Is piracy good. There are numerous arguments floating about how it is good or it is not good. Here is one more (?) perspective. Lets start with an example. A (say, Harry Potter and not the new one) book, would on an average cost about 250 INR (1 USD = about 42 INR). This is a substantial sum for any middle class family in India (or any developing nation). The point I make is that for a child in such a family, it would be impossible to ever read the book if it were not for piracy. There are no libraries, book lending clubs and chances are, that the school that the child goes to also does not have the resources to buy a new book.
Second lets take a look at DVD players. The cost of an original DVD would be anywhere in the reaches of 500 INR. The average, lower end player costs about 4000 odd INR. At this rate the player costs only about eight times the cost of an average DVD. For a little loss (barely discernible even in reasonably high end home theater systems) in quality, I can get 5 movies for 100 INR (pirated, obviously). If DVDs continued to be costly as they are today, DVD players would not get sold. Part of the reason DVD players itself get sold in places like India is because of piracy. (There is no research to prove this, but I have seen this in a substantial sample of reasonably well to do people).
So, coming to the argument as to why some piracy is good. This kind of low intensity piracy, creates a market where none existed before. It is true for both the child who wants to read a book and the DVD aficionado. They sample products that they would not have sampled, had the price been the original sticker price. The child grows up, reads about the evils of piracy and eventually buys a hard copy of the book. Most of the books on the roadside book shelves are usually best sellers at the best book stores as well and the clientele isnt the same. The DVD aficionado watches pirated movies and finally buys the original of those selected movies he likes. People who listen to mp3's, usually buy the original CDs of the better songs. It is not true of everybody everytime, but piracy does help introduce customers to a product and increases sampling. As people move up the income chain and education, they also realise that piracy is, well, not the right thing to do. Thus pirates and legitimate manufacturers cater to two distinct spectrum of customers with only a slight overlap. Within certain limits, pirates may actually be doing the manufacturer a good turn.
Again, duplication of, say, electronic goods, drugs or copying designs of cars to provide an inferior quality is a great thing to do. Copying a design cannot be excused and it is not an excuse for expanding the market, even though, in a broad sense they would still cater to two different ends of the market. That type of piracy, amounts to stealing. (So, am I saying stealing is a bad idea, but small leakages are permitted? Well, almost.)
In India local audio CDs used to cost about INR 300 when they were introduced. Piracy thrived. Price points went down slowly and now they usually cost about INR 99. A newly release audio casette would cost about 55 INR. More people today, tend to pick up the CD than the cassette. CDs of older movies (even hits) cost about INR 42 on an average. Lower priced editions of books are available for sale in India/Lanka/Nepal etc. This is the route to eliminate piracy. Fortune can be made at various levels in the pyramid. If companies dont, pirates will.
Therefore some types of piracy and some amount of it is actually good (not that it can be killed completely by any means, only organised piracy can be curbed to a certain extent, which it must). Besides if I can get DVDs for 20 rupees, why does the manufacturer need to sell it at a super premium rate? Ceteris Paribus, if a manufacturer sold a million CDs at 200 rupees each, he can sell a billion at 20 rupees each, cant he?
Update: Some traditional downloading myths are being challenged here in a new research. It says that
...The research clearly shows that music fans who break piracy laws are highly valuable customers," said Paul Brindley, director of The Leading Question.
"It also points out that they are eager to adopt legitimate music services in the future."
"There's a myth that all illegal downloaders are mercenaries hell-bent on breaking the law in pursuit of free music."
Thats some food for thought.