Copyright Laws and Developing Countries

Reposted from Polity independent Blog.

There has been a major international debate in recent years about whether creative industries provide new opportunities for developing countries to benefit economically from their abundant cultural resources. Studies such as UNCTAD’s Creative Economy reports, as well as UNESCO’s Creative Economy 2013 report, have identified ways in which the creative industries offer new opportunities for culturally sustainable economic development.

I discuss these policies in my book Global Creative Industries. UNCTAD recommends understanding cultural policy in developing countries as a form of industry policy, where ‘cultural policy in its broad interpretation embraces aspects of a number of other areas of economic and social policy’ (UNCTAD 2008:173). They observe that:

A positive outlook for industrial policy in which creativity and innovation are important drivers of growth is well suited to the contemporary economic conditions of globalization and structural change (UNCTAD 2008: 174).

Yet there is a paradox in these policy strategies when we consider copyright and intellectual property laws in light of such proposals. They generally recommend strengthening copyright laws and better securing intellectual property rights (IPRs), in order to allow producers and distributors in the creative industries to develop more secure and sustainable business models. But the international extension of copyright is often seen as a mechanism through which the global copyright industries can exploit consumers in the developing world by charging prices for cultural products. They are also seen as being based on ‘old economy’business models unsuited to the world of ubiquitous and freely downloadable digital content.
It is in this context that media piracy, or the distribution and sale of illegally copied versions of copyrighted cultural products, has come to be seen as legitimate in the developing world. Piracy is commonly seen not as theft, but as street-level entrepreneurship in the informal economy, or as resistance to transnational media and entertainment conglomerates, using digital technologies to exercise a ‘power of the weak’ against Western multinationals.

It is not hard to see why the piracy of digital content may be seen as a form of counter-power in the face of inequalities in the global creative economy. Almost all developing nations are net importers of intellectual property. It is also hard to muster support for crackdowns on the sale of pirated copies of Avatar in the teeming cities of the developing world so that James Cameron can build more extensions to his Malibu mansion.

The case for acting to strengthen IPRs in developing nations has two elements. First, it is linked to the need to enhance the overall quality of institutions and forms of governance in order to achieve better and more equitable economic and cultural development. Compliance with global copyright regimes will encourage creative businesses to invest in developing economies, and hence improve production and distribution facilities and enable technology transfers to occur. In the language of New Institutional Economics, institutions matter, and governance frameworks in developing countries are of vital importance in shaping the performance of local creative industries, and the economy overall.
The second argument for enhancing IPRs in developing nations relates to opportunities for creative producers themselves. Widespread content piracy in developing countries has its major impacts, not upon global media conglomerates, but upon local creative producers, as it promotes a culture where not paying for creative works appears to be the norm, while transferring wealth to those operating illegally in the informal economy.

Since pirate distribution chains are well resourced, and local enforcement regimes are weak (and often administered by corrupt officials), piracy subverts development of sustainable local creative industries. This in turn makes investment in these industries, and support for local creative producers, less attractive. Moreover, it denies local creators access to secure revenue streams arising from legal commerce.

If we take the case of music as an example, the situation of musicians in developing countries often differs from that prevailing in the developed nations. In the latter case, live performance typically complements sales and royalties, and it therefore makes sense to offer ‘free’ product as a ‘hook’ to consumers.

By contrast, live performance is commonly the only secure source of income for musicians in developing countries. In the absence of actions to enable them to derive legitimate income from sales of their music, there are strong incentives for successful local musicians to relocate to places where they can make money from the sales of their music. As a result, there is a continuing exodus of creative talent, and the loss of local capacity to further develop the sector, as well as the lack of development of intra-regional and South-South trade.

Another example discussed in Global Creative Industries is the booming Nigerian film industry, commonly known as ‘Nollywood’. Its production models have been rooted in the informal economy, where low-budget films are distributed in pirated formats through street markets in major cities. While this has enabled an alternative global network to emerge, a tipping point has now been reached where producers need to make bigger-budget films in order to maintain their audiences and attract new ones, but lack the means to do so in the absence of more secure, legal and sustainable distribution arrangements.
There is thus a formalizing imperative, or a need to move beyond the low-cost, fly-by-night arrangements to viewing Nigerian film as a successful local creative industry.This would also require local state agencies to act, not only to reduce content piracy, but to develop industry policies for the sector that enable creative artists and businesses to develop appropriate production and distribution networks and sustainable business models across the value chain.

The moral justification for piracy has typically rested on the assumption that Western multinationals control production and distribution in order to exploit the consumers of the non-Western world. But where the cultural producers are themselves in the developing world, and the local creative industries require supportive institutions in order to receive returns for their risky investments, from consumers in both the developed and developing nations, then the copyright bargain is linked to the formalization of creative industries, and the future development of creative economies in the developing world.