consumer behaviour towards piracy, among
other related topics which follow below:

• Critical analyse of the history of copy rights and the discuss

future trends

• Clarify reasons why users prefer piracy or legal options than

the other

• Show how different businesses are reacting regards the

heavy online piracy, whether adapting or fighting

• And a general view of how those businesses are affected

Literature review
The intention of the literature review is to bring critical views where
is possible to contrast theories, authors and bring relevant aspects
that would help to clarify the research and findings. Chris Hart says
that the literature review “is important because without it you will
not acquire an understanding of your topic, of what has already
been done on it, how it has been researched, and what the key
issues are” (Hart, 1998, p1).

Enlightenment Revolution
It is know that before the printing press that came up with the
Gutenberg in the XV century the dissemination of the information
was held by some intellectual where. At that time the pace the
information spreads was relatively easy to control, after all just

16
some scribers were allowed and had knowledge to reproduce
materials. However Gutenberg changed the way books were
reproduced using mechanic typos where the process is now far
faster and easier. This shifts from hand writing to printing changed
completely the learning system in Europe. With this new method of
reproducing books, the information was more spread between the
public and the censorship came along to control that.

One famous problem was when Gutenberg’s partner Johann Fust

(or also misspelled known by Faust), were jailed in France where he
tried to sell bibles. This happened because all bibles were
examined by doctors from Sorbonne concluded that they were
identical and just by conjuring them using black magic would be
possible (Mark & Eisenstein, 2001). The use of censorship in XVIII
century in France was centralized and controlled by the royalty
which had the monopoly of the book trading system. The Office of
the Book Trade and Paris Book Guild were two entities that had the
monopoly regards giving and taking privileges of which printing
shop could reproduce and distribute material through Paris.
Outside Paris all provinces had their own entity that was supporting
the government and would “inspect book cargoes and bookshop
and seizing printed material that royal censor deemed to be
harmful to the crown, the church, or public morals” (Melton, 2001).
This Bureau has police powers and in 1757 was decreed that
anyone that write, publish or distribute material that tends to
“attack religion, injure royal authority, and trouble the order and
tranquillity of the state” could face death (Birn, 1990, in Melton,
2001). While in reality between the 1659 and 1789 just 941 (7 per
year) people suffered jail or were burned in public.

These people that were book trader and book printers many times
were men enlightened “under whose tacit protection the
Encylopédie was allowed to circulate and who eased restriction on
the importation of foreign newspapers and journals, was specially
known for its liberality” (Melton, 2001). This means that they had

17
the privilege to send and request new material everywhere. And
what they did was to send materials that they believed would sell
well to be reproduced abroad so these clandestine publishers,
smuggler in and out France though very efficient at evading
systems. They could do that thought secret system for publication
and distribution inside the kingdom where the royal agents could
never close. The centre publishers (in Paris), reacted in a really
hostile way, cursing and flaming those “out border’s” publishers.
Although this reaction did not stop them after all without an
international copyright regulation, they believed that was just
doing business. Bob Darnton an expert in eighteenth-century said
that there were basically two systems of production in France,
where the first was the “system of production outside of France
that is crucial for the Enlightenment. Not only this new media
system spread the Enlightenment, but this public power became
crucial in the collapse of the government in 1787-1788. And the
seconds was that one controlled by the censorship (Steal This Film
II, 2007).

Ideas into tangible property

It is impossible to talk about sharing ideas, information, and not
talk about the intellectual property. This changed the world in such
a way that it implies rights in almost every aspect of the industry.
Nowadays people cannot just copy a book and re-sell it, or copying
a software without permission, or even re producing an invention
and selling it, and that just possible because those ideas, books,
inventions, software, hardware, and more can be registered and
protected by patents, copyrights and trademarks. What they
actually do is protect those designs, way ideas are expressed, and
give the rights during a certain period of time, to the writers,
artists, etc, in order that they can prevent reproduction and usage
without permission, buy in many cases it can me monetized (Stim,
2009).

18
Patent law
It is subdivided into three more categories, utility, design and plant.

Utility – This category, granted the inventor of the new invention as

the owner with exclusive right to sell, make and use during 17 to
18 years

Design – Granted exclusive rights for the non functional new design
during 14 years

Plant – Also give exclusive right but during 20 years

Trademark law
It is the rights to businesses to protect characteristics names,
logos, designs, slogans or any way to identify the services and
products. It can last as long the organization exists.

Statue of Anne (Copyright Act 1709)

The idea of copyright in the XVI century is a “device for maintaining
order among members of book trade’s organized” (Patterson,
1968). The copyright is at this time, supported by law, and the
censorship creates a monopoly in the book trade for 150 years.
After this period of 150 years the censorship vanished and the
private copyrights holders stopped supporting the government, so
the copyright holders had no power to protect their already
published work. Following the Stationer’s Company, who would
hold the copyrights, would be the person that buys the sheet not
the author that means that book traders were comfortable with this
situation of having the rights over the material. Now there were
two problems, the first was to establish the order in the book trade
which the printing shops had the monopoly of the trade, the second
was to “developed by a small group of men controlling copyrights”.
The Parliament prevailed with their new copyrights model, which
was based in the previous one however with two differences, they
gave the rights to the authors instead for the print shops, and limit

19
it into a two terms of 40 years, now called Statute of Anne
(Patterson, 1968).

Today the copyrights rather than used to control and suppressing

ideas, or used to control the book trade, it is used to “protect the
expression of ideas for profits” (Patterson, 1968). Lyman R.
Patterson points out an interesting contradiction within the
copyright protections. Today we believe and base our society in
freedom of expression but the irony is that copyright protects the
expression of ideas and turns them in proprieties. Although it is
partially justified by the same author which claim that this exists
because it enable authors to be rewarded by their work, and
increasing the learning (Patterson, 1968).

Culture, Society
Culture is a topic that has being studied by many and are broadly
enough to hold many papers on just this topic, however it is
important to understand that aspects like culture, society and
sharing it was crucial for the development of the human kind.

It is hard to see the human being living lonely and not being part of
a society. However it happened long ago, around 250,000 years
ago. This lonely way of living just shifted a bit later, around 40,000
years ago, to a specie called Homo sapiens, which looks almost like
the modern men and then they started to produce culture in an
alarming pace, from tools to cave paintings. And just in 12,000 ago
the human started to live in society which first started at China.
From now on the human strategy to survive was pretty much the
culture we created and we teach each other, for example when we
started to hunt in groups, tools were use and shared between the
group. The next step was though the creative power we have. We
started to shape the nature and the environment for our needs.
Since then we have being living in society and our survival depends
on that.

20
The science that studying the society is called Sociology and this
science define culture as a “designs for living: the values, beliefs,
behaviours, practices and material objects that consist a people’s
way of life” (Macionis & Plummer, 2008). Culture has also a similar
view at the Anthropology (study of the human being), it says that
“mass of ... learned and transmitted motor reactions, habits,
techniques, ideas and values” (Kroeber, 1948, in Valsener, 2000) It
means that we are capable of developing culture, to design
solutions for our day to day problems, and more we can teach our
offspring. Chimpanzees are another species that are capable to
produce new culture and teach each other but instead of the
humans they are limited, which brings the humans as the unique
specie that rely its survival on culture rather than biological
instincts like ants and fishes.

We started to see our surrounding and build meanings for it, we

could through our creativity power transform elements in symbols,
which could mean something in particular that anyone that shares
the same culture would understand, then those simples shifted to
spoken and written words. And this was the key to share the
culture further.

Consumer’s behaviour models

Consumer behaviour, according to Schiffman and Kanusk (1997, in
Matos et al, 2007), is a “learned predisposition to behave in a
consistently favourable or unfavourable manner with respect to a
given object”. Although, a better yet way to clarify it, is the
definition that comes from Eagly and Chaiken (1993, in Matos et al,
2007), “a psychological tendency that is an expressed by
evaluating a particular entity with some degree of favour or
disfavour”. These behaviours that can be expected and are
influenced by internal and external factors which include aspects
that those companies have control over, like the Market Mix or
internal influences as personal reasons or the economy or even
social influences.

21
Behavioural Model - I
As described above, consumer behaviour is influenced by some
factors which the main ones are discussed and theoretical models
are expanded by following authors. The first model which comes
from Huang, implies that the consumer are influenced by three
factors which follow, Price Consciousness, Price-Quality and Risk
Awareness, which can be represented by the model at the figure 1.

Price Consciousness
Most books agree that the price is an important factor for the final
decision. Lichtenstein et al. in Huang et al., 2004 braking down the
price psychology found seven price related constructions. One of
the theories is that people set a price range expectation for the
goods and analyse how attractive this price is in related with the
market (Janiszewski and Lichtenstein in Huang et al., 2004).
Comparing prices is another important matter at consumer’s
behaviour. So, the idea that consumers use the original price as a
reference price the counterfeit products would take advantage of
lower price in order to attract customers (Huang et al., 2002).

Price- Quality
As stated by Huang consumers has an expectation regards the
price which is proportional related with one another, price and
quality. In other words consumer expects that higher price means
higher quality goods. This expectation is even more important
when the product or service lack in information or when the
consumer is not able to judge the quality by themselves (Tellis and
Gaeth in Matos et al., 2007). As stated before counterfeit products
attracks customer by lowering prices therefore people has a lower
expectative from the quality point of view of this kind of product.
For a consumer that quality is a critical issue, this is a disadvantage
which makes this customer not likely to consume illegal goods
(Matos et al., 2007).

22
Risk Awareness
The risk is described by Havlena and DeSarbo (1991 in Houng et
al., 2002) as some issues like, “performance, financial, safety,
social, psychological and time/opportunity”. Consuming pirated
products consumers perceives the lower price an associate with the
poor guaranty, performance and more. By deciding using the
product the “risk” implies in making a mistake and the
inconvenience of committing this mistake (Peter and Ryan, 1976 in
Huang et al., 2002). It is important to see that as Mitchell (1992, in
Houng et al., 2002) claim that perceiving the risk has a great
interference at the final decision making process. So to conclude,
the influence of the risk awareness being positive or negative
comes when consumers balance the lower price it is found in
counterfeit products with the chances of having problems like
performance issue, financial, quality, the psychological
consequences of consuming counterfeit products. Therefore
consumers that are more (less) aware of problems and perceived in
the “long” term problem will have unfavourable (favourable)
attitude toward counterfeit products (Matos et al., 2007).

Price
Consciousn
ess

Price -
Behaviour Piracy
Quality

Risk
Awareness

Figure 1 - Model I - (Huang et al., 2002)

Behavioural Model - II
This model was developed by Ang et al., (2001) at the same time of
the previous one. Both researchers reached different results even
though some similarities can be seen on both papers. However

23
what really grabs the attention is the differentiation that Ang et al.,
purpose that the Value Consciousness make. For instance the risk
awareness changes from a negative to a positive behaviour if
compared with the previous model. Other points that Houng
(2002), purposes are integrated at some point in this model which
is represented at the figure 2.

Value Consciousness
His research pointed that some of the consumers that knowing the
counterfeit product buy it exclusively by the price factor. This
behaviour was also found in the research from Bloch et al. (1993)
and Albers-Miller (1990) in (Ang et al., 2001). But this suggests that
there are two groups the ones that are pirate consumer
consciousness. First group are those that are possible technology
savvy and believe that legal and pirated items are equivalent in
terms of quality, performance, branding but lack in price. They see
themselves as good shoppers where they consume the fake
product having the benefit of good price. While the second group
see the price as a big inflectional point, it is big enough to believe
that this low price compensate for the lower quality and
performance. They feel that businesses are exploring by selling
legitimate goods for unfair prices. Another argument that are
pertinent for this situation is that people that cannot afford legal
software, music, video and pirate it, and justify this illegal action
justify it by saying that no warm was made since Hollywood stars,
singers, and giant software companies already show huge annual
profits, and have a great lifestyle, and they still enjoy the enhanced
popularity there the fake products helps by being widely available
(Sykes and Matza, 1957; Cordell et al., 1996, in Ang et al., 2001).
Therefore those that consume piracy and are aware of this
compared with those that do not support the piracy see a such
product less risky benefit the society, and see groups that sell/
distribute pirated products as a trust source (vide appendix A) (Ang
et al., 2001).

24
Risk Awareness
This assumption where people trust groups and counterfeit
products change the way they perceive risk. So is possible to
conclude that those that usually consume counterfeit products
compared with those that are averse of piracy, perceive less risk
towards piracy, therefore showing positive behaviour on this
concern (Ang et al., 2001).

Integrity
Consuming pirated products is illegal, and respect of the law needs
to be considered. A research made in 1996 showed that the
willingness of consuming pirated products is negative due the fact
that it is illegal (Cordell, 1996, in Ang et al., 2007). Therefore those
who have lower ethical standards and those that do not see this
behave as unethical are more likely to fell less guilt while
consuming piracy rather than those who value integrity (Ang et al.,
2001).

Personal Gratification
While consuming piracy it is possible many times, for instance, to
realize quality issue, lack of customer support, image quality when
looking at the motion picture industry or sound issue when talking
about the music industry, and yet people are willing to sacrifice
quality when the sense of accomplishment that comes with a legal
product are less important. Researched in 1993, that piracy buyers
are less confident, less successful than non-buyers. Also those are
characteristics associated with that which looks for social
recognition (Bloch in Ang et al., 2001). Swee simple concludes that
those who are more value conscious, seek personal gratification
and have more integrity will not be in favour of piracy (Ang et al.,
2001).

Social Influences
Swee claims that individuals can be influenced in breaking rules (or
not) by their social group. This influence extent depending on how

25
susceptible this person is regarding the pressure group. This
consumer susceptibility is defined as “ the need to identify with or
enhance one’s image in the opinion of significant others through
the acquisition,... the willingness to conform to the expectation of
others regarding purchase decisions, and the tendency to learn
about products by observing others or seeking information from
others” (Bearden, 1989, in Ang et al., 2001). This mean that, there
are two forms of susceptibility, the fist one would be when people
by observing other experience with the product regards quality and
if it is a wise buy. It usually happen when the consumer does not
know the product category, characterized the informal susceptible.
The second (normal susceptibility) are characterized when
consumers seek for other’s opinions for example when they want
to make a good impression. Family and friends are crucial at this
process they can contribute or stop the process depending on how
strong is the attitude approved by them. Therefore if purchasing a
pirated product is now seen as good by his/her relatives, it will
influence negatively towards the consumption of pirated goods, it
also happen if they seek for other opinion (approval), and it is
crucial in that particular situation (Ang et al., 2001).

Informative
Price
Susceptibilit
Conscious
y
Attitude
towards

Normal Piracy Integrity

Susceptibilit
y
Consume Personal
Intention Gratification

Figure 2 - Model II (Ang et al., 2001)

26
Behavioural Model – III
This third model that Matos et al, purpose are based in the previous
two models however some additions were made. Also the
assumption of people buyers that justify their behaviour claiming
that no warm, or the assumptions that the piracy enhances the
popularity are discarded by the author. Furthermore Matos discard
the possibility what the risk are perceived differently by those that
trust the pirated suppliers. On the other hand the model (figure 3)
takes the previous models and extended it with the influence of
previous experience and personal risk averseness characteristic, it
adds the theory of reasoned actions.

Figure 1 - Model III - (Matos et al., 2007)

27
Previous Experience
It was found that that previous experience that a direct connection
of how buyers and non buyers perceive the consumption as risky,
trust worth, the ethic behind the action (Ang et al., 2001). Because
of that consumers that have already consumed (never consumed)
a pirated product are directed related of how favourable
(unfavourable) behave towards piracy.

Risk Averseness
“Risk averseness is defined as the propensity to avoid taking risk
and is generally considered a personality variable” (Bonoma et al.,
1979 in Matos et el., 2007). This is and psychological trait that is
important to differentiate buys and non-buyers (Donthu and Garcia,
1999, in Matos et al., 2007). This risk can be divided into some
point that buyer of counterfeit products might face, for example
performance issue, safety, social, physiological, no warranty or any
other service that are offered for legit products (Huang et al.,
2002). So it is logical to say that those who are “more (less) risk
averse will have unfavourable (favourable) attitude toward
counterfeit” (Matos et al., 2007). So by consuming those types of
products consumers perceive the lower price an associate with the
poor guaranty and performance.

Theory of Reasoned Action

Martin Fishbein and Icek Ajzen (1975 in Bordens & Horowitz, 2001)
that people are “relatively thoughful creatures and are aware of
their attitudes and behaviour”. This theory simple states that
peopleAttitudes
behaviour is result of the strenght of of the intentions. Or
people toward
that are willing to consume countefeit good have positive
behaviour towards pirary (Bordens & Horowitz, 2001).
behaviour

Theory of Planed Behaviour

Subjective Behaviour
This theory is the extension of the Theory of Reasoned Action and it
Behaviour
norms Intention
is also carried out by the same authors, Martin Fishbein and Icek
Aljzen but in 1980 to 1987. This theory divides in three step
Perceived
behaviour
28
control

Figure 4 - Theory of Planed Behaviour (Bordens & Horowitz, 2001)

process (figure 4). This process emphasizes that if the person
thinks that watching a movie, associated with the attitude of
having to download it illegally is positive, that other peers evaluate
it positively and that and that the behaviour can be done fast than
the person will commit to the behaviour (Eagly, 1992 in Bordens &
Horowitz, 2001).

Attitude toward the Behaviour

This is the first of factor, this comprehends in the attitude that the
user has towards the behaviour, not the object. For instance a
person that likes to watch movies at home, because they fell more
comfortable than going to a cinema. However to do so, they need
to download movies through illegal sources, and they do not like
doing it. In this scenario watching illegal download movies is the
object of the attitude. Therefore the theory says that the attitude of
a person towards the behaviour of watching movies at home, which
includes, having to acquire it through illegal forms, better predicts
the action than their attitude towards watch illegally downloaded
movies because it affects their intentions (Bordens & Horowitz,
2001).

Subjective Norms
This refers of how you believe that your friends and family will
evaluate your behaviour. This scenario can be seen when the
person believes that “all his friends also watch illegally downloaded

29
movies”, so if he downloads is not an issue. Moreover, his friend’s
behaviour is seen as normative, a standard to compare with. So
this situation the positive response is also acquired (Bordens &
Horowitz, 2001).

Perceived Behaviour Control

The third factor refers to the person’s belief that the behaviour is
easy or hard to be finished. For example, if the person knows that
because of the fast bandwidth they have and where to download it,
the movie will be ready in a reasonable time like 10 minutes the
result will be positive (Bordens & Horowitz, 2001).

Technology
The society has being pushing researcher to develop new and
better way to communicate, before, the society were struggling in
reproducing books, so a copy machine was invented. This idea
follow by the Radio, TV, Telephone, Mobile Phones, Fax Machines,
Internet High Definition TVs, internet Broadband, well, it goes on
and on. However technology that is particular important for this
paper is the role of the ARPANET, which became the Internet.

This technology was developed by the Advanced Research Projects

Agency (ARPA). The idea of the network was to enable scientists, at
the beginning, to communicate with each other across computers
instead of using physical magnetic tape or punch cards. In 1972
the project started to take shape, some universities, commercial
organization, laboratories involved with the ARPA project, were
interconnected with the ARPANET. The system was conceived with
the principles of communication reliable enough to resist a war,
therefore the network was decentralized. At the middle 1970s the
network started to show growth and by 1980s it already had
thousands of computers. This growing has being increasing in an
alarming year after year the user base rises, now the number of
user is over 1.66 billion users which represents 24.5% of the world
population [internetworldstats, 2009]. Nowadays it is virtually

30
impossible to stop internet unless all website hosts, and ISP all over
the world are shut (Kahin, 1997).

Internet urge for socialization

In 1977 the personal model was started to be commercialized the
users started to create specialized websites that was called BBS or
Bulletin Board System. This network was been used for
communicate with people that had access to it. Those networks
were usually user self governance and free speech. Almost from
the beginning enthusiasts started to build more BBS networks
which would be designed to host niche subjects so on that time
people were already thinking about sharing ideas. At this early
stage people were already getting together and the free speech
started to raise some questionable activities. The first known was
with a group that wanted to “phone phreaking” which was refers to
those that wanted to connect to the network but without to paying
long distance calls, and protest phrases like “information wants to
be free” started to pops up with hackers and crackers that were
protesting against the regulation that protected against software
copying (Jones, 2002). Although later on around 1995 to 1997 the
BBS network sank due the new technology the “World Wide Web”.
This new technology was much ahead than BBS, better
connectivity and support brought the old network down rapidly.

The following two years (1999), Shawn Fanning and Sean Parker
released the software that made history. Napster. This software
made easy to anyone search music and downloads it. The program
worked in an easy and simple way, when installed it would seek for
music file on the user’s computer. This library would be sent to the
main server where would gather all library across all users and
simple when someone search for the music, a connection between
everyone that hosts the same file are made with this person that
wants a copy of the music. This system where “P2P” was used
made the software change the history. The reason was that any
user was able to download any virtually music available through

31
the users library which turned to be at that time the best online
music library available (February 2001 reached over 26 million
users), and more if the same files were found in many users they
would help to distribute it, so how was looking for would get the file
enjoying a good connectivity. The record label companies started
to fire law suit against the service, and grounded the service late
2001. Although not long after a new technology raised called
KaZaa/Emule/Gnutella/Limeware which was basically the same
system but the big difference was that no one could possible shut
the service since there was no centralized server, even though as it
happen, the RIAA prosecuted the company it would not turn the
service off (Einhorn, 2004). But the network started to be filled with
viruses and the search never worked well enough to grab general
attention as Napster and the next wave. We are at now days at the
third and big wave of the sharing technology, called BitTorrent. It
started in 2004 and the way it worked was just as the others
however the search would be done through simple website that
holds on their indexes the “torrent” file. This little file gives the
BitTorrent client all information needed to look across the internet
and convenient download many files like a whole album or just on
simple file like a video.

The internet traffic at night in 2007 peaked 95 percent coming

from P2P (peer-to-peer) claimed a German deep packet inspection
group and the same institute says that the traffic during the day
does not go below 49 percent [Anderson, 2007]. Although from
2007 the trends shows that the BitTorrent protocol are slowing
down with the popularity of streaming video website like YouTube,
Hulu, Vimeo and many other [Ernesto, 2007]. The second internet
trend is the way people communicate and share thoughts,
commentaries, videos, even their personal photos and life. Social
Networks. Facebook show some impressive numbers, their own
website show public statistics for example, it counts with more than
250 million users, and the numbers of users that log on once a day

32
at least are nearly twice as much as the population of the UK
reaching an impressive number of 120 million users. It host more
than photos and this data base grows in 1 billion photos per month,
10 millions videos monthly are uploaded, and the really impressive
number comes regards when people sharing content which is 1
billion pieces weekly (new stories, links, posts, photos, videos) and
the network are growing [Facebook, 2009]. YouTube.com is the
second big example of the power of the people, many videos
hosted there are owned by TV networks however it not all. In
December 2008 alone the US users viewed over 5.4 billion videos
on YouTube.com, which represents almost 40 percent of the online
video market [comScore, 2008].

New project development

If the businesses world is dynamic is as never before. Organizations
are joining new markets, the global economy changing (vide credit
crunch which changed the banking system affecting all credit
based economy like the UK and the US), and companies needs to
be flexible enough to face those problems to be competitive. And
some strategies come up to fill this gap between organization and
the need to be competitive. We are talking about the competitive
strategies. For instance Cost leadership strategy, which expands in
order to enjoy economies of scales. Another strategy would be the
diversifying their portfolio which has more change to meet
customer expectations and needs therefore a better change to be
successful (Kumar & Phrommathed, 2005). It is pointed out by
Griffin and Page (1996, in Kumar and Phrommathed, 2005) that the
“key competitive advantage in the marketplace is the ability to
repeatedly commercialize successful new products”. It is logic to
conclude that to maximise this output of successful products some
strategies are required. Although before going further into
strategies, “Innovation” and “Creativity” needs to be defined.

33
Innovation
It is the ability that the company has to produce the technology,
products and services based on researches which could be by
analysing the market and/or by meeting and analysing customers’
feedback. Innovation is subdivided into two more:

1- Radical Innovation – This characteristic refers when the

company discontinue the product and technology and create
new ones to meet the new demand recognized. This new
demand created face new competitors, distribution channels
and more.

2- Incremental Innovation – At this point is simple defined when

the organization identify a demand for a new feature.
Technologies are improved to enhance existing products.

Creativity
Creativity refers straight to the point where the company through
observing and analysing the market and customers’ feedback, is
able to develop products and services that will meet their
expectative.

Innovative and Customer Responsive Strategies

Basically, these two strategies have different targets. Innovative
strategy based companies are those that tries to lead the market
with completely new products and services. This proactive
companies push the market and because of that they enjoy low
competition therefore they are able to dictate the price. On the
other hand it is high risk strategy since new market and services
might not be ready for it, they are technology driven rather than
the other group which is customers driven. This reactive strategy
characterize companies that are good at improving the market,
incrementing it with new features that the customers wants, they
enjoy a more stabilized scenario, although face highly competitive
market where consumer dictates prices, meaning that consumer

34
has power of bargain (Porter Five Forces) (Kumar & Phrommathed,
2005).

SWOT
This tool was well discussed although it helps visualise the situation
in four aspects, Strengths’, Weakness, Opportunities and Threads.
Piracy and content owners will be reviewed using this tool.

Table 1 - SWOT analyses of the Piracy and the Content Owners

Piracy Content Owners

Strengths Strengths
• Extreme low price • High quality

• High available across the • Consumer trust

internet • Branding
• Flexible • Capital for innovations
• World wild spread • Governmental support
• Can despair easily
Weakness Weakness
• Governmental support • High price
• Rely on experts to crack • Economic sensitive
security • Cannot point at targets
• Low quality without support
• Bad reputation • Rely on investors
• No support
Opportunities Opportunities
• Low price penetration • New markets
• Economic crises • Great expansion market
• Developing and poor • Anti- piracy agreements
countries • Lower distribution prices
• Legal market moves slowly
Threats Threats
• Law problems • Piracy
• International anti-piracy • Economical down turn
agreements • Profit jeopardized due piracy
• Rely on trustable network • International law barriers for
• Constantly evading from importation and exportation
police

35
Literature conclusion
To summarize this extensive literature review, it is clear to see that
the piracy apart from being a social movement comes from long
time ago, long enough to have history in revolution and crossing
technologies. Even though we know this long history the piracy
faces mixed behaviours, from consumers, government and
especially from industries. Industry needs to innovate to cope with
the pressure of the piracy and some has found in this tool a partial
solution for it (vide at the appendix B, C, D, E and F for further
information and case study of companied that innovates their
services in different industries). The academia analysing the
consumer point of view brought some models that in theory
represent the consumer behaviour which are affected by many
aspects. Those researches try to build effective ways to deal with
the problem. Although due the limited imposed important aspects
was left aside and will be suggested later on.

Methodology
While developing the methodology is important to answer two
points, what methodologies and methods were used and them
justify why those were used. Some definitions would help to further
understand.

Methods consist into techniques or process used to gather the

information needed. In this paper two methods were used, survey
and focus group.

Methodology refers more at the “strategy, plan of action,

procedures or design lying behind the choice and use of particular
method to the desired outcomes” (Crotty, 1998).

Positivism and Interpretivism

The positivism is one of the scholars that see the science as true
based on the natural experiences. This philosophical approach was
disseminated by Auguste Comte as Crotty (1998) claims. Comte

36
says that it is a mistake to research and try to explain the man,
nature, and society with mathematical precision since mathematics
not always show the truth (Simpson, 1982 in Crotty, 1998). This
method is criticised whereby the results are unreal, due the biased
research. To contrast the positivism the Interpretivism comes
along. The concept is to research the behaviour and the reasons
why people think that specific way. Marx Weber was one of the
thinkers that adopted this concept.

Table 2 - Characteristics Positivism and Interpretivism (Sandberg, 2004, in

Skoldberg & Alvesson, 2004)

Metatheoretical

Assumption About Positivism Interpretivism

Ontology Researcher and reality Researcher and reality

are separate are inseparable

Epistemology Objective reality exist Knowledge of the world

beyond the human is intentionally

mind constituted through a

person’s experience
Research Object Research object has Research object is

inherent qualities that interpreted in light of

exist independently of meaning structure of

the researcher researcher’s

experience
Method Statistics, content Hermeneutics,

analysis phenomenology
Theory of Truth One to one mapping Interpretations of

between research research object match

statements and reality lived experience of

object
Validity Data truly measures Defensible knowledge

reality claims
Reliability Research results can Researchers recognize

be reproduced and address

37
 implications of their

favouritism

Interpretivism is important in this paper since that some of the data

collected come from the released studies and publications from
organizations like MPAA, RIAA, BSA, even though their data and
conclusions usually goes against the piracy and looks that there
never a positive effect however the pure data is somehow reliable.
Moreover it would be extremely time consuming and expansive
keep track at this kind of subject since it deals with worldwide
organization, different cultures, social levels, and all those would
influence the final result also, it would require internal and
“strategically” data from companies which makes it unfeasible.

Quantitative and Qualitative

Qualitative is one method of research where it better focused on
find out the reasons why humans behave on that particular way.
Quantitative on the other hand uses mathematical models and
hypotheses to understand such behaviour. As pointed out by
Ridenour and Newman (2008), qualitative and the positivism
together can be used while “oberving and interpreting reality with
the aim of developing an explanation of what was experience” they
also say that the quantitative at this point is used to test an theory
rather confirming or denying it.

This research use the qualitative method to seek understanding of

why people even though know that the good is counterfeited still
consumes it, as explained many factors have some influences over
the final behaviour and which those models can be seen at the
figures 1, 2 and 3. It also helps to understand the position of the
industry at these points that struggles to innovate which we can
see at the case studies (Appendix B, C, D, E and F). However those
assumptions will just be supported by applying the quantitative
research, where it seeks in a neutral represent the real world.

38
Research design
This paper consists into Focus Group and Questionnaires which one
was carefully chosen to balance the result in order to have a better
understanding of the reality.

Focus Group
More often used by companies this qualitative research which
means that it tends to be exploratory. It explores the interaction
between the concept (idea, product) and the group. The results
need to be carefully analysed to avoid bias interpretation. The
group’s responses represent just a small segment of the target
rather than quantitative which gives a better and broad
representation, although it is important to consider the results. As
one of the positive factors this method researches have a deeper
view of the whole experience instead of bullet points with question
and answers. It is better used when related with ideas, prototypes,
to develop q quantitative questionnaire. But it is not suitable for a
situation for example where the result will not change the product
or service for instance if a software company that will release the
product in the coming week, the result will not affect the release
after all the development is done. When talking about hypotheses
it is often supported with quantitative methods. (Edmunds, 2000)

Questionnaires
This form of gathering data is popular because it is flexible, easy to
distributed, other important aspect is that when looking at financial
aspects it is possible to reach and collect large amount of
information with less resources allocated then using any other tool.
Nowadays with the aid of the technology is possible to create and
process questionnaires in matter of hours. This is also the
weakness of this tool. Anyone can create it but just fill knows how
to create a well done questionnaire claim Dornyei (2003).
Disadvantages of this methods results in not reliable data. For
example the questionneire needs to be sufficient simple and go
straight to the point so people when filling it alone can understand

39
the question. People has a limited time that is willing to spend
answering, so the result can be shallow. It limits the possibility of
the user to correct the answer, but one of the biggest problems
related with questionneires is that people do not ways report the
true. Some reasons for that was explored and involves social
desirability and prestige bias (Dornyei, 2003).

The survey created in for this project consist into twenty questions,
where was used multiple answers and scales. It was designed using
Google Docs, where it was possible to distribute through e-mails.
Effort in posting at two online forums, one with piracy as a theme
and the second are for general usage, was done so in matter of one
day was collected over 65 valid answers. The advantage of using
this tool was that it helped disseminate and reach people all over
the globe, and it was important since piraty happens virtually
everywhere. To process the data collected was exiting since was
possible to look at the realtime answers. On the other hand it
limited the answer by users that go to forums the link was posted,
people that are more familiarized to computers and those that are
online at that period.

Validity and Reliability

It is logical to say that when the research is done,, the data
collected needs to be valid does not matter if it is a qualitative or
quantitative, if the research is compromised it worth nothing. For
instance when talking about qualitative research the data needs to
be honest, rich, when quantitative the sampling needs to be well
picked and the data needs to be well processed (Cohen, 2000).

In this paper the data collected at the qualitative focus group is

reliable enough to count their opinions. While moderating the
meeting, people those different opinions and that had computer
knowledge was invited to attempt to the group. Also since this
research touch the illegal behaviour, the participants, the meeting
was not recorded so no formal recorded were kept and it was

40
enforced the ethics involved on it. Personally I do believe that was
possible to transmit confidence enough for them in order to get the
most sincere answers. Also while using the quantitative method the
list was checked to be sure that just valid forms were participating
of the grand totals. External data used was just those selected from
formal report, and well known third party companies.

Reliability goes along the research especially quantitative one,

when the results can be reproduces if the situation is recreated.
Although the naturalist approach claims that it is not possible to
recreate the same situation specially when looking at the
qualitative method (Cohen, 2000). This research for instance was
picked two forums where one of them the main subject is piracy,
where the other is general. As a participant of those forums, and as
I have a background about the topic, some of the answers was
expected which also meets the research done by Matos et al.,
(2007) and Ang et al., (2001).

Sampling
While researching a topic is virtually impossible to get everyone
involved opinions and answers, also the efforts like, time, financial
needs to be planned previously. So to make the research feasible,
carefully selected niches needs to be done, so the results could
represent that niche and it is reliable to be reproduced if another
sample is picked (Cohen, 2000). Especially in this situation where it
is impossible to get the whole world opinions just some niches were
selected for instance, two forums where the first were representing
those that they are interest in pirated content, where the second
forum was a regular with no particular theme. Those two in the one
which are themed in piracy was picked in particular to measure
their consciousness about law, copyrights and behaviour, while the
second forum would represent a random pick of people that look
the internet as a social tool.

41
Ethical and Considerations
This paper is based and followed the ethics proposed by the
University of Wales Lampter which the form can be seen at the
appendix G.

The topic touch illegal behaviours, and trying to get the best and
honest response from the participants had to re enforced that they
privacy will be kept, that the data collected through the internet
will not be tracked and that the group invited would not be
recorded so participants could feel more comfortable while
debating this sensitive topic.

Findings
It is divided in two methods, the survey conducted online and the
focus group.

Online Survey
This survey which is at the appendix J shows in some mixed
answers. The total number of responses was 71 however 5 were
disconnected due the no real responses or just under 5 questions
filled. From the valid data collected 85% were males, 63% were
aged between 19 and 25. The vast majority confirmed shopping
online which just 36% have ever bough digital material (i.e. mp3,
eBooks, films, games). Over 39% use Amazon.com regularly to
shop, while 32% shop somewhere else which was not included. The
number of hours that people spend weakly using computer in
average weekly between 2 and 3 hours daily represented 35%
while those that use computer over 3 hours daily holds 47% of the
chart. Some interesting feature comes up considering the reasons
that people use the computer for other than working, turns out that
the main aspect is for reading new with 27% at the first choice and
23% at the second place. The pure concept of socializing comes at
the second position also in the second choice with 22%. Paying
online games, like MMORPG (i.e. World of Warcraft, Counterstrike,

42
online Casions), tied with 22% as well. Partially of this result can be
seen also as a social aspects whereby people play online games
because they want the feeling of playing with somebody else
although this aspect was not considered due lack of details
collected at this point. 22% is the result also of the streaming
online media as a second choice. At this point streaming media
content reached a good mark comparing the previous question
where it got only 6% of the votes. A massive number of people
download pirated content a universe big enough to represents
92%. On this universe of those that use illegally content 46%
download something that infringes the copyrights, while 24%
download weekly. The question 11, enquired volunteers to rate in a
scale 1 to 10 how they feel about trusting their source of pirated
content and just over 81% felt comfortable to rate it between 6 to
10 (included). The rating 5 at this point was considered hostile,
considering the principle that counterfeit goes again law and
people are tends to look law as ethical (Matos et al., 2007).

Narrowing down those that download illegally content, 66% blame

the price as the main issue, while people that claim they are just
testing before buying is 31%. Looking at the answers for a second
choice about 17% would be that people wants to buy it but wants
to test the material and see if it worth it. The “other” option was
activated at this question, and some answers grabbed my
attention. In some claimed the problem with the technology like
DRM, avoid legitimate buyers not use elsewhere, while pirated are
no blocked, another fantastic quote is comes from about volunteer
that points out that he is fine for paying for contents buy usually
they are limited at the technological level or at the library. Many
said that it is just easier download illegally rather can going to a
shop and acquiring a legit copy.

The internal aspects was the focus of the next question where was
inquired if while consuming counterfeit product they would feel bad
for it, and almost 37% confess that feels bad doing it. Over 33%

43
would change the habit of consuming counterfeit media if there
was a source good enough that could stream it through the
internet. And as much as 23% are willing to pay for it. Interesting
enough around 70% would rate themselves as pirated 66% have a
feels good being a pirate. For further data analyses the tool Two –
Sample t-test were used in order to test hypotheses. The first
hypothesis is the following one:

The more(less) trust relationship between the consumer and piracy

supplier, it has a positive (negative) impact on the number of
counterfeit goods consumed.

Using the Two Sample t-test showed that the probability p which is
0.0600182, there for usually is possible to assume that the
variances are equal. The P-test Assumed Equal Variances that the
probability is equal to 0.002392 there for this hypothesis is
rejected. (Vide Appendix H).

The second hypothesis is that:

Those that (do not) use the internet for social propose, are (not)
likely to have a positive (negative) behaviour towards piracy.

Again this two groups were tests under two sample t-test and the
results for the probability p=0.14351 is higher than 0.05 and
therefore it is assumed that the variances are again, equal.
Although this time the probability showed a p=0.844445
confirming the hypothesis. (Vide Appendix I).

44
Presentation of raw data

Figure 2 - Gender

Figure 3 - Age

Figure 4 - Online shoppers

45
Figure 5 - Digital shoppers

Figure 6 - Online store

Figure 7 – Hours spent on internet weekly

46
Figure 8 - Internet usage

Figure 9 - Internet usage second choice

Figure 10 – Download of content

Figure 11 - Frequency illegally file are downloaded

47
Figure 12 - Rate trust on pirate source

Figure 13 - Protocol used to download illegal content

48
Figure 14 - Reasons that led to piracy

Figure 15 - Personal feeling after downloading illegally content

49
Figure 16 - Feeling of knowing someone else is download illegally content

Figure 17 - Evaluate your computer skills

50
Figure 18 - Stream

Figure 19 - Paid stream media

Figure 20 - Rate your behaviour towards piracy

51
Figure 21 - Self rate as a pirate

Focus Group
Four volunteers showed for the informal research that was placed
at an ordinary coffee shop at central London. The unique criteria
were that the place had to be private so the participants could hear
each other and feel confident between friends. Two out four were
my friends while the other two was the first time meeting them.
However they were friends of my two colleges. Those volunteers
were communicated that the conversation will not be recorded
however I would take some small bullet points to remember the
conversation. At the beginning was stipulated that the meeting
would last 30 minutes however the conversation were exiting and
all participants wanted to share their options and beliefs about the
topic, what extended the meeting 30 minutes longer. The
discussion were moderated by myself, to avoid bias interpretation I
reserved myself for only conducting and suggesting topics trying
not to be part of the actual conversation but keeping the
volunteers on track.

Topics discussed are the following ones:

52
1- Usage of piracy – All integrants were listening and watching
videos on pirated, Mr. A, pointed out that the reason of the
industry providing more storage for devices like MP3 players,
mobile phones, even computer is that they need more and
more storage for the content they have. Mr. B said “there’s
no point having mp3 players with 16gbs (refereeing to the
Iphone) and paying for everything. It would take £5.000 to fill
it all, no one has money to spend on that, and the industry is
still pumping the storage, looks like the mobile, mp3 player
rely on piracy”.

2- Paying for the content – Two of them (Mr. C and Mr. D)

claimed that they buy the physical disc after watching the
movie. They said that if the movie is worth having, it was fare
enough to pay for it and have access to the features added
just on the DVD/Blue Ray disks. Mr A, said that she usually
goes to the cinema to watch the movies but if she wants to
watch again, she does not pay, but download illegally.

3- DRM – The volunteer Mr. B brought up a good argument

which is the industry that limits the usage of legal copies with
DRM. Some mp3 player do not play “DRM(ed)” music, also
games can be installed just 3, 4 times. If you want to install
over the limit you have to contact the company what is a
“pain”. He said that Spore was a good example (Appendix F)
he first downloaded the pirated version and enjoyed the
game but due the feature that required the online activation
he decided to buy the original game. The original was bought
online which came with DRM, after a while he had problems
with the installation and decided to give up the original copy
and go back to the pirated. This way he was able to enjoy the
feature of the original game but activating the pirated
version of the game.

53
 4- Streaming media - Three out four said that they do not
usually download illegally content from BBC because they
use BBC Iplayer instead. They said that the service in general
is well done and meet their needs. Since the video are
available for 30 days day can watch it without problems. Also
pointed out the quality is reasonable good if you want to
watch it streaming but if you download you can get it in HD
(high definition). Although service for them lack in surround
sound and movies.

5- Business and piracy – Mr. C said that he believes that it is

understandable organization charge for entertainment
content although he believes that information material like
documentaries, and cultural related should not be charged.
Mr. A said that software companies enjoy the piracy like
Microsoft that dominate the desktop with Windows, and even
in China where the software is well spread as a pirated
version helps the company to grab market and secure their
position at the top. Mr. B said there is no way that the piracy
will stop so rather than investing in ways to avoid people to
“crack” the system they should offer good services and
features that is not possible to reproduce. For example Would
of Warcraft that has more than 10 million users, all has the
original game since a monthly fee is required to play, of
Warcraft 3 that to connect at the “Bnet” needs an original
key to play online.

In general the experience was pretty good and helped me to get

some ideas of how the industry should behave.

Critical discussions of findings

It was surprising to see that the behaviour piracy comes long
before than the digital era. And the essence is still the same which
is the society grabbing the information even though the
government and the authors do not allow the distribution. But this
54
process is hard to contain and is powerful enough to bring down
governments and organization that cannot adapt to it.

Struggling to adapt to the situation at the digital era, companies

prosecute, develop technologies that protect the digital file, and
innovate bringing new business strategies or new services.
Innovation is critical to the companies since they have resources
enough to research and develop and the piracy cannot cope with
this speed. Two cases that is working good in this world of
intellectual propriety, is the Gaming industry. They invented
systems that require a legit authentication that cannot be
reproduced online. Some recording studios got together to found
“Hulu”, which is a growing website that hosts and streams full
series episodes across the web, just as BBC Iplayer does. And these
efforts are showing general positive effects against piracy.
However consumers are still looking for a better solution simple
because they want not to rely on online systems that cannot
deliver the same quality as the physical or downloaded material.

The research showed that people that a disturbing results that

almost all participants use pirated content somehow, also it is
interesting to see that they don’t usually feels bad for it, even
though they are aware that they are committing a crime. The
research were conducted and reached a good number of responses
although I believe now that it should be expanded to get more
precise data focusing niches rather than the general use. It is
surprising to see that internet is used for keeping up to date at the
news but just after, comes the socializing. The survey gave the
opportunity to volunteers to pick other internet usage other than
the first choice. Interesting was the result that returned as first
place reading new followed by a tie second place between
socializing and streaming media. I believe a lot of people were
driven to the piracy due the price tag of the good. So would be
interesting to see how personal wealth would affect the results

55
towards the frequency that they download illegally content and
their general behaviour towards self and piracy.

Conclusion
The consumer behaviour are affected by many factors and despite
of the newspapers usually publicising that the legitimate commerce
are losing territory for counterfeit due the lower price, that not all
true. The human kind has being sharing information and ideas for
ever and this made us evolve and develop even further technology
on this free speech based society. However not long ago countries
signed the international agreement to protect the ways ideas are
expressed and giving rights for those that had it copyrighted, which
is an at least ironic. Now this licensing worth money, and the rights
to the use of the technology can avoid other companies to further
develop solutions in fields so important like the medicine.

Many models came across, Huang et al., Ang et al., and served as
base to the expanded model proposed by Matos et al. I did
research all models, and proposed my model (figure 5). I agree and
tried to through my research, to poof what Ang et al., proposed
back in 2001. He said that even though people are likely to behave
negatively towards counterfeit, situations where a trust worth
relationship are built between customer and counterfeit suppliers
change the pre disposition of negatively to a positive matter. My
research tried to build a relation between those that believe on
their piracy suppliers and the frequency in which they download
illegally content. The Two Sample t-test, showed a huge difference
in between the average frequency of used pirated goods but it
should be discarded due what believe is sample error.

The social norm was the second big impact and even though all
authors came across with this factor, only the internal moral, family
approval as Matos et al., suggests, or the way people justify their
action based on the environment (Sykes and Matza, 1957; Cordell
et al., 1996, in Ang et al., 2001). But another factor that I suggest is
56
the principle of sharing ideas and culture, indeed it is what makes
us a society. The hypothesis proposed says that those that (do not)
use the internet for socialization tends to behave positively
(negatively) towards the piracy.

The other point is that the industry struggles in this conventional

business strategy to cope with the piracy. Therefore understanding
it this consumer behaviour is essential to create new strategies
that deal with piracy in a better way. Innovation as pointed out is
one of the possibilities however the piracy might not be the only
reason why companies innovate.

The model proposed breaks down the attitude and behaviour.

Studied models or just pass through away from the sum of affects
to the behaviour or put the attitude and then the behaviour. This
model shows that some the attitude comes from different areas
and therefore needs to be judged in different ways.

57
 Previo
Price Risk
us Integri
Qualit Awaren
ess Experi ty
y
encePersona
Price Social Risk
l
influen Percei
Gratific
ces ved
ation

Perceived Attitudes
Subjective
behaviour toward
norms
control behaviour

Behaviour
intention

Behaviour
toward
Piracy
Figure 25 - Model IV

Summary of findings
The consumer behaviour piracy is a result of many factors. Social
norm is one of them which was proofed that the more social
focused the user is, the behaviour tends to be positive. Sample
error rejected the hypothesis of the relation between the trusting
the pirated goods suppliers and the frequency those goods are
consumed.

Based on all research and the finding was possible to propose a

model that represents the consumer behaviour in this sense and
adding the extending the social norm.

58
Recommendation
As shown the socialization is caved in our culture and we tends to
behave in a positive way towards it sharing information and it is
not feasible change this idea all humans have. So it is very
important the media adapts to this idea as see how it could work
on their favour.

1- One solution would be to spread the media produced all over

the internet and services. As the research shown that people
just do no pay because there is no alternative.

2- No just spread but make it convenient for people enjoy

wherever they want without limitations (DRM).

3- Innovate the service instead of just offering the plane one

side service, develop features that can only be access online,
therefore needs to be a legal copy.

4- People want to try software, games, and even watch videos

before buying it. Software and games is possible to develop
“demo” where the game or software are functional for certain
time, or certain functionalities are blocked, doing so
customers would be able to try and them finish transaction.

Would be good to have a risk free service where you buy the
video/music and if liking it you can keep the file or even have
the digital and the physical which would be delivered.

5- As we depend on socializing, develop services that could

explore this human need.

6- Research what is the major factor impacts the most in the

sector and creat a strategy that goes along for instance
reduce the price like Microsoft in China is doing with
Microsoft Office 2007.

59
Limitation of research
The research was limited by timing, human resources since would
be easier having someone else’s support for conducting the
research. The limited content gathering when looking at the
measures the industry are taking, and the research that they
conduct are important for this dynamic subject but it is not easily
shared with the general public, therefore the data used were not
always the latest.

Areas of further research

First point - I believe that the research resulted into a bogus
sampling at the hypothesis where I tried to show the relation
between the in which frequency that users download illegally
content and the amount of trust on the groups that disseminate
those products.

Second Point – Further research on the topic new product

development would provide a better support for the industry point
of view

Third point – due the nature of the research being too broad, much
later sampling should be taken

60
Bibliography
Ang, H.S., Cheng, P.S. & Lim, E.A.C.T.S.K., 2001. Spot the difference
consumer responses towards counterfeits. JOURNAL OF CONSUMER
MARKETING, 18(3), pp.219-35.

Bahanovich, D. & Collopy, D., 2009. Music Experience and

Behaviour. Commercial propose. University of Hertfordshire.

Bordens, K.S. & Horowitz, I.A., 2001. Social Psychology. 2nd ed.
Lawrence Erlbaum.

Cohen, L., 2000. Research Methods in Education. 5th ed.

RoutledgeFalmer.

Crotty, M., 1998. Foundations of Social Research: Meaning and

Perspective in the Research Process. 1st ed. Sage Publications Ltd.

Dornyei, Z.N., 2003. Questionnaires in Second Language Research:

Construction, Administration, and Processing (Second Language
Acquisition Research). 1st ed. Lawrence Erlbaum.

Edmunds, H., 2000. Focus Group Research Handbook. 1st ed.

McGraw-Hill.

Einhorn, M.A., 2004. Media, Technology and Copyright: Integrating

Law and Economics. 1st ed. Edward Elgar Publishing.

Hart, D.C., 1998. Doing a literature review: releasing the social

science research imagination. I ed. London: Sage Publications Ltd.

Huang, J.-H., Lee, B.C. & Ho, S.H., 2002. Consumer attitude toward
gray market goods. The Emerald Research Register, 21(4), pp.598-
614.

Jones, S., 2002. Encyclopedia of New Media : An Essential

Reference to Communication and Technology. 1st ed. SAGE
Publications.

61
Kahin, B., 1997. Coordinating the Internet. The MIT Press.

Kumar, S. & Phrommathed, P., 2005. New Product Development: An

Empirical Approach to Study of the Effects of Innovation Strategy,
Organization Learning and Market Conditions. 1st ed. Springer.

Macionis, J. & Plummer, K., 2008. Sociology: A Global Introduction.

4th ed. Pearson Prentice Hall.

Mark, A. & Eisenstein, E.L., 2001. Technology and the rest of

culture. 1st ed. Ohio: Ohio State University Press.

Matos, C.A., Ituassu, C.T. & Rossi, C.A.V., 2007. Consumer attitudes
toward counterfeits: a review and extension. Journal of Consumer
Marketing, Emerald Group Publishing Limited(24), pp.36-47.

Melton, J.V.H., 2001. The Rise of the Public in Enlightenment Europe

(New Approaches to European History). Cambridge University Pres.

Patterson, L.R., 1968. Copyright in Historical Perspective.

Vanderbilt University Press.

Prendergast, G., Chuen, L.H. & Phau, I., 2002. Understanding

consumer demand for non-deceptive pirated brands. pp.405-16.

Ridenour, P.C.S. & Newman, P.I., 2008. Mixed Methods Research:

Exploring the Interactive Continuum. 2nd ed. Illinois: Southern
Illinois University Press.

Skoldberg, K. & Alvesson, M., 2004. Reflexive Methodology: New

Vistas for Qualitative Research. MIS Quarterly, 28(1), pp.III-XII.

Steal This Film II. 2007. [Film] Directed by Robert Greenwald.:

Ardent Films.

Stim, R., 2009. Patent, Copyright & Trademark (Patent, Copyright &
Trademark: A Desk Reference to Intellectual Property Law). 10th
ed. NOLO.

62
Tan, B., 2002. Understanding consumer ethical decision making
with respect to purchase of pirated software. 19(2), pp.96-111.

Valsener, J., 2000. Culture and Human Development. 1st ed. Sage
Publications Ltd.

Wah-Leung, C. & Prendergast, G., 2005. Buyers’ perceptions of

pirated products in China. 24(5), pp.446-62.

Amazon.com, 2009. Amazon : Spore. [Online] Available at:

http://www.amazon.com/review/product/B000FKBCX4/ref=dp_db_c
m_cr_acr_txt?_encoding=UTF8&showViewpoints=1 [Accessed 27
Augustus 2009].

Amazon.com, 2009. Amazon.com. [Online] Available at:

http://www.amazon.com/Microsoft-Office-Standard-2007-
VERSION/dp/B000HCVR3A/ref=sr_1_2?
ie=UTF8&s=software&qid=1249676659&sr=8-2 [Accessed 30 July
2009].

ameinfo.com, 2009. Sharjah Economic Development Department

seizes over 40,000 counterfeit goods in H1 2009. [Online] Available
at: http://www.ameinfo.com/205590.html [Accessed 01 Augustus
2009].

Anderson, N., 2007. Arstechnica.com : Nocturnal P2P transmissions

account for 95 percent of Internet traffic. [Online] Available at:
http://arstechnica.com/old/content/2007/11/nocturnal-p2p-
transmissions-account-for-95-percent-of-internet-bandwidth.ars
[Accessed 22 Augustus 2009].

Anon, 2009. WikiPedia : Napster. [Online] Available at:

http://en.wikipedia.org/wiki/Napster [Accessed 22 Augustus 2009].

BBC News Channel, 2006. BBC NEWS : Entretainment : Piracy 'costs

US Studios $6.1bn. [Online] BBC NEWS Available at:
http://news.bbc.co.uk/1/hi/entertainment/4972972.stm [Accessed
05 Augustus 2009].

63
BSA : Business Software Alliance, 2008. Internet Piracy Report.
[Online] BSA : Business Software Alliance Available at:
http://www.bsa.org/files/Internet_Piracy_Report.pdf [Accessed 08
Augustus 2009].

Burrows, P., 2009. Microsoft's Aggressive New Pricing Strategy.

[Online] Available at:
http://www.businessweek.com/magazine/content/09_30/b41400514
91507.htm?
chan=technology_technology+index+page_top+stories [Accessed
30 July 2009].

CBC, 2009. Counterfeit Culture. [Online] Available at:

http://www.cbc.ca/news/interactives/map-counterfeit-goods/
[Accessed 01 Augustus 2009].

comScore, 2008. comScore : YouTube Attracts 100 Million U.S.

Online Video Viewers in October 2008. [Online] Available at:
http://www.comscore.com/Press_Events/Press_Releases/2008/12/Yo
uTube_Reaches_100_Million_US_Viewers [Accessed 23 Augustus
2009].

Ernesto, 2007. Torrentfreak : HTTP Traffic Overtakes P2P, Courtesy

of YouTube. [Online] Available at: http://torrentfreak.com/http-
traffic-overtakes-p2p-courtesy-of-youtube/ [Accessed 22 Augustus
2009].

Facebook, 2009. Facebook : Statistics. [Online] Available at:

http://www.facebook.com/press/info.php?statistics [Accessed 22
Augustus 2009].

Greenberg, A., 2007. Free? Steal It Anyway : Forbes.com. [Online]

Available at: http://www.forbes.com/2007/10/16/radiohead-
download-piracy-tech-internet-cx_ag_1016techradiohead.html
[Accessed 30 July 2009].

64
Greenberg, A., 2008. Forbes, Spore's Piracy Problem. [Online]
Available at: http://www.forbes.com/2008/09/12/spore-drm-piracy-
tech-security-cx_ag_mji_0912spore.html [Accessed 20 Augustus
2009].

Greenberg, A., 2009. Video Piracy's China Syndrome. [Online]

Available at: http://www.forbes.com/2009/03/20/video-piracy-china-
technology-internet-video.html [Accessed 01 Augustus 2009].

Highfield, A., 2008. iPlayer Launch: First Indications. [Online]

Available at:
http://www.bbc.co.uk/blogs/bbcinternet/2008/01/iplayer_launch_firs
t_indicatio.html [Accessed 27 Augustus 2009].

internetworldstats, 2009. World Internet Usage statistics News and

World Population Stats. [Online] Available at:
http://www.internetworldstats.com/stats.htm [Accessed 22
Augustus 2009].

Kravets, D., 2007. RIAA Jury Finds Minnesota Woman Liable for
Piracy, Awards $222,000. [Online] Available at:
http://www.wired.com/threatlevel/2007/10/riaa-jury-finds/
[Accessed 01 Augustus 2009].

Lane, F., 2007. NewsFactor Network : Radiohead Download

Experiment Has Mixed Results. [Online] Available at:
http://www.newsfactor.com/story.xhtml?
story_id=0120013PAVDC&page=2 [Accessed 01 Augustus 2009].

Motion Picture Association of America, 2009. Motion Picture

Association of America. [Online] Available at:
http://www.mpaa.org/piracy.asp [Accessed 31 July 2009].

Nielsen - Online, 2009. Nielsen. [Online] Nielsen Available at:

http://www.nielsen-online.com/pr/090514_2.pdf [Accessed 20
Augustus 2009].

65
Reston, 2007. For Radiohead Fans, Does "Free" + "download" =
Freeload"? [Online] comScore, Inc Available at:
http://www.comscore.com/Press_Events/Press_Releases/2007/11/Ra
diohead_Downloads [Accessed 01 Augustus 2009].

Schiesel, S., 2004. New Yoor Times : File Sharing's New Face.
[Online] Available at:
http://www.nytimes.com/2004/02/12/technology/circuits/12shar.ht
ml?
ex=1391922000&en=da75cefbee224928&ei=5007&partner=USER
LAND [Accessed 24 Augustus 2009].

Sweney, M., 2009. BBC iPlayer boosts Virgin Media video

downloads. [Online] Available at:
http://www.guardian.co.uk/media/2009/feb/12/bbc-iplayer-virgin-
media [Accessed 25 Augustus 2009].

Torrentz.com, 2009. Torrentz.com. [Online] Available at:

http://www.torrentz.com/search?q=axxo [Accessed 23 Augustus
2009].

Tyrangiel, J., 2007. Google Scholar: Radiohead. [Online] TIME

Magazine Available at: http://mistergui.com/downloads/Pay
%20what%20you%20want.doc [Accessed 01 Augustus 2009].

Xbox.com, 2009. Xbox 360. [Online] Available at:

http://www.xbox.com/en-US/live/netflix/ [Accessed 10 Augustus
2009].

Yu, E., 2007. Revenue loss from pirasy in Asia up: News: Software -
ZDNet Asia. [Online] Available at:
http://www.zdnetasia.com/news/software/0,39044164,62013101,00
.htm [Accessed 01 Augustus 2009].

66
Appendix A

AXXO means quality case study

While doing my research one theory pointed out that some people
might believe on the source and it made me think about that.
Some research on the group called “AXXO” (capitalized) which is a
group responsible for releasing “Dvdrip”, reviewed to be popular in
between the pirated movie industry. The meaning for the “Dvdrip”
is an acronym for Dvd ripper which stands for a software that
convert the whole movie into a designed file size. This group is
known by releasing main stream movies with high quality
codification what results in a better image quality. Another
characteristic is that the group usually settled the size to be as big
to fit in a CD, which would be easier and more convenient to users
watch all in one medium rather than changing in the middle of the
experience. Other groups like FXG,FXM and KLAXXON are other
examples of known groups.

However using the Google Search Trends which is a tool that give a
time line with the number of search for those groups worldwide
shows that AXXO are losing rapidly popularity in spite of holding
more than double of the search of all groups together (vide figure
5). Also searching for AXXO at Torrentz shows that at least the first
20 listed movies they have being downloaded over 10,000 times
while the other do not reach 3,000 downloads [Torrentz.com,
2009]. It is interesting to see the general behaviour regards this
group, since they did catch the confidence of those that look for
pirated videos.

67
Figure 22 - AXXO, FXM, FXG, KLAXXON

Appendix B

Radiohead case study

A curious case happened not long ago when the British rock band
Radiohead announced their new album “In Rainbows”. This album
is particularly interesting because the band decided to distribute
the album through their website, using the price strategy where
fans would pay literally any amount. In other words anyone would
be able to get it even for free, or they could pay any amount for it,
everyone would have the same album with the same quality, no
difference between payers and non payers [Tyrangiel, 2007]. Turns
out that this experience resulted in some mixed points and some
really interesting aspects can be seeing that wasn’t expected
coming from an album that was freely distributed. An organization
that is specialized at measuring online traffic known called
comScore, reviewed the traffic during the period of 29 days. The
band’s website in the “In Rainbows” section, were visited by almost
1.2 million users where it is said that a good amount of users
downloaded the album through it. Around 62% of the users that
finishing downloading the album ended up paying nothing for the
album, while the remaining 38% paid an amount between 1 penny
and $20. The band was surprised that the average price paid for
those that have paid some something was $6. However if you sum

68
up all uses, the volunteered paid and those that did not payt, the
band received $2.62 per album. comScore’s marketing manager
Andrew Lipsman said that this experiment was a success even
though the price per album was sold below the market average.
The reasons for this is that Radiohead cut off the middleman, had
nearly no cost for distribution and the revenue per digital sold copy
is far greater than physical albums and it goes straight away to the
band rather than for the record labels, studios and so on. Also the
band enjoy other important and hard to measure benefits which
includes the possibility of increase of fans’ base since for then it is
a risk album to know a different band, therefore possible more
incoming generated from previous albums and concert tickets. The
initiative has a good impact with their fans base for allowing them
to volunteer paying the amount they believe is fare. The physical
album is also in sales at the same website, CDS, Vinyl editions also
suffered a positive effect with it. comScore claims that for every $1
pay voluntary, they sold $2 in “diskbox” [Reston, 2007].

The payments were also subdivided in 3 block, 17% paying

between $0.01 and $4.00, 12% paying between $8.01 and $12.01
which is the equivalent to any other album sold in other online
music store like iTunes, and 4% which decided to pay any amount
over $12.01 which is starts to get the average price of a physical
version. Even though this data is already impressive since many
has paid a good amount for the digital copy a more surprising
information is that at the first day the album was on sale at
Radiohead official website, the album was download illegally
around 240,000 times through BitTorrent website like
ThePiratebay, Mininova, TorrentSpy. The organization Big
Champagne which keeps tracking the online illegal traffic, reports
that the following days the album has been download with a rate of
100,000 daily. Supposedly the rate keeps at 100,000 daily, and as
reported by comScore that in 29 days the Band’s website has been
accessed by 1.2 million, barely in less than two weeks the number

69
of copies that infringes the copyrights would overtake the legal
downloads, even though the album could be bought by nothing.
This intriguing results shows that many users just download music
the way they believe it is the easier and faster way, after all, many
of those whose downloaded illegally already know those websites
and use it with some frequency. A criticism brought by Doug
Lichtman which is a lecture at the UCLA School of Law, two points,
the first is that as the Band did “give away for any price including
for free” people felt comfortable using illegal sources, the second is
that in order to buy the album legally the website required the user
address and post code and this might had turned off many users
[Greenberg, 2007].

70
Appendix C

Netflix and partnership with Xbox 360

Looking at innovate and add features for their console, Microsoft
announced earlier this year that would allow anyone based in the
US an application that would allow the video game, Xbox 360,
receive stream videos from Netflix. Microsoft states that this was a
success from August to November over 1.5 billion minutes were
watched. The entire user needed was a Gold Live membership,
which is also required to play online games and the Netflix
membership what did not required extra for the service. Microsoft
added that this partnership was important to make this console the
“best value in home entertainment”. This is one good example of
how to innovate and develop new services. Streaming video has
show growing market and is appreciated by users [Xbox.com,
2009].

71
Appendix D

Hulu growing market

Through the initiative from organizations as NBC, Fox, ABC
networks, built a website there is advertisement based and offer
for the US territory full TV series and movies from those networks.
It offers a reasonable quality for audio and image, and it in some
cases high definition can be found. This creative way to make
available online content showed results. The company audience
from April 2008 to April 2009 grew 490%, what now represents
373.3 million views. The numbers is really considerable. Also the
number of minutes that people stay in average also grew from 237
to 353 minutes (considering age between 25 and 34) at the same
period of April 2008 to April 2009. For sure the service show a
promising potential, numbers are rising and with the economical
downturn prime shows are available for free although it is still
limited to the US territory [Nielsen - Online, 2009].

72
Appendix E

BBC iPlayer in UK
The BBC iPlayer is a service that the organization unveiled at late
December of 2007. During first three weeks the company reported
that more than 3.5 million videos were served, through stream or
download. This catch up service offer nowadays almost all
programs broadcasted along the radio shows that the BBC
produced. All catalogue are kept online for at least 30 days where
anyone living in UK can enjoy free of charge [Highfield, 2008]. One
year after this later report the service showed consistency. Virgin
Media reported that last year their customers enjoyed more than
500 million videos where 20% (95 million) were coming from the
BBC iPlayer. December 2008 Virgin Media alone recorded that
more than 41 million videos were served by the iPlayer which is a
huge grow from the previous year. Rahul Chakkata comments the
company is pleased with the success of the iPlayer and claims that
due the organization is trying to expand the service for other form
that users can access them like Iphone, Android phones [Sweney,
2009].

73
Appendix F

DRM – Music and Games

DRM stands for Digital Rights Management, this piece of
technology were created to prevent the usage in computer not
authorized. Later with the Napster the need for this technology
speeded up, was possible to embed this technology in every music,
video and software. Itunes were offering the only music with DRM
and Amazon with their online music store introduced the non DRM
catalogue, all the music sold in Amazon were DRM free. Itunes are
still trying rolling out the feature across the store. The impact of
this technology is huge since it block the usage in none authorized
computers and also limits the number of copies that it can be
made, and not all digital music player are compatible it with.
However this is not as good situation to show the effects it has in
the consumers. In 2008 the company EA unveiled the really
expected game called Spore. The game could be acquired online
and physically.

The technology on that particular software limited the activation of

the game in three times, and it the game was uninstalled the
limitation would not be restored, and if you wanted to restore you
had to contact the company and ask them to do so. The game was
soon cracked and the illegally version was available online but with
a big bonuses no DRM. Soon users got really angry and started to
protest. The game is rated at Amazon.com with almost 3300
reviews, but over 2650 reviews rates the game in zero “stars”
[Amazon.com, 2009]. And most of them is regards the DRM not the
game.

Soon what people figure out was that enjoy the online feature it is
needed only the “CD Key” which comes when you buy it, and it is
possible to use the same key when playing with the pirated version

74
so the game would have no limitation and still have the exclusive
online features. From 1st September to 09 December 2008 the
same were downloaded around 171.000 times according to Big
Champagne which is a company that tracks information. They
claim that it is a record, so instead of preventing the piracy with
the DRM, EA had to face a furious crowed and a record breaker
pirated game [Greenberg, 2008].

Appendix G

Ethics Considerations form

Student’s name: Roberto Ramos Moreira Pires Carvalho
Registration number: 27002431

For all research involving other people as participants or

accessing personal data, the following must also be
completed:

Who are the Participants?

Please tick/give further details as appropriate:

Y/N/further details

Children under 18 N

Children in care N

Individuals with a learning disability N

Individuals suffering from dementia N

Prisoners N

Young offenders (16-21 years old) N

Individuals in Care Homes N

Elderly persons N

Individuals without legal capacity to N

consent

75
 Other Vulnerable Groups N

Specific Ethnic Groups N

Students Y

Staff N

2. Approximately how many participants did you recruit, and

how were they selected, and how were they invited to participate
in the study?

Seven participants were invited though informal conversation

through the phone. The requirement for this group was that the
participants had at least some knowledge regards internet
including some previous experience of how use computers for
leisure (watching and listening videos, games, social networks and
more). Another aspect was that just people over 18 years could be
part of this group. Just four of those invited ended up participating.

For the survey, was not restricted, the post on both forums were
open and anyone were welcome to answer it. At the post and the
survey itself, the participants could read clearly that the answers
would not be tracked neither the personal identification of each
volunteer.

3. Is there any link with the investigator (client, friend, etc.)? If

there is a link, detail what safeguards to preserve objectivity and to
prevent conflicts of interest were put in place?

Two of those participants are friends of mine, where the other two
were their friends. This helped because a better environment could
be created also some answers were personal enough that just in a
trustful environment was possible to reach. Also I put myself aside
and tried to not interfere with the debate.

76
Regards the survey no participants were connected directly as far I
am concern.

4. Please describe briefly what happened to the participants

(e.g., interviews, questionnaires, the anticipated nature or duration
of each). For interviews please outline any proposed topics that
were covered, when considering designing interview or
questionnaires etc what measures did you take to be ethical?

The meeting was at in a quiet coffee shop located in canter of

London. This environment was quiet so as an informal conversation
themes as piracy, sharing information and files, music and movie
industries were suggested. This meeting were surprisingly
contagious and which was expected to take 30 minutes extended
for 30 minutes more.

5. What risks, potential hazards, stress, discomfort or

inconvenience to participants may have been present? What steps
were taken to minimize any adverse impact of the research on
participants?

The focus group was designed to build the best and more
comfortable environment possible for every participant have time
and confidence to debate and express their opinion. Also as all four
participants new previously each other, it was easy to make the
meeting a easy environment for such sensitive topic.

6. Was written consent obtained? This is the normal

expectation, therefore if your response is that you did not obtain
written consent, please explain in detail.

No paper or any other kind of formal agreement or consent were

given or taken, the reason for that is that the topic is sensitive and
it is an illegal practice here in UK, and almost all the world. The
media publicize cases that authorities are prosecuting those that

77
do not follow the law. Therefore formal consent would imply in
stress from their perspective and would interfere on the research.
Although bullet points were written during the meeting.

7. Did you provide written information to participants indicating

the nature and purpose of the research, that their participation is
voluntary, that they may withdraw at any time, and providing
contact details for further information about the study? Please
provide a copy of any written information that you may have used.

This research was approached as an informal and the reason was

that I wanted to have the unprepared ideas from participants. And
giving papers and formal invitation with subjects and norms would
be unpractical.

8. Please indicate what steps were taken to safeguard the

anonymity and confidentiality of the participant’s records [whether
the records are of paper, tape recordings, video recordings...], and
confirm that the requirements of the Data Protection Acts will be
complied with.

The survey were hosted by a third party company which none of

participants neither me have access to. Also no form of
identification was required.

Regards the focus group, notes were made after the meeting
where their names and identities were changed and just identified
by one letter. Also I am aware that non form of identification will be
provided by me in order to keep their privacy.

Once you have submitted your dissertation, it will be reviewed by

the department’s ethics committee and your tutors.

78
Appendix H

Two sample t-Test – Two groups related regards piracy

supplier and usage frequency

Table 3 – Two Sample F-Test for Variances – Suppliers believe versus usage
frequency

F-Test Two-Sample for Variances

Trust Do not trust
Suppliers suppliers
Mean 18 6
Variance 156.5288462 65.90909091
Observations 53 12
df 52 11
F 2.374920424
P(F<=f) one-tail 0.060018216
F Critical one-tail 2.502805675

Table 4 – t-Tent: Two Sample Assuming Equal Variances –Suppliers believe

versus usage frequency

t-Test: Two-Sample Assuming Equal Variances

Trust Do not trust
Mean 18 6
Variance 156.5288462 65.90909091
Observations 53 12
Pooled Variance 140.7063492
Hypothesized Mean Difference 0
df 63
t Stat 3.16443572
P(T<=t) one-tail 0.00119648
t Critical one-tail 1.669402222
P(T<=t) two-tail 0.002392961
t Critical two-tail 1.998340522

79
Appendix I

Two sample t-Test

Table 5 – F-test Two Sample for Variances – Internet for social use related with
behaviour towards piracy

F-Test Two-Sample for Variances – Internet for social use related with
behaviour towards piracy

Those that use the internet for Those that use the internet something
social propose else other than social

Mean 7.413793103 7.277777778

Variance 6.036945813 8.949206349

Observations 29 36

df 28 35

F 0.674578904

P(F<=f) one-tail 0.143519581

F Critical one-tail 0.543077985

Table 6 – t-Test Two Sample Assuming Equal Variances – Internet for social use
related with behaviour towards piracy

t-Test: Two-Sample Assuming Equal Variances

Internet mainly for Do not use internet for Social

Social networks mainly
Mean 7.413793103 7.277777778
Variance 6.036945813 8.949206349
Observations 29 36
Pooled Variance 7.654868333
Hypothesized Mean Difference 0
df 63
t Stat 0.197021016
P(T<=t) one-tail 0.42222267
t Critical one-tail 1.669402222
P(T<=t) two-tail 0.844445339
t Critical two-tail 1.998340522

80
Appendix J

Survey questionnaire design

Consumer behaviour towards piracy

Hi there, my name is Roberto

And I believe that the consumer behaviour towards piracy has a lot
to do with the natural need of the humans to socialize. Therefore I
need as much response as possible to confirm my assumptions

Through the ethics that bind this study it is important to leave clear
that all data collected WILL NOT BE TRACKED NEITHER PEOPLE
IDENTIFICATION

Please after finishing just click "Submit"

For now I already thank you for your cooperation

Top of Form

01 - What's your gender?

Male

Female

02 - Which age category you belong to:

under 15

15-18

19-25

26-35

above 36

81
03 - Do you shop online?

Yes

No

04 - Do you buy Digital Music (MP3), Video, Software online?

Yes

No

05 - Which online store do you visit more often?

Itunes

Amazon.com

Steam

Other:

06 - How many hours do you spend on the internet weekly?

0 - 4 hours

4 - 14 hours

14-21 hours

over 21 hours

07 - When you are at home, what do you use the internet mainly
for?

Reading News

Social network- ie. Facebook, Orkut, Twitter, Digg, Forums

82
 Stream online videos and music, ie, YouTube, Vimeo, Hulu,
Revision3

Play games, ie Wow, Online Casinos, Diablo 2, Team Fortress

Online shopping

Other:

08 - What would be your second choice?

Reading News

Social network- ie. Facebook, Orkut, Twitter, Digg, Forums

Stream online videos and music, ie, YouTube, Vimeo, Hulu,

Revision3

Play games, ie Wow, Online Casinos, Diablo 2, Team Fortress

Online shopping

Other:

09 - Do you download pirated content? Just to reinforce NO DATA

WILL BE TRACKED NEITHER PEOPLE IDENTITY

Yes

No

I'm not sure if they are legal

10 - How often do you download pirated material? Answer just if

download pirated material

Daily

Twice a week

83
 Weekly

Monthly

Less than monthly

11 - From 1 to 10 - How much do you trust on your source of

pirated material? Answer just if you download pirated material

1 2 3 4 5 6 7 8 9 10

I don't I
trust trust

12 - Where do you usually download pirated material? Answer just

if download pirated material

BitTorrent searches, ie, ThePiratebay, Mininova, Private trackers

Edonkey, Gnutella

Usernet

Direct Download

Other:

13 - What's the reason that led you consume pirated material?

Answer just if you download pirated material

I believe that music, video and software are too expansive

I just want to test before buy the legal version

I feel safe downloading from the reliable source that I have

I don't know any legal alternative

Other:

84
14 - From 1 to 10 how bad do you feel after downloading pirated
material? Answer only if you download pirated material

1 2 3 4 5 6 7 8 9 10

Not bad at Really

all bad

15 - From 1 to 10 - How would you feel if someone tells you that

they have being downloading pirated content?

1 2 3 4 5 6 7 8 9 10

Ba Goo
d d

16 - From 1 to 10 How would you evaluate your computer skills?

1 2 3 4 5 6 7 8 9 10

Comforta
ble
enough to
Not
people
comforta
come and
ble using
ask my
computer
opinion
s
about
technolog
y

17 - If there was a Website where you could stream Video and

Audio would you use it instead of downloading it illegally?

Yes, I would change

No, I still want to have it on my computer

85
18 - Regards streaming video and music online, Would you pay for
the service and having it without ads or would you use the free and
ads based version? Answer only if you would trade piracy for online
video and audio streaming

Yes, I would pay and not having to watch ads

No, I prefer having it for free and watching ads

Other:

19 - From 1 to 10 - How do you classify your behaviour towards

piracy in general?

1 2 3 4 5 6 7 8 9 10

I have a I have a
negative positive
view view
towards towards
piracy piracy

20 - From 1 to 10 - Do you consider yourself as a pirate?

1 2 3 4 5 6 7 8 9 10

Yes, I
No I'm consume
not a more illegal
pirate material then
usual

Thank you for answering

If you feel like contacting me please do so at

roberto.carvalho@stu.ctlondon.ak.uk

86
87
Appendix K

Small sample took from the online survey.

04 - Do you buy
01 - What's 02 - Which age 03 - Do Digital Music 05 - Which online
your category you you shop (MP3), Video, store do you visit
gender? belong to: online? Software online? more often?
Male 19-25 Yes Yes Amazon.com
Male 19-25 No No n/a
Male 19-25 Yes No eBay
Male 19-25 Yes No ebay
Male 19-25 Yes Yes Steam
Female 19-25 Yes Yes Steam
Male 19-25 No No Amazon.com
Male 26-35 Yes No Amazon.com
Male 19-25 Yes No Steam
Female 26-35 Yes No ebay
Male 19-25 Yes No Steam
Male 19-25 Yes No mercado livre

06 - How
many hours 10 - How
do you 08 - What 09 - Do you often do you
spend on 07 - When you are at would be your download download
the internet home, what do you use second pirated pirated
weekly? the internet mainly for? choice? content? material?
14-21 hours All above Yes Weekly
Stream online
videos and
music, ie,
YouTube,
Vimeo, Hulu,
4 - 14 hours Reading News Revision3 Yes Daily
Social network-
Play games, ie Wow, ie. Facebook,
over 21 Online Casinos, Diablo Orkut, Twitter, Less than
hours 2, Team Fortress Digg, Forums Yes monthly
Play games, ie
Wow, Online
Casinos,
Diablo 2, Team
14-21 hours Reading News Fortress Yes Daily
Play games, ie Wow,
Online Casinos, Diablo
14-21 hours 2, Team Fortress pr0n Yes Daily
Play games, ie
Wow, Online
Casinos,
over 21 Diablo 2, Team
hours Reading News Fortress Yes Daily
over 21 Reading News Stream online Yes Twice a week
hours videos and
music, ie,

88
 YouTube,
Vimeo, Hulu,
Revision3
Social network-
ie. Facebook,
Orkut, Twitter,
14-21 hours download stuff Digg, Forums Yes Twice a week
Stream online
videos and
music, ie,
Play games, ie Wow, YouTube,
over 21 Online Casinos, Diablo Vimeo, Hulu,
hours 2, Team Fortress Revision3 Yes Daily
Downloading
over 21 movies/games/music
hours and socializing. Reading News Yes Daily
Stream online
videos and
music, ie,
Play games, ie Wow, YouTube,
over 21 Online Casinos, Diablo Vimeo, Hulu,
hours 2, Team Fortress Revision3 Yes Monthly
Social network-
Play games, ie Wow, ie. Facebook,
Online Casinos, Diablo Orkut, Twitter,
14-21 hours 2, Team Fortress Digg, Forums Yes Weekly

11 - From 1
to 10 - How
much do 13 - What's 14 - From 1 to
you trust 12 - Where do the reason 10 how bad do
on your you usually that led you you feel after
source of download consume downloading
pirated pirated pirated pirated
material? material? material? (13 – Subdivided) material?
BitTorrent I believe that
searchs, ie, music, video
ThePiratebay, and software
Mininova, are too
8 Private trackers expansive 3
BitTorrent I believe that
searchs, ie, music, video
ThePiratebay, and software
Mininova, are too
8 Private trackers expansive 3
BitTorrent I believe that
searchs, ie, music, video
ThePiratebay, and software
Mininova, are too
1 Private trackers expansive 1
BitTorrent I believe that
searchs, ie, music, video
ThePiratebay, and software I just want to test
Mininova, are too before buy the legal
10 Private trackers expansive version 1
10 BitTorrent Tired of 1
searchs, ie, buying gates
ThePiratebay, just to beat
Mininova, them in a

89
 matter of
Private trackers days.
BitTorrent
searchs, ie,
ThePiratebay, I don't know
Mininova, any legal
10 Private trackers alternative 1
BitTorrent I believe that
searchs, ie, music, video
ThePiratebay, and software
Mininova, are too
8 Private trackers expansive 1
BitTorrent I feel safe
searchs, ie, downloading
ThePiratebay, from the
Mininova, reliable source
10 Private trackers that I have 1
BitTorrent I believe that
searchs, ie, music, video
ThePiratebay, and software
Mininova, are too
10 Private trackers expansive 1
I believe that
music, video
and software
are too Comfortable
10 Private FTP expansive alternative 1
BitTorrent I believe that It's just easier not
searchs, ie, music, video having to go to the
ThePiratebay, and software store/cinema/video
Mininova, are too store to get what i
6 Private trackers expansive want 8
BitTorrent I believe that
searchs, ie, music, video
ThePiratebay, and software
Mininova, are too
8 Private trackers expansive 1

18 - Regards
streaming
video and
music
online,
15 - From 1 to 17 - If there Would you
10 - How was a Website pay for the 19 - From 1
would you feel 16 - From where you service and to 10 - How
if someone 1 to 10 could stream having it do you 20 - From
tells you that How Video and without ads classify 1 to 10 -
they have would you Audio would or would your Do you
being evaluate you use it you use the behaviour consider
downloading your instead of free and ads towards yourself
pirated computer downloading it based piracy in as a
content? skills? illegally? version? general? pirate?
No, I prefer
No, I still want having it for
to have it on my free and
3 8 computer watching ads 8 6
9 10 No, I still want No, I prefer 5 9
to have it on my having it for

90
 free and
computer watching ads
No, I prefer
No, I still want having it for
to have it on my free and
10 7 computer watching ads 10 10
No, I prefer
No, I still want having it for
to have it on my free and
10 10 computer watching ads 10 10
No, I still want
to have it on my
5 10 computer Neither 5 5
Yes, I would
pay and not
Yes, I would having to
10 10 change watch ads 5 1
No, I prefer
No, I still want having it for
to have it on my free and
5 8 computer watching ads 5 1
No, I prefer
No, I still want having it for
to have it on my free and
10 10 computer watching ads 10 10
Yes, I would
No, I still want pay and not
to have it on my having to
10 10 computer watch ads 10 10
No, I prefer
No, I still want having it for
to have it on my free and
6 10 computer watching ads 10 1
No, I prefer
having it for
Yes, I would free and
5 8 change watching ads 5 7
No, I prefer
No, I still want having it for
to have it on my free and
6 9 computer watching ads 6 1

91