Digital Piracy: An Integrated Theoretical Approach 1611630274, 9781611630275

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Digital Piracy | AN INTEGRATED THEORETICAL APPROACH

E. Higgins ne D. Marcum

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Digital Piracy

Digitized by the Internet Archive in 2023 with funding from Kahle/Austin Foundation

https://archive.org/details/digitalpiracyintOO000higg

Digital Piracy An Integrated Theoretical Approach

George E. Higgins Catherine D. Marcum

CAROLINA ACADEMIC PRESS Durham, North Carolina

Copyright © 2011 Carolina Academic Press All Rights Reserved

Library of Congress Cataloging-in-Publication Data Higgins, George E. Digital piracy : an integrated theoretical approach / George E. Higgins and Catherine D. Marcum.

p. cm. Includes bibliographical references and index. ISBN 978-1-61163-027-5 (alk. paper) 1. Computer crimes. 2. Piracy (Copyright) I. Marcum, Catherine Davis, 1980- II. Title. HV6773.H543 2011 364.16'62--dc23

2011031382

CAROLINA ACADEMIC PRESS 700 Kent Street

Durham, North Carolina 27701 Telephone (919) 489-7486 Fax (919) 493-5668

www.cap-press.com

Printed in the United States of America

This book is dedicated to my family. George E. Higgins

This book is dedicated to my husband, Jeff, and my son, Drew.

Thank you for being a constant stream of support for all my endeavors. I love you both very much. Catherine D. Marcum

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Contents List of Figures

xi

Preface

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Authors

Xv

Chapter 1 * Introduction Data Sources on Crime and Piracy Limitations of the Data on Piracy

Plan for the Book

3 4 6 7

Chapter 2 * Nature of Digital Piracy The Characteristics of Digital Piracy Digital Piracy Environment The Requirements and Conditions to Perform Digital Piracy The Benefits of Digital Piracy American Legal Statutes about Digital Piracy Trends of Piracy Definition of Digital Piracy Trends

13 14 14 18 18 19

Chapter 3 * Theoretical Explanations of Digital Piracy in Various Disciplines Human Beings Theoretical Developments Business, Information Technology, and Business Ethics Economics Criminology

23 25 26 26 30 34

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CONTENTS

Software Piracy

39

Business, Information Technology, and Business Ethics

39

Ethical Models Economics Criminology Music Piracy Economics

40 4] 43 44 44

Criminology

47

Movie Piracy

49

Economics

49

Criminology Conclusion

51 52

Chapter 4 + An Integrated Theoretical Model of Digital Piracy 53 Review of Theories to Explain Digital Piracy 54 Self-Control Theory 54 Social Learning Theory 55 An Integrated Model of Digital Piracy 56 Effects of Sex 61 Self-Control Theory 62 Social Learning Theory 62 Intentions 63 Summary of Effects of Sex 63 Effects of Race/Ethnicity 64

Chapter 5 + Testing the Theory

.

Theoretical Test of the Integrated Theory Methodologies to Examine the Integrated Theory of Digital Piracy Qualitative Research Methods Quantitative Research Methods

Populations for Testing the Theory Chapter 6 * Policy Implications Intentions Proactive

67 68 Al ral 72

75 VW Wa 77

CONTENTS

Reactive Self-Control Proactive Reactive

Social Learning Proactive Reactive Conclusion References Index

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List of Figures Chapter 2 Figure 2.1 Figure 2.2 Figure 2.3 Figure 2.4

College College College College

Student Faculty Student Student

Software Piracy. Software Piracy. Music Piracy. Movie Piracy.

Chapter 4 Figure 4.1 Theoretical Model of Digital Piracy.

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Preface Our primary goal with this book is to examine and understand pirates of digital media by identifying the factors associated with their involvement in piracy. In order to provide the reader with a full comprehension of this phenomenon, we have provided previous explanations of the behavior across different literatures, as well as our own theoretical explanations. It is the hope of the authors that linking these separate philosophies and risk factors into one theoretical model will allow us to better develop policy to reduce instances of piracy among students, as well as improve investigation and prosecution of these crimes in the future.

xiii

Authors George E. Higgins is an Associate Professor in the Department of Justice Administration at the University of Louisville. He received his Ph.D. in Criminology from Indiana University of Pennsylvania in 2001. Dr. Higgins has won numerous awards including The William I Simon/Anderson Outstanding Faculty Paper award, Coramae Richey Mann Leadership Award, and ACJS Outstanding Mentor Award. He has published more than 100 journal articles, and

his most recent publications appear or are forthcoming in Journal of Criminal Justice, Criminal Justice and Behavior, Deviant Behav-

ior, International Journal of Cyber Criminology, and Youth and Society. Catherine D. Marcum is an assistant professor of Justice Stud-

ies in the Political Science Department at Georgia Southern University. Her current research interests include cyber crime offending and victimization, sexual offending and victimization, and correctional

issues. Her most recent publications are in the Journal of Criminal Justice, Deviant Behavior, Policing, Criminal Justice Review, and American Journal of Criminal Justice.

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Digital Piracy

Chapter 1

Introduction

The rise and development of the Internet has had an important influence on the types of criminal activity that may take place in society (Adler & Adler, 2006; Wall, 2005). The criminal activity has

been termed cybercrime. The criminal behavior that takes place using the Internet is varied. The behaviors include, but are not exclusive to, piracy, sexual activity, and fraud. Each of these behaviors has attracted considerable public and scholarly interest since 2000 (Hinduja & Patchin, 2010; Holt & Lampke,

2009; Holt &

Bossler, 2009). Some commentators have argued that the activities that take place are merely the same as activities in the non-cyber world. The Internet provides an individual wanting to perform a criminal behavior with the means or setting to do so without being detected. A reasonably computer savvy individual may be able to use aliases to disguise their postings, responses, or identities allowing them to appear and disappear at an instant. While the criminal behaviors may resemble those of the non-cyber world, the Internet (combined with some reasonable computer skills) allows individu-

als to hide their trails from law enforcement or operate from remote locations, avoiding national jurisdictions.

Our primary goal with this book is to examine and understand pirates of digital media by identifying the factors associated with their involvement in piracy. We will examine piracy and explanations from multiple disciplines. To understand piracy better, we will merge economic, sociological, and information technology/ computer science theories of piracy with the more traditional criminological literature. During the past ten years, research has moved away from purely theoretical focus on software piracy to empirically focused theory tests from the disciplines mentioned 3

4

1 - INTRODUCTION

above, with a focus on software,

music,

and movies.

This ap-

proach will allow us to examine the risk factors associated with piracy as offenders, and to propose a theoretical framework that links the separate philosophies and risk factors into a theoretical model for understanding piracy. This will allow us to develop or enrich policy to reduce instances of piracy among students. To the best of our knowledge,

no single work has examined how

these different disciplines contribute risk factors to understanding piracy. Thus, we explore the following questions to provide as complete an examination and understanding of piracy as possible: 1. 2.

What is the prevalence of various forms of piracy? What are the risk factors associated with piracy? What are the independent and cumulative effects of these risk factors?

While it may seem that these questions would be straightforward, a number of key issues will be addressed to supply the completeness that we are seeking. We will provide a definition of piracy. Often, definitions of piracy are rather controversial because of differing philosophical stances toward the behavior. For instance, some may not see this behavior as illegal while others see it as deviant. Definitions of piracy usually reflect the latter philosophical stance. We will also consider the geographical parameters of piracy legislation. The legality of piracy in the United States is different from the legal issues that are germane in other nations; thus, jurisdictional issues as well as definitional issues will be ad-

dressed to reflect that we are focused on American laws. Data issues will be addressed.

Data Sources on Crime and Piracy To appreciate piracy, considering the tion about it is necessary. Later we will to data on piracy in more detail, but we to review some of the main sources of

data sources of informadiscuss issues pertaining believe that it is relevant information about crime

1 - INTRODUCTION

in general. Uniform Crime Reports Federal Bureau of Investigation (FBI) formation about crime in the United ment, in the United States, provides about crimes that are known

5

(UCR) maintained by the provides the most cited inStates. Local law enforcethe FBI with information

to the police, arrests, and crimes

cleared by arrest, and are useful for describing offenders and changes in offending. . The data contained in the UCR may be used in at least two different ways. First, the age of the offender may be relevant —juveniles or adults. Second, the UCR data affords us the opportunity to review the data as rates. Rates are particularly useful because they provide an opportunity to understand the proportion of the population that has been arrested and whether this is higher or lower at a particular time. The use of the UCR in this form must come with caution because low early rates may make small changes seem much larger. In any event, it could be prudent to explore the UCR data for the number of piracy incidents. The UCR also provides some information about clearance rates. Clearance rates are the number of crimes that are solved or cleared by arrest rather than the number of offenders arrested for a crime. This may be an important issue because this could provide more information about the types of piracy that are performed. The National Crime Victimization Survey (NCVS) is another source of data on the prevalence, frequency, and types of crime in the United States. The NCVS is a nationally representative survey of households that has been used to compare statistics on crime from other data sources like the UCR. Because the NCVS surveys ask about the experiences of a victim, they provide information about crime that has not been reported to the police. Self-reports have been a mainstay in criminology since Short and Nye’s (1958) influential work. Self-reports provide another important element of data that is not present from the UCR or the NCVS. This type of data captures offenses that are not necessarily known to law enforcement and may not be asked in the NCVS. Self-report studies may be cross-sectional or longitudinal. Crosssectional studies are studies wherein respondents are asked to pro-

6

1 - INTRODUCTION

vide information once; longitudinal studies are those wherein re-

spondents are asked to provide information multiple times. Whether the study is cross-sectional or longitudinal, the data need to be representative so as to make generalizable statements.

Limitations of the Data on Piracy Up to this point, the data sources discussed have been about crime in general. Here we will discuss each of the limitations of these data sources in the context of piracy, and propose some alternative data sources to gauge the prevalence of piracy. First, we point out the problems with the UCR. Law enforcement statistics are generally provided in aggregate form, making understanding race/ethnicity, sex, and age difficult. According to the Federal Bureau of Investigation (2004), ethnicity is not always captured in their data. This means that the UCR may not provide disaggregated information about piracy. Not all of the criminal activity that takes place comes to the attention of law enforcement— known as the “dark figure of crime.” Thus, piracy may be a criminal activity that occurs as a part of the “dark figure of crime.” The issue of the “dark figure of crime” is exacerbated when one considers that not all law enforcement agencies participate. Thus, even if

the law enforcement agencies did have information about piracy, they may not share it with the FBI because of non-participation. Second, in the context of piracy, the NCVS does not offer any help. This survey addresses victimization issues. Piracy is not a behavior that is usually perpetrated against an individual rather it is perpetrated against entities such as a musical groups, software companies, or movie productions. These entities do not usually participate in the NCVS.

Third, self-report data also have limitations for examining and understanding piracy. While self-reports are common in criminology, some may object to their use. A common argument is that those who participate in the study may be less than forthright in their responses. Some researchers have found reliability and valid-

1 - INTRODUCTION

7

ity in self-report responses (Hindelang, Hirschi, & Weiss, 1981; Junger-Tas & Marshall, 1999). The reliability and validity may vary depending on the sample and measures that are being used in the study.

Unfortunately, to the best of our knowledge, no self-report study has been performed that captured nationally representative cross-sectional or longitudinal data on piracy, and our data suffers from the same fate. This suggests that our subsequent theory and results need to be validated by multiple tests. When this is needed, we will comment or reformulate our theory after sufficient evidence has been gathered. Given that the UCR, NCVS, and self-report studies are not able

to provide national data on piracy, we rely on data from for-profit and non-profit organizations. For instance, we use the Business Software Alliance (BSA). BSA is a for-profit organization that was developed with the mission to eradicate software piracy. Their focus has since shifted to provide information about multiple forms of piracy. In addition to BSA, we also use data that comes from the International Phonographic Federation and the Motion Picture Association. These organizations provide information about music and movie piracy. While these organizations provide some global information about piracy, these data also have limitations. These organizations have a constituent or stakeholder base. The individuals that belong to these organizations have an interest in their issues; thus, they have an incentive to inflate their esti-

mates of the different forms of piracy. Overall, the data from forprofits and non-profits provide as clear of an understanding as possible. We concede that other data sources may be available, but they have not been drawn to our attention. Our view is that we are providing a preliminary view of the trends on piracy.

Plan for the Book Our goal in writing this book is to provide an examination and understanding of piracy in American society in the 21st century.

8

1 - INTRODUCTION

We are constantly bombarded with different forms cybercrime ranging from piracy to fraud. The interest of this book is the examination of the extent to which common myths and stereotypes describe the nature of piracy. To accomplish these objectives, we have organized the book in the following manner. In Chapter 2, we present an introduction to the concept of digital piracy, which results in a working definition. We then present a review of the literature that provides an outline of the extent of piracy. We emphasize the major forms of piracy-software, music, and movies—in this chapter. In the conclusion, we high-

light the issue that the problem appears to be present, but theory is necessary to understand the issue. Chapter 3 will provide a discussion of the business, economic,

criminological, and sociological theories that have been used to understand digital piracy. Throughout this chapter, we outline the theoretical underpinnings and empirical results of studies of these theories in the context of software, music, and movies. In

the conclusion, we highlight the necessity of a unified theory that brings together the risk factors from the different perspectives. In Chapter 4, we develop a general theory to explain the different forms of digital piracy. The purpose of this theory is to outline and model the risk factors for performing piracy. In other words, we bring together in a rational way the risk factors that may be used to explain the different forms of piracy. Further, we outline specific testable propositions of this theory for all individuals and by gender and race/ethnicity. Chapter 5 provides an outline of the proper types of data that are necessary to test our theory. We outline the specific types of data collection methods that would provide provocative results that may be used to reduce instances of this behavior. Further, we

provide clear guidelines for measuring the concepts of our theory. Finally, we use this chapter to provide researchers with some indications of the analytical techniques that may be used to evaluate our theory. In Chapter 6, we review potential policy responses to piracy. The public policy implications are driven by theory and not from

1 - INTRODUCTION

9

technical devices to reduce the behavior although developers may wish to consider our theory when developing devices to reduce their behavior. In summary, this book is designed to perform a number of tasks. First, the book is designed to provide information about the extent of digital piracy. Second, the book provides information about the common risk factors of digital piracy. Third, the book advances a general theory that explains digital piracy. Fourth, the book provides an outline of the data collection meth-

ods. Fifth, the book provides an outline of the policy responses that are based on the theory.

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Chapter 2

Nature of Digital Piracy In this chapter, we follow the lead of Gottfredson and Hirschi (1990) by providing an overview of the nature of Internet digital piracy (known from this point forward as digital piracy). This includes the general characteristics, requirements, and conditions that are necessary to perform the behavior. We review the American legal statutes and express how our definition of digital piracy uses these statutes for a foundation but is not reliant on them.

From this explanation, we are led to a formal

definition of digital piracy that encompasses the characteristics, requirements, and conditions necessary to perform the behavior. We then shift to provide an understanding of the statistical trends of the three predominant forms of digital piracy: software, music, and movies. Our foray into this area is guided by a

series of questions:

1.

What are the characteristics of digital piracy?

2.

What are the requirements and conditions that are necessary for digital piracy to occur?

3.

What are the potential benefits of digital piracy?

4,

What are the American legal statutes that are in place to reduce instances of digital piracy?

5.

What is the formal definition of digital piracy that will be used in this book?

6.

Finally, what are some of the statistical trends of digital piracy?

12

2 - NATURE OF DIGITAL PIRACY

The Characteristics of Digital Piracy Here we address the question: what are the characteristics of digital piracy? The public may be easily misled by instances of large amounts of digital piracy occurring and making headlines. Some newspaper outlets are very eager to discuss an elderly grandmother or pre-teen being prosecuted for digital piracy or a university being fined for their unknowing role in digital piracy. In reality, large amounts of digital piracy do not frequently occur, but are more mundane. We revisit this later in the chapter. Here,

we discuss the general environment in which digital piracy takes place and the possibility for spatial differences. We also discuss the issue that little to no planning is necessary, very few consequences exist, and the behavior is very gratifying for the offender. We begin by reviewing the environment in which digital piracy occurs most commonly.

Digital Piracy Environment According to most reports from trade, non-profit, and forprofit organizations, the vast majority of digital piracy occurs over the Internet. Originated as a proposal by J.C.R. Licklider in the early 1960s of an interconnected network of computers to trade information (Licklider & Clark, 1962, as cited in Leiner et

al., 2003), the Internet is now an internationally utilized innovation allowing users to socialize with peers, perform research, and plan family vacations. Moreover, the Internet allows users to buy, sell, and trade information, both legally and illegally. While many users legitimately pay for the material they access online via this “Galactic Network” of information, the easy accessibility of this product increases the availability of materials to easily pirate with a low likelihood of detection. The use of the Internet provides pirates and potential pirates with an anonymous and potentially confidential environment to perform the behavior. This affords pirates the opportunity to perform digital piracy in several different arenas and locations.

2 - NATURE OF DIGITAL PIRACY

13

Researchers have shown that digital piracy does not have to occur in the same location (Hinduja, 2003). In fact, many of the instances of digital piracy begin in one city and end up in another city, state, or country. This makes digital piracy difficult, but not impossible, to track and police. The advent of other technologies has exacerbated digital piracy. For instance, the development of the peer-to-peer network has provided pirates and potential pirates a venue to post and retrieve digital media. In addition, the development of the MP3 player has provided individuals with a desire for music and movies. Overall, these characteristics of digital piracy have significance for explanatory questions. They show that digital piracy is a behavior that individuals may want to perform and multiple locations on the Internet allow potential pirates to avoid detection.

The Requirements and Conditions to Perform Digital Piracy In this section, we address the question: what are the requirements and conditions for performing digital piracy? Digital piracy has some requirements for individuals performing it. The location of the crime may vary, given the use of the Internet. Further, digital piracy is relatively easy and simple to perform, requiring only minimal computer literacy and not substantial amounts of effort, planning, preparation, or skill. This is not to deny that some digital media may be protected by sophisticated forms of security that do require effort, planning, preparation, or skill. On the other hand, the vast majority of digital media does not require these components. Further, the victims of piracy (e.g., actors, musicians, or software producers) are unknown or

not thought about; thus, the digital piracy does not require knowledge of them.

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2 - NATURE OF DIGITAL PIRACY

The Benefits of Digital Piracy This section is guided by the discussion of the benefits of digital piracy. Researchers have argued that criminal behavior does not always provide the desired outcome for the offender. The desired effect does not occur because the attempts of criminal behavior often fail. This is not the case with digital piracy. Rarely will individuals be unsuccessful performing digital piracy. For instance, Higgins (2007) showed that individuals pirate because they value the media that they are pirating. By valuing the media, a pirate will be driven to seek this media out. The immediate gratification that comes from acquiring the media is likely to produce feelings that make future piracy a certainty. From these arguments, a preliminary profile of a pirate is becoming apparent. This is someone who uses the Internet, and may or may not have minimal computer literacy. The pirate will value the digital media that they are seeking. Thus, a legal statute is not going to provide this sort of insight about the pirate, but the statutes are necessary in making the behavior against the law.

American Legal Statutes about Digital Piracy Our goal in this section is to address the question: what are the American legal statutes that are designed to address digital piracy? To begin to outline and describe the American legal statutes on digital piracy, we have to begin with a definition of intellectual property. A generic definition of intellectual property is the original expression of ideas in words, sounds, or images that may be in books, recordings (i.e., Cassette Tapes, Vinyl Records, and CDs), or films (Luckenbill & Miller, 1998). This definition is im-

portant because all digital media that will be considered in this book is really a form of intellectual property. In addition, the definition provides a natural flow to legislation. In the United States of America, intellectual property may be disaggregated into two categories. The first category reflects industrial property. Industrial property includes inventions, trademarks, trade secrets, patents, and industrial design. This is not

2 - NATURE OF DIGITAL PIRACY

15

the direct focus of this book. The second category is copyright, which is the focus of this book. We begin by reviewing the Copyright Act of 1976. Then, we move to the 1992 Amendment of the Copyright Act. This is followed by a presentation of the No Electronic Theft Act.

Copyright Act of 1976 ‘Copyright law is designed to cover original works. The original works may come from several different mediums: literature; musical, cinematic, scientific, and artistic works; and sound recordings (17 U.S.C.$ 102, 1994). Violations of copyright laws (i.e., piracy)

may result in harsh penalties that include prison (up to 5 years) and fines that could easily be in the millions of dollars. The advancement of technology, specifically the Internet, has provided a new medium that original works may be developed for and distributed through. Copyright law covers software, music, and movies that were made for and distributed using the Internet. Koen and Im (1997) wrote that software was protected by the Copyright Act of 1976. This act provides the author of the software five mutually exclusive rights. First, the author has the right to reproduce the work.

Second, the author may adapt or make derivatives of the

work. Third, the author has the right to distribute the copies publicly. Fourth, the author has the right to perform the work publicly. Fifth, the author may display the copyrighted work. Koen and Im (1997) wrote that the Copyright Act provides the author these rights for their entire life plus 50 years if the author is a human and 75 to 100 years if the author is a corporation from the creation. While the Copyright Act may provide important rights, it has limits. First, the purchasers have the ability to make a backup copy or adapt the program for their own use. Second, from Section 107 of the Copyright Act, known

as the fair use doctrine,

software may be copied for teaching, research, and scholarship purposes without committing infringement. Violation of the Copyright Act may result in civil liability or criminal prosecution.

Civil liability for piracy provides a number of options under the Copyright Act of 1976. First, a temporary or permanent in-

16

2 - NATURE OF DIGITAL PIRACY

junction may be sought to stop copyright infringement. In order to receive an injunction,

four factors need to be met in some

combination. The case must have enough evidence to suggest that it will prevail on its merits. The plaintiff must demonstrate that irreparable harm will result if the injunction is not granted. The hardship of the plaintiff without the injunction must outweigh the hardship of the defendant. The public will be harmed with or without the injunction. Koen and Im (1997) argued that these factors are usually found in a piracy case. Second, the Act provides the court the power to impound. Much like a vehicle being impounded for some form of equipment violation or unpaid citations, computer systems that are used to perform piracy or store pirated material may be impounded. To clarify, the Copyright Act of 1976 provides the court with the power to seize the entire computer system on the day that the case is filed. Third, the Act provides the copyright holder the right to sue for damages. The damages may be statutory damages. That is, the damages may range between $500.00 to $20,000.00. These damages may be collected for each pirated program, but not for each instance of piracy. Finally, if the court finds that the piracy was a “willful” act the statutory damages may be increased to $100,000.00.

Section 506(a) of the copyright act provides the foundation for criminal liability for piracy. Specifically, individuals or corporations that pirate material may be criminally prosecuted for their piracy. Further, the section allows for a one-year prison sentence and a $250,000.00 fine.

Copyright Felony Act The Copyright Felony Act occurred in 1992 to amend the Copyright Act of 1976. The amendment was necessary to broaden the scope of the law to protect all copyright holders, and not just those that had recorded sound, movies, or software. The importance of this act is that it broadened the protections to all copyrights. Further, this Act spells out the limits of the law by describing the qualifications of a felony offense and the sanctions

2 - NATURE OF DIGITAL PIRACY

17

that may be used as punishment for the offenses. We begin by describing the qualifications of the offense to be a felony. The pirate needs to have reproduced or distributed at least ten pieces of unauthorized copies or phonographic records within 180 days; additionally, the pieces need to have a retail value of $2500.00. If these thresholds are not met the behavior is deemed a misdemeanor. To fit the qualifications of this Act, the government must show that copyright infringement has occurred, the behavior was performed intentionally, and the accused does not own the valid copyright for the material.

If the qualifications for a felony are met, a number of criminal sanctions may be used to punish these offenders. For instance, the Copyright Felony Act allows for a prison sentence up to five years. This only applies for a first offense. An individual that is convicted of multiple offenses may be sentenced to ten years in prison. This Act provides that individuals may be fined $250,000.00

or a $500,000.00

fine for organizations.

The civil

penalties may be multiplied to twice the gain from the offense.

No Electronic Theft Act The No Electronic Theft Act (NET ACT) is an important piece of copyright legislation involving computer technology and the Internet. The NET ACT was designed to close a persistent problem in United States criminal law concerning copyrights and copyright infringement. The NET ACT was enacted to criminalize the distribution of copied software over the Internet, regardless of profit. Interestingly, the NET ACT defined phonorecords as part of software. Therefore, the individuals prosecuted using this piece of legislation is not restricted to software distribution, but also phonorecordings (i.e., music and movies). Under the NET ACT, the reproduction or distribution of the software by electronic means (i.e., the Internet)

of 1 or more copies that have a retail value of $1,000 during a 180day period may be subjected to a series of punishments. The punishments from this ACT vary for instances of piracy from this ACT. Prison time may be attached to a conviction of copyright infringement. For instance, if the offense consists of the

18

2 - NATURE OF DIGITAL PIRACY

reproduction or distribution of 10 or more copies or phone records of 1 or more copyrighted works that have a retail value of $2,500.00 or more, the individual may be sentenced to prison for

up to three years given that it is a first offense. If it is a second offense or more, the sentence may be up to six years. If these conditions do not apply and the offense is deemed a misdemeanor, the individual may sentenced to one year in jail or be subject to a fine. Overall, these Acts demonstrate that piracy is a criminal act. The Acts define the types of behaviors that are necessary for a crime to qualify as a felony or a misdemeanor. The Acts provide civil and criminal penalties. Thus, under American law, piracy is an illegal behavior. Unfortunately, the laws are difficult, but not impossible, to enforce. This partially explains why acts of piracy do not appear in the UCR. Using data collected from a random sample of United States police departments that enforce laws for areas over 50,000 people, we found that the police departments had made a small amount of piracy arrests in 2007 and 2008 (Marcum,

Higgins, Freiburger, & Ricketts, 2010). While arrests

do not always translate into successful prosecutions, the arrests indicate that the copyright laws are being enforced at a small level.

Trends of Piracy At this point, piracy is defined from a statutory perspective. This means that organizations (i.e., interest group associations and the criminal justice system) have only a legal definition to use to assess the trends of this behavior. Given the difficulty in enforcing the laws and keeping records of this enforcement, the trends of digital piracy from this perspective come from interest group associations. We use these figures under the assumption that they contain some bias, but in the absence of official statis-

tics, we use them to demonstrate that the behavior occurs.

Definition of Digital Piracy The definition of digital piracy is elusive. The characteristics, requirements and conditions, and benefits are important factors for

2 - NATURE OF DIGITAL PIRACY

19)

defining digital piracy. In addition, it is important to pay homage to the American legal statutes when defining digital piracy. Early digital piracy research focused on individual practices. For instance, researchers have argued that software piracy was defined as the illegal duplication of copyrighted computer software (Koen & Im, 1997; Straub & Collins, 1990). This definition is insufficient

because it does not encompass music or movies, which are important and popular forms of digital piracy. Ergo, the definition of software piracy does not take into account the other forms of digital media. Thus, we believe that Gopal et al. (2004) provided a strong foundation with their definition of digital piracy. Gopal et al. (2004) argued that digital piracy is the illegal act of copying digital goods, software, digital documents, digital audio (including music and voice), and digital video for any reason other than to create a backup without explicit permission and compensation to the copyright holder. This definition takes into account the American legal statutes by deeming the action illegal. The characteristics of the piracy are defined by the different forms of digital media. From this definition, it is instructive to examine some of the trends

that have come from the literature on digital piracy.

Trends In this section, we address the question: what are the trends of digital piracy? To address the trends of digital piracy, we will examine the different forms of digital piracy. The trends of digital piracy are somewhat difficult to track. The difficulty comes from capturing the proper data for analysis. As mentioned in Chapter 1, the use of official data sources is not possible. Thus, we must

rely on interest groups for data sources. The problem that comes from the interest groups is that they may inflate the occurrence of some of the trends. Further, interest groups’ agendas change. These agendas mean that trends that were important in 2003 may not be important

in 2007.

In addition,

some

of the interest

groups may not publish their trend research. Regardless of the problems with the interest group data, we believe that it is in-

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structive to provide some of the trends that they have presented. This allows some perspective on the extent of the problem. Given the sporadic nature of some of the interest groups, we provide data from the Business Software Alliance (BSA). Their re-

search on digital piracy has been the most consistent. Further, the BSA’s research covers the entire decade. This research is in concert with and serves as a foundation for academic research in the area. For instance, academic researchers focused on software piracy, showing that college students were more likely to perform this behavior (Hollinger, 1993; Hinduja, 2001). From this research, the BSA was able to provide information on collegiate student and faculty software piracy patterns in 2003-2007. Figure 2.1 shows that software piracy for college students declines from 2003 to 2007. The percentage of software piracy starts at 68 percent and drops to 55 percent. This could be a result of college students switching from software piracy to other forms of piracy. The drop may be because this is a period when a large amount of software came preloaded on computers, eliminating the need to pirate said software. While the drop in software piracy is interesting, the trends indicate that software piracy is being performed by more than 50 percent of college students. In our view, this is still problematic and needs to be understood and addressed. Figure 2.1 College Student Software Piracy. 80

70

60

of Percentage Occurrence 50

2003

————_

2005

2007

Student Software Piracy

2 - NATURE OF DIGITAL PIRACY

21

- Figure 2.2 presents the results entered from college faculty. The figure indicates that software piracy declined from 38 percent in 2003 to 29 percent in 2005. This drop may be attributed to several things. First, the faculty may be becoming accustomed to having preloaded software. Second, the faculty may be in an underproductive time where specialized software is not necessary. Although software piracy seems to drop, it appears that piracy seemed to increase from 29 percent in 2005 to 33 percent in 2007. The increase in piracy may be due to the need for specialized software. For instance, some statistical software is very expensive, and this could be an outgrowth of this problem. As with student software piracy, these are merely speculations. However, the trends indicate that software piracy is a problem with faculty. This means that others besides students are performing digital piracy.

Figure 2.2 College Faculty Software Piracy.

40

W (oa)

WwoO

of Percentage Occurrence N Nn

2003 —a—_

2005 2007 Faculty Software Piracy

According to the BSA, college students are likely to pirate music and movies. This has not gone without examination. Hinduja (2003) showed that college students indeed pirate music. Figure 2.3 shows the trends of music piracy from the BSA. The trends cover years 2003 and 2005. They are consistent, showing that 69 percent of the college students have pirated music. In the

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academic literature, researchers have supported this claim and indicated that music piracy does occur amongst college students (Higgins, Wilson, & Fell, 2005; Higgins, Fell, & Wilson, 2006; Holt & Bossler, 2009; Morris & Higgins, 2010). Several possibili-

ties may be used to explain the illicit downloading of music. The downloading of music may be because of improved internet connections as Hinduja (2003) suggested. The downloading may be because of the development of peer-to-peer networks. These networks allow individuals to upload and download music consistently without regulation. In addition, the downloading behavior may be because of the development and improvement of the MP3 player. This miniature version of the “walk-man” allows individuals to store many songs in small spaces for mobility. Figure 2.3 College Student Music Piracy.

80

70

of Percentage Occurrence

60

2003

————_

2005

Student Music Piracy

Figure 2.4 presents the trends for movie piracy. The trends show that movie piracy is increasing among college students. Twenty-six percent of the college students were pirating movies in 2003, but in 2005, 29 percent of the college students were pirating movies. This is an indication that the behavior is important among this age group. The problem is that it is increasing. The increase in digital piracy may be because internet connections are becoming faster making transfer easier.

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23

Figure 2.4 College Student Movie Piracy. 40

30

ee

of Percentage Occurrence

20 2003

——s——_

2005

Student Movie Piracy

The trends so far have focused on college students. This is because in the empirical literature the behavior has been localized to this group.

That is, academic researchers as well as interest

groups are able to study college students in very easy ways. As Payne and Chappelle (2009) presented, much may be learned from college students. This is the case here. We know that piracy is occurring and it is occurring among college students. While this is important and instructive, the piracy that takes place among other groups needs to be examined as well. For instance, the piracy that takes place among teenagers. Teenagers are of interest because they would provide an opportunity to examine developmental questions and hypotheses in the context of digital piracy. That is, they are our interest as long as it is possible to document that they are performing digital piracy. The BSA (Business Software Alliance, 2004) showed that software piracy occurred among 17 percent of teenagers and young adults. This part of digital piracy seems to be less relevant to the younger generation. This could be because a large amount of software that those in this age group would be interested is preloaded or is freeware. In addition to software piracy, a report from the BSA (Business Software Alliance, 2004) indicates that 53

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percent of the music piracy that takes place comes from teenagers and young adults that are below 18 years old. This is important as it shows that music piracy is not something that only occurs with college students. Recently, a study by Malin and Fowers (2009) supported the view that music piracy does occur among teenagers. The same is true with movie piracy. According to the BSA (2004), 22 percent of teenagers are engaging in movie piracy. Overall, digital piracy is occurring. The fact that we have to rely on interest group reports to illustrate digital piracy is occurring may introduce some problems in these trends. First, the trends may be over-inflated because the interest group needs to show a need for their services. Second, the trends may be under-

inflated because the information that the trends are based on may be faulty. Regardless, the academic research seems to support the issue that digital piracy is occurring and needs to be addressed. In the academic forum, researchers have used theory to understand the reasons why individuals may perform digital piracy. Throughout our discussion of the trends, we provided speculations about why the individuals may have performed digital piracy. In the next chapter, we cover the theoretical rationales that academics have proffered for understanding digital piracy.

Chapter 3

Theoretical Explanations of Digital Piracy in Various - Disciplines The issue of digital piracy has been investigated by researchers in the business, information technology, and business ethics litera-

tures. In this chapter, we will explore some of the theoretical developments that have taken place in these literatures. Given the large body of research that has taken place in these literatures, we believe that it is impossible to provide an exhaustive review of all of the theories that have been used and developed. However, we do

believe that it is important to provide a review of the dominant theories and additional developments.

In addition, we provide a

modest review of the literature in these areas. To provide this sort of review, we use the following questions to guide us through the literature and the maze of theoretical developments. First, what do the theorists assume about human beings in general? Second, what are the theoretical developments that have taken place? Third, how have the theories been applied to the different forms of piracy?

Human Beings In this section, we address the question: what do the theorists

assume about human beings? The theorists assume that human beings are rational. While the theorists may use a different language to express this assumption, the end result is an assumption that individuals will make decisions using the concepts of pleasure and pain. This assumption about humans has been attrib25

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uted to Jeremy Bentham. Pleasure is some sort of internal or external benefit that the individual seeks and desires. For Bentham, pain is some internal or external cost or harm that the individual does not desire. Bentham’s view, known as the hedonistic calculus, may be expressed as is “individuals are pleasure-seekers and pain-avoiders.” Thus, individuals will make decisions that are in their benefit and that will cause them the least amount of pain.

A number of theoretical developments have taken place in understanding digital piracy. All of these theories use rationality as a base assumption. Thus, individuals are seeking pleasure (i.e., digital media) and avoiding pain (i.e., going without the digital media). From this assumption, the theorists explain that the individual thinks about pleasure and pain. The following section will discuss the main theories utilized to explain digital piracy. This section will be separated by fields of study (Business, Information Technology, and Business Ethics; Economics; and Criminology) so

that the reader can understand the basis of the origin of the theory.

Theoretical Developments In the business, information technology, and business ethics literature, a number of theoretical developments have take place to understand digital piracy. All of these theories use rationality as a base assumption. Thus, individuals are seeking pleasure (i.e.,

digital media) and avoiding pain (i.e., going without the digital media). From this assumption, the theorists are explaining that the individual thinks about pleasure and pain.

Business, Information Technology, and

Business Ethics

|

Theory of Planned Behavior One of the predominant theories that researchers have used in the business and business ethics literature to understand digital piracy is the Theory of Planned Behavior (TPB). We acknowledge

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27

that some in the literature have used the Theory of Reasoned Action (TRA). According to Ajzen (1991), the TPB assumes researchers that use the TRA are not using the full TPB model. Regardless of TRA, the TPB suggests a social psychological theory, the main focus of which is motivational. Because it is a motivational theory, researchers using it are attempting to understand why individuals are seeking the pleasure of digital piracy. Ajzen (1991) makes three claims about this theory. First, the TPB is not only a motivational theory. It is also a social learning theory. The theory makes use of attitudes and perceptions of peer thoughts that are central to social learning theory. More discussion of social learning theory will come in a separate chapter of this book. Second,

the TPB is a complete theory. This means

that the

core concepts of the theory are most proximal to the individual’s decision to perform a behavior. To clarify, Ajzen (1991) argued that all other aspects of life influence behavior through the TPB measures. This means that as life evolves and other concepts become relevant, an individual will perceive pleasure or pain via the concepts from the TPB. Third, TPB is a dynamic theory. Thus, TPB will be able to explain behaviors as the decisions about pleasure or pain change. This means that pleasure or pain are not static features of life. A behavior that was not pleasurable early in life may be pleasurable later in life. This allows the TPB to be a mediator of other factors that may occur during the course of life. Ajzen (1991) relies on a number of theoretical concepts to develop the TPB. For instance, Ajzen (1991) uses a belief system (be-

havioral, normative, and control) to develop attitude, subjective norms,

and perceived behavioral control that influence behavior

through intentions to perform the behavior. Here, we clarify Ajzen’s (1991) definitions and links between these concepts. Behavioral beliefs are the perceived probabilities that a behavior will produce an outcome (Ajzen, 1991). It is possible that an individual may have several different forms of behavioral beliefs about an outcome, but only a few of these beliefs will be salient enough to

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be impact their attitudes. Behavioral beliefs are the chief contributor to an individual’s attitudes. Ajzen (1991) defined attitudes as the positive or negative evaluation of a behavior. The next set of beliefs is peer-oriented beliefs (i.e., normative

beliefs). In this instance, peers are admired others whose impressions are important to the individual. Normative beliefs are the perceived behavioral expectations of important referent groups (i.e., parents, peers, coworkers or other admired others) (Ajzen,

1991). Normative beliefs lead to subjective norms. Subjective norms are the perceptions of the pressures to perform particular behavior (Ajzen, 1991). Control beliefs are also important within Ajzen’s (1991) TPB model. Control beliefs are the perceived presences or absences of barriers that allow or impede behaviors to be performed (Ajzen, 1991). Control beliefs must combine with the perception of power to develop the perception of behavioral control. Perceived behavioral control (PBC) is an individual’s perception of their ability to perform a behavior (Ajzen, 1991). From this conception, Ajzen (1991) argued that the most proximal measure to behavior is intention. Intentions reflect an individual’s readiness to perform a behavior (Ajzen, 1991). An individual’s intention to perform a behavior is developed from attitudes, subjective norms,

and perceived behavioral control. We

should note that Ajzen (1991) argued that perceived behavioral control (PBC) may also have a direct link with behavior, but this

link would be weaker than intentions. A number of studies have been performed using this model across multiple disciplines. To summarize these studies we rely on meta-analyses. The meta-analytic studies show support for the general model. That is, the meta-analyses show that attitudes, subjective norms, and perceived behavioral controls do lead to intentions, and these intentions do lead to behavior (Armitage & Conner, 2001; Godin & Kok, 1996; Sutton,

1998). These meta-

analyses have shown that the TPB accounts for twenty to fortyone percent of the variance in behavior, suggesting that this is an important theory across disciplines.

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29

Ethical Models The business and information technology literatures have seen the development of several ethical theories that have been applied to digital piracy. In general, these theories come from Hunt and Vitell’s (1986) ethical theoretical premise. Taylor’s (1975, p. 1) defines ethics as “inquiry into the nature and grounds of morality where the term morality is taken to mean moral judgments, stan-

dards, and rules of conduct.” Hunt and Vitell (1986) are clear that

their theory is a positive theory that hinges on the pushes of an individual toward behavior, and their theory is based on describ-

ing decision-making in situations involving an ethical problem. To accomplish this goal, Hunt and Vitell (1986) rely on principles that come from deontological (i.e., a focus on specific behaviors of the individual) and teleological (i.e., a focus on the consequences of the actions of behaviors) ethics. In their view, both

forms of ethics are necessary to gain an understanding of the ethical judgments and ultimately their behaviors. For Hunt and Vitell (1986), deontological philosophy does not make the assumption that good or bad is a moral question, but that it focuses on the righteousness of the behavior and the best set of rules to live by. For Hunt and Vitell (1986), teleological ethics refers to the amount of good or bad that is inherent in the consequences of a behavior, and individuals should evaluate their behavior in terms

of whether the good or bad produces a better balance. Utilizing the deontological and teleological premises, Hunt and Vitell (1986) argued that researchers should focus on the

main propositions of their theory, rather than focusing on their entire theory. They argued that the theory might be divided into seven testable propositions. Hunt and Vitell (1986) emphasize the testable propositions because a substantial amount of the information necessary for a full test of their theory requires situational and cognitive information that is not always readily available. The first testable hypothesis is that in any ethical situation, judgment becomes a function of either deontological evaluation or teleological evaluation. The second testable hypothesis is that the intention to choose an alternative is a function of either deontolog-

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ical evaluation or teleological evaluation. The third testable hypothesis is that the likelihood of behavior is a result of behavioral intentions and situational constraints. The fourth hypothesis is that teleological evaluation is a function of the desirability of consequences, the probability of consequences, and the importance of stakeholders. The fifth testable hypothesis is that deontological evaluation is a function of deontological norms that are applied to several alternatives. The sixth testable hypothesis is that deontological norms are formed by personal experiences, organizational environment, industry environment, and cultural environment. The seventh testable hypothesis indicates that the importance of stakeholders is determined by the same environmental factors that generate deontological norms. This model appears to have a utilitarian focus that is central to the rational choice perspective. Hunt and Vitell (1986) argued that utilitarian philosophy is unsatisfactory for the development of their theory. They argued that this philosophy does not address specific issues of individual decision-making. Specifically, they propose three issues with this focus. First, utilitarian philosophy is unable to accurately determine whose good is maximized when making ethical decisions. Second, the utilitarian philosophy runs into measurement issues. Third, maximization of a total good will not accurately reflect the correct or morally correct solution and may be unjust in it. While these may have been issues when dealing with utilitarian philosophy in the context of ethics, criminologists have been able to overcome these issues in the context of individual decision-making. This point will be highlighted in a later chapter.

Economics Since digital piracy has become so prevalent with different forms of media, researchers in the field of economics have focused on understanding the effect of this illegal activity on the suppliers and consumers of these products. In regards to the economic history of pirated material, the cost of piracy is a function of the cost of obtaining the content (first-copy cost) and the cost

3 - THEORETICAL EXPLANATIONS OF DIGITAL PIRACY

of copy distribution

(per-copy distribution

31

cost) (Schechter,

Greenstadt, & Smith, 2003). Before consumers were able to ac-

cess writeable media, little effort was made to protect original material. The high resource cost associated with writing media was a deterrent to potential pirates. However, the inventions of the audiotape and videotape increased the ease of piracy for the average consumer, and producers of media reacted by increasing the extraction costs. For instance, some VCRs were built with technology that would not allow recording of copyrighted material. Furthermore, copyright barriers were increased to increase both the financial and legal costs of committing piracy. In the past few years, the ease of piracy has increased yet again as cheap digital media, content players, and the Internet have decreased the financial cost of piracy to almost nothing. A more recent definition of pirated materials is materials that are digital copies of original files (Peitz & Waelbroeck, 2003). The original has a certain quality g, and the copy may be of lower quality gc < q. When these two versions of a product are offered on the market, the given price of each is dependent on the consumers. If a pirated good is available on the market, this limits the monopoly of the original’s supplier. However, depending upon the availability of the copy, the pirated good can either reduce the firm’s profits or not. Belleflamme (2002) and Johnson (1985) confirmed this finding and also found that a firm can

react to piracy in three ways: 1) no reaction, if piracy is not perceived as a threat; 2) reduction of price of the original, to combat

the purchasing of the lower-cost copied good; or 3) a reaction that causes some consumers to obtain only the pirated material. Novos and Waldman

(1984) developed a model to demon-

strate how lower profits can decrease incentives to provide quality product. A consumer can purchase either an original or copy at cost [c + z(1 + x)], where c is the marginal cost of production, x is the copyright protection, and z is the additional cost of producing a copy. The value assigned to the product is dependent upon the quality, whether it be an original or a copy. Some consumers prefer an original product, while others may choose to copy due

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to the lower cost. However, if a firm’s price is low and the cost of

copying is unattractive to the consumer, then the original will most likely be purchased. This can be applied especially to the piracy of software, as those who choose to illegally copy software have to spend time and effort, not only to download and install files, but to make protections against detection of its use. Fur-

thermore, if the monopolist chooses to increase copyright protection on a product, then this in turn leads to an increase in quality of the product (if the cost of copying increases). In other words, some consumers will switch from the copy to the original due to the higher cost of copying and the better quality provided in the original (Bae & Choi, 2003).

Spending money on detection can also result in unexpected effects. For instance, Chen and Png (2002) determined that social

costs can appear if firms spend excess resources on detection. According to their model, the two types of consumers (those who never copy and those who do) identify the utility of illegal copying based on the detection probability. If a firm wants to attempt to eliminate copies, it can either lower its price of the original or spend additional resources that increase detection if they want to attempt to eliminate copies. The results of these two strategies are drastically different from a social point of view. A lower price of the original improves social welfare as less effort in copying is needed. However, while increasing detection is financially beneficial for the company if more consumers turn to the original, it is a social waste.

Mussa and Rosen (1978) developed a model of vertical product differentiation to investigate the effects of digital piracy. They stated that consumers have a demand and make the choice between original and copy, dependent upon their willingness to pay for the product. The Mussa-Rosen model asserts that those consumers with a high “taste parameter” are more likely to pay for a product than obtain an illegal copy. Belleflamme (2002), Yoon (2002) and Bae and Choi (2003) also utilize this view of con-

sumers, and state that a consumer obtains utility from purchasing an original. In fact, Bae and Choi (2003) show that more originals

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33

are sold even if copies are available, although they must be marked down to a lower price. There is utility from obtaining a copy, but there is also the factor of quality depreciation and the copying cost of the goods. This is often a deterrent for consumers. Copyright protection can also equate to a private cost to consumers (Yoon, 2002). Consumer utility is « 8g —c— x, where @ is the taste parameter, q is the quality of original, c is the copying cost and x is the additional cost that is a result of copyright protection. Yoon asserts that if the monopolist reacts positively to piracy by increasing the copyright protection of the original (priced at a uniform cost) to fully protect the product then the copies can be pushed out of the market. However, Bae and Choi (2003) found that if the originals are set at a type-dependent cost reliant on the amount of copyright protection, the demand for the originals decreases.

Most piracy studies focus on the end-user (e.g., Bae & Choi, 2006; Conner & Rumelt,

1991; Takeyama,

1994), while only a

few studies focus on the issue of commercial piracy (Banerjee, 2003; Poddar, 2005). Lu and Poddar (2009) examined commer-

cial piracy and the use of Intellectual Property Right (IPR) protections. They found that it is more profitable for the original producer to accommodate the commercial pirate if their IPR protections are weak, and deter the pirate if there are strong protections. Furthermore, there is a negative relationship between piracy and IPR protection Besen and Kirby (BK) (1989) developed a model that is often

used to analyze the theoretical determinants of piracy. The BK model follows the assumption that the demand for copies depends on the values placed on the originals and copies, as well as on the actual prices of the originals and copies. According to the BK model, the value a person places on the original or copy is a predictor of which one is purchased. Holm (2003) utilized the BK

model to measure copying behavior of music, games, and software for a sample of undergraduates. He found that most of the respondents felt piracy behavior was less serious than comparison offenses (i.e., shoplifting, academic cheating, and speeding), and

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that younger respondents and males were more likely to pirate material. Furthermore, there was a strong negative relationship between income and piracy rates. In other words, persons who make more money were less likely to download illegal materials.

Criminology Deterrence Theory Deterrence theory is often used by the United States criminal justice system to create policies and legislation to combat crime. This theory asserts that it is the threat of punishment that deters individuals from committing crime. Deterrence comes in two forms: specific and general. Specific deterrence occurs when an offender has been punished for a crime and is therefore deterred from committing the same offense due to fear of the known punishment. Conversely, general deterrence keeps the population as a whole from committing any form of criminal behavior because they have witnessed the penalties that were given to an offender (Wolfe, Higgins, & Marcum, 2008).

There are two forms of deterrence theory: classical and contemporary. Classical deterrence theory asserts that humans are rational beings who weigh participation in a behavior based on the pleasure versus pain they will encounter. An individual will be deterred from committing a crime due to three factors: certainty of detection, severity of the punishment, and the swiftness the punishment will be enacted. Contemporary deterrence theory is a modified version of classical deterrence theory as it also utilizes inhibition and motivation measures. Measures by Grasmick and Bursick (1990) (e.g. shame, guilt, and embarrassment) are used to understand the multitude of reasons individuals may be deterred. Guilt specifically has been shown to effectively reduce the participation in criminal behavior (Nagin & Pogarsky, 2004).

Differential Association and Social Learning One of the first major criminological theories based on social interaction was differential association theory (Sutherland,

1947;

3 - THEORETICAL EXPLANATIONS OF DIGITAL PIRACY

35)

Sutherland & Cressey, 1974). The theory asserts that an individual will commit crime only after exposure to definitions (beliefs) favorable to breaking the law. The most influential definitions are those from primary groups with which a person is intimately familiar, such as family and friends. Secondary groups, such as the government, are less powerful but still influential in some ways. While the theory has been revised in multiple ways, it has received empirical support when attempting to explain various types of criminal behavior, including digital piracy (Higgins, 2005; Higgins, Fell & Wilson, 2006; Hinduja, 2006; Skinner & Fream, 1997). For example, Gunter (2009) found support in a

survey of undergraduates (n = 541) at a mid-Atlantic university. Her findings revealed that peer behaviors and parental support were indicators of digital piracy. Other variables, such as income and place of residence were also predictive behaviors. Social learning theory (Akers, 1998), a direct descendent of differential association theory, has also been used and supported as a viable theory for examining digital piracy. Akers’ theory was built on Sutherland’s (1947) original definitions favorable to criminal behavior and exposure to criminal attitudes, as well as

imitation of behaviors and differential reinforcement. Akers has found support for his theory by demonstrating that deviant peer associations increase a person’s likelihood of participation in criminal behavior. Social learning theory has more recently been used and supported by digital piracy researchers (Higgins et al., 2006; Higgins, Wolfe, & Ricketts, 2009; Skinner & Fream,

1997;

Wolfe et al., 2009), in which a significant relationship was found between peer association and digital piracy (actual or scenariobased). For example, Higgins et al. (2009) used a sample of undergraduates (n = 353) to examine actual and intended digital piracy. They identified three separate classes and different individual profiles for each form of piracy. The actual piracy found more support for social learning differences, while scenario-based piracy demonstrated more support for self-control and social learning.

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Neutralization

Sykes and Matza (1957) developed a theory that asserted that deviants use neutralization techniques to rationalize feelings of guilt arising from criminal behavior. Their theory originated as a challenge to previous thinking that juveniles followed a different code of values than adults. Sykes and Matza argued that this was untrue and that delinquents followed the same values as the general population, but would occasionally “drift” from law abider to lawbreaker. These lawbreakers use various techniques to neutralize, or rationalize, their behavior.

The five techniques they identified are used by juveniles and adults to neutralize illegal behavior. Denial of responsibility is the refusal to accept responsibility for one’s behavior. Denial of injury is the belief that the person affected by the delinquent behavior was not harmed. The third technique builds on the previous as denial of victim, which accepts someone

as a victim but be-

lieves this person deserved the victimization. Next, condemnation of the condemners is used when the deviant perceives the victim as a hypocrite. The last technique is an appeal to higher loyalties, the rationalization that the behavior is necessary to please a person’s peers or social group (Sykes & Matza, 1957). Since the original release of the theory, further techniques of neutralization have been added by two other theorists. Klockars (1974) added the ledger technique, which asserts that an individ-

ual neutralizes a criminal behavior into acceptability performing good deeds. Coleman (1994) added three more techniques to neutralize criminal behavior. Denial of necessity of the law is used when the offender believes the law is used to control behavior and not for the greater good; therefore, there is no need to follow the law. Secondly, the claim “everyone else is doing it” is used when the individual feels as if there is a general disrespect for the law. Finally, entitlement is used by those who feel the behavior is justified due to another event that occurred in their life. After the release of these additional techniques, Copes (2003) as-

serted that despite the technique and associated theories, an of-

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37

fender must recognize that there was something wrong with his or her behavior in order to feel it necessary neutralize the act.

Self-Control Gottfredson and Hirschi (1990) developed the theory of low self-control and it has been used in multiple studies to understand digital piracy and its effects (Higgins, 2005; Higgins & Makin, 2004; Wolfe, Higgins, & Marcum, 2008). According to Hirschi and Gottfredson (1994), low self-control is “the ten-

dency to avoid acts whose long-term costs exceed their momentary advantages (p.3).” Furthermore, low self-control explains all forms of crime, as crime is behavior that pursues one’s own self-

interest. The theory asserts that individuals who are raised with ineffective parenting practices are likely to have low self-control. Ineffective parenting can include little to no emotional attachment between the parent and child, lack of supervision, and an inability to recognize deviant or criminal behavior. Gottfredson and Hirschi believe that persons with low self-control are very likely to participate in criminal behavior if the opportunity is available. According to Higgins, Wolfe, and Marcum (2008), digital piracy can be explained as a result of low self-control. Persons with low self-control are not likely to wait to purchase a copy of digital media, nor will they be deterred by the copyright agreement. Individuals who perform digital piracy may be drawn to the behavior because of the ease of the act, as well as the thrill of

illegally obtaining something without detection. Recently, Hirschi (2004) redefined low self-control as a per-

son’s inability to evaluate the consequences of his or her actions. In his opinion, self-control is not a personality trait or a predisposition to criminal behavior but the ability to weigh the range of potential benefits and costs of an action. In other words, it is a set

of inhibitions that a person takes with him or her no matter the time or place (Higgins, Wolfe, & Marcum,

2008). These inhibi-

tions are a result of the bonds we form (as laid out in social control theory): attachment, belief, commitment, and involvement.

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While this new definition has been tested only a few times, the original conception of self-control was found to be significantly related to digital piracy. Piquero and Bouffard (2007) analyzed the original definition of self-control as well as bonding and rational choice measures of self-control, and they determined that

all had a connection with crime. They operationalized self-control by asking students to provide a list of seven bad things and the likelihood of these things occurring. The scores were added together, with higher scores indicating more inhibitions. Triandis Model The last theory included in this chapter originates from the broad field of social science, an area in which criminal justice is often categorized. The Triandis model (1980) asserts that behavior

is determined by habit (what people normally do), affect (feelings toward a particular behavior), the expected consequences of the action, and intentions (what they would prefer to do). Triandis stated that the first three factors influence the intention of the participant,

which in turn influences the actual behavior. For example, Loch and Conger (1996) and Thong and Yap (1998) found that moral intention to pirate software was influenced by ethical judgment. Ramayah,

Ahmad,

Chin and Lo (2009) utilized the Triandis

model to test piracy behaviors using structural equation modeling. Using a sample of university students (n = 116), their results indicated that habit had a strong effect on Internet piracy behavior. Furthermore, affect and intention were found to be significant mediators of piracy behaviors. Based on their findings, Ramayah et al. (2009) suggested universities campaign against digital piracy by raising awareness of the consequences of the behavior. The theories are general theories that may be applied to multiple forms of behavior. To that end, many of the researchers of digital piracy have relied on some version of these theories to provide some exploration or understanding of digital piracy. The empirical efficacy of these theories and the modified versions of these theories will be presented next in the context of three different forms of media, where applicable: software, music, and movies.

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39

Software Piracy Business, Information Technology, and Business Ethics A majority of the research that comes from the business, information technology, and business ethics literature concerns software piracy as opposed to the other forms of digital media. These literatures have led the field by developing a different name for the practice —softlifting. This section of the analysis allows us to address the question: how have the theories been applied to the different forms of piracy?

Theory of Planned Behavior We begin by reviewing the literature on the TPB in the context of software piracy. The literature has shown support for the TPB and modified versions of the TPB. For instance, Peace, Galletta, and Thong (2003) used data from 201 respondents that work with computers to examine the efficacy of TPB, deterrence theory, and utility theory. The results indicated support for TPB. The

results

additionally

indicated

that

attitudes,

subjective

norms, and perceived behavioral controls were significant predictors of intentions.

In addition, the results indicated that deter-

rence theory and utility theory were important modifications to the TPB

model.

Following Ajzen (1991),

Peace et al. (2003)

showed that punishment severity and certainty, as well as cost of software all had a direct link with attitudes toward software piracy. Further, punishment certainty had a direct link with perceived behavioral control. Importantly, none of these measures had a link with subjective norms. Overall, the TPB and a modified version of the TPB were supported. Other studies arrived at similar results. Banerjee, Cronan, and Jones (1998) used a modified version of the TPB to understand

software piracy. Furthermore, they found that ethics might be a precursor to attitudes and subjective norms.

Leonard,

Cronan,

and Kreie (2004) asserted that moral judgment, attitude, per-

40

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sonal normative beliefs, ego strength, and locus of control were

all significant in understanding intentions to perform software piracy. Lin and Ding (2003) found that locus of control and job insecurity interacted with the TPB framework to understand software piracy. Cronan, Leonard, and Kreie (2005) showed that attitudes, in-

dividual characteristics, and perceived importance influenced intention to pirate software.

Moreover,

Lia, Lin, and Liu (2010)

showed that perceived prosecutorial risk and perceived psychological risk were predictors of attitudes toward software piracy, and that attitudes and perceived behavioral control were linked to intentions to perform piracy. Cronan and Al-Rafee (2008) showed that attitude, past piracy, perceived behavioral control and moral obligation were linked with intention to pirate software.

Finally, in a related article, Al-Rafee and Cronan

(2006)

showed that attitude, beliefs, age, perceived importance, influence of significant others, and machiavellianism had a link with intentions to software pirate. Other researchers have taken the perspective of examining only the link between attitudes and software piracy. These researchers defined attitudes in the same manner as Ajzen (1991).

The results of these studies support the connection between attitudes and software piracy using a variety of samples both collegiate and public (Eining & Christensen, 1991; Logsdon, Thompson, & Reid, 1994; Reid, Thompson, Seyal, & Rahman, 2001).

& Logsdon,

1992; Rahim,

Ethical Models The ethical models build off Hunt and Vitell (1986), but some modification and variation exists. For instance, Wagner and

Sanders (2001) use religion as the initiation point for ethical decision-making and judgment. Their theory also uses intentions from Ajzen (1991), so this ethical model is a hybrid of Hunt and Vitell (1986)

and Ajzen (1991). Wagners

and Sanders

(2001)

found support for this version of their theory in the context of software piracy. Kuo and Hsu (2001) showed how ethical com-

3 - THEORETICAL EXPLANATIONS OF DIGITAL PIRACY

41

puter self-efficacy may supplement the TPB model to reduce intentions and instances of software piracy. Beyond the ethical models,

several researchers

showed

that

morality had important links with software piracy. Simpson, Banerjee, and Simpson (1994) explored the factors that would influence the ethical decision process. They showed that gender, religion, personal gain and situation were important influences on ethical decision-making and software piracy. Logsdon, Thompson, and Reid (1994) showed that moral intensity had a negative link with software piracy. Furthermore, other researchers also showed that moral intensity had a negative link to software piracy (Kini, Rominger, & Vijayaraman, 2000; Kini, Ramakrishna, & Vijayaraman, 2004; Ramakarishna, Kini,

& Vijayaraman, 2001).

Economics The cost of software includes not only the purchase price, but also the cost of learning its full use and how it is compatible with other software (Peitz & Waelbroeck, 2003). However, there is also

cost associated with obtaining an illegal copy. Criminal prosecution is always a threat when performing an illegal act. During the process of copying the original, there is likelihood that a file will be corrupted. Furthermore, installation of a pirated piece of software requires some technical knowledge that not all consumers possess. Improper installation could also result in a corrupted piece of software.

Network effects, the effect one user has on the value of a particular product, can equate to social benefits if copyright protection is not enforced (Peitz & Waelbroeck,

2003). With software

these effects can be direct and indirect. The demand and usefulness of software has a relationship with the number of users. It is directly affected as more users of a product can easily exchange files. Indirectly, it becomes more useful with an increased num-

ber of users as products that are more complementary are released for the users.

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Piracy also increases the total number of users of software and can indirectly lead to private benefits for the software developer (Conner & Rumelt, 1991). With piracy, the product is “sold” for a price of zero dollars, but this also increases the desire for the

product and the willingness to pay for it. With a linear demand model, Conner and Rumelt show that piracy can either increase

or decrease the most favorable price charged by the developer, as well as increase or decrease profits. Increase in copyright protection could decrease the number of users, and in turn cause the price and profits to go in the similar direction. Takeyama (1994) also examines market demand based on con-

sumer behavior. However, her model involves full copyright protection used by the developer aimed at all consumers, whether it be those who would purchase originals despite the enforcement of copyright or those who would copy if the protection was not in place. Takeyama asserts users only receive a portion of the net utility of an original product if a copy is used. This lack of utility is higher for high-taste users, as the pirated material is a closer substitute for the original for low-taste users. The most financially advantageous strategy for the developer, as well as one that will fully utilize the network effects, is to set a price for the product that all users can afford. If the firm does face piracy, the lowvalue users pirate the product. However, if the network effects are fully apparent, a higher price can be demanded from the hightaste users and the developer can still make a profit. Further concerning network effects, Gayer and Shy (2002) examine the effect of hardware taxation on software demand. Since all computer users have to purchase hardware, a tax on the product not only reduces copying, but it also reduces demand for software. If hardware is priced high, purchasing a combined package of hardware and software is too» expensive for some users. In order to maximize user purchase of the original as opposed to copying, the software developer must create a tax that maximizes profits but also eliminates piracy.

Harvey and Walls (2003) hypothesized that there is a direct relationship between income and level of piracy. As income rises,

3 - THEORETICAL EXPLANATIONS OF DIGITAL PIRACY

43

the demand and supply of pirated movies decreases. However, Walls (2008) found in a study of movie piracy in 26 countries, income had no statistical relationship with piracy. Much like Shin et al. (2004), Walls (2008) showed that piracy did increase with collectivism. Furthermore, copyright protection can also decrease the demand for pirated movies if the cost of enforcement is low in relation to the value of property rights.

The theory of Harvey and Walls (2003) has been supported by multiple studies that show software piracy is negatively correlated with income and GDP per capita (Bezmen & Depken, 2006, as cited in Dejean, 2009; Husted, 2000; Rodriguez, 2006). There-

fore, those persons falling in the middle class category are more likely to be associated with software piracy offenders. Moreover, other researchers have discovered that membership in institutions that favor copyright enforcement lowers piracy rates, while countries that support sharing over individual ownerships have an increased piracy rate (Marron & Steel, 2000; Moores, 2003; Rodriguez, 2006). In other words, the views of a person’s culture

and social entities affect his or her attitude toward piracy.

Criminology Few studies actually solely investigate software piracy, but findings indicate that the predictive factors of software piracy are similar to those of music and movie piracy. Wolfe and Higgins (2009) performed a study with a sample of undergraduates (n = 337) at an Eastern university to determine the factors that contribute to forming associations with software pirating peers. The results indicated that individuals with lower levels of self-control were more likely to have lower ethical predispositions and more favorable views toward piracy. Furthermore, younger persons who reported pirating in the last month, along with lower ethical predispositions, were more likely to have favorable views toward software piracy. Surprisingly, they also reported that individuals with higher ethical dispositions were more likely to have associations with deviant peers. In other words, higher morals and values do not deter a person from forming friendships with software pirating peers.

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The next section will examine some of the more, if not most

popular forms of property theft: music piracy.

Music Piracy Economics Hui and Png (2003) found in a national study that piracy has a negative impact on the demand for recorded music. The International Federation of Phonographic Industry reported in 2006 that almost 40% of music discs purchased were pirated copies and the international distribution of this material was largely attributed to organized crime (Dejean, 2009). Zentner (2005) and Liebowitz

(2008) performed panel studies on multiple countries and American cities, respectively, and found that more common Internet access decreased the number of albums sold. This negative correlation was correlated with the ease of digital piracy. Peitz and Waelbroeck (2004) also found a 20% decrease in music sales in 16

countries due to online piracy, but added to the research by assessing the impact of digital piracy based on persons who reported downloading an MP3 file once or more. Boorstin (2004) and Liebowitz (2008) both examined the ef-

fect of the age of user on piracy. Boorstin found that users under the age of 24 use file-sharing to obtain music rather than to purchase albums. However, he did not control for the income difference between younger and older users, which could explain the choice to spend money on material compared to downloading it online. Liebowitz had similar findings, which indicated that cities with a larger amount of Internet users ages 10 to 29 were more likely to have negatively impacted album sales.

Other studies have examined the downloading behavior of undergraduate students. Rob and Waldfogel (2006) polled 500 students in American universities and found that downloading music online reduced album sales by 0.12 units. Furthermore, they found that downloading behaviors lead to a reduction in loss and consumer expenditure, which equates to an increase of wel-

3 - THEORETICAL EXPLANATIONS OF DIGITAL PIRACY

45

fare per capita. The researchers stated that although piracy does harm the music industry, it does allow users to explore music

they otherwise would not have known existed. Bounie et al. (2005) added to these findings by reporting that 30% of polled French undergraduates pirate material online and are reluctant to pay for music. Another 15% of the undergraduates explored music online, but were more likely to purchase music. The invention of peer-to-peer (P2P) networks! has drastically increased the presence of digital piracy in the music industry. While avoiding the issues associated with hard goods piracy, digital piracy introduces various issues in regard to the economic aspect of piracy. First, P2P allows an individual to act as a supplier of an illegal copy, rather than depending on an organized group to supply the material. This introduces a more decentralized setup. Secondly, as the information is now digitalized, individu-

als can listen to the material on any compatible device, as well as change it or combine it with other files. Finally, net neutrality (prohibits broadband carriers from discriminating against material published online or its users) is the silent advocate for P2P networks, as it does not restrict offering pirated materials (Dejean, 2009).

Duchene and Waelbroeck (2002) examined extended copyright protection on a firm’s music distribution and protection strategies against digital copies available on P2P. They propose that an original is more valuable than a copy and copyright protection increases a consumer’s disutility of a product. In turn, there is a reduction in the number of copiers of a product due to the expected punishment if caught. There is a direct effect on the producers of the copies, as well as an indirect effect on those who purchase the pirated material as the availability of the copies is decreased. Past studies have examined the effect of P2P networks on the

decline in music sales. Oberholzer-Gee and Strumpf (2007) col-

1. Peer-to-peer networks are virtual locations where it is possible to share anything that can be digitalized at no cost to the consumer (Dejean, 2009).

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lected data the course from these tested and 1.

2.

3.

4.

on downloaded songs from two OpenNap servers over of four months. They found that downloading music servers had no significant effect on album sales. They rejected the following four assumptions:

File-sharing decreases in the United States during the summer season due to lack of access to the Internet; therefore, file-sharing is a seasonal activity. Based on the time-zone difference, East Coast downloaders are able to utilize the advantages of Western Europe availability compared to West Coast downloaders. Music genres that get downloaded the most are most likely to have a decline in album sales. The increase in file-sharing in the United States is correlated with the decline in album sales.

The criticism of the Oberholzer-Gee and Strumpf (2007) findings is that it may not be representative of the whole P2P network. Moreover, many of the OpenNap servers were closed during the period the data was collected as this was during the anti-piracy movement that closed Napster. Napster was blamed for a large decline in album sales due to the ability to download music for free. In fact, Seung-Hyun (2005) found that Napster was responsible for a 20% decline in album sales.

Blackburn (2007) attempts to address the limitations of the previous study by analyzing download data from five major P2P networks. Blackburn (2007) also considers the effect of the Recording Industry Association of America (RIAA) statement,’ re-

leased during the same time period. Blackburn’s findings mirrored those of Oberholzer-Gee and Strumpf. In addition, he found that

unknown artists benefit with an increase in album sales as a result of piracy. More popular artists have a decline in album sales.

2. The RIAA released a statement asserting that individuals who illegally share copyrighted contents would be sued. This was associated with a short period of decline in downloading activity. However, when the RIAA released a statement stating that only the heaviest downloaders would be prosecuted, downloading began to increase again.

3 - THEORETICAL EXPLANATIONS OF DIGITAL PIRACY

47

Prior to Blackburn’s (2004) study, Zhang (2002) found similar

results by asserting that pirating material can actually be beneficial to marginal artists in the music community. Traditional methods of distribution are favorable to well-known artists with a large fan base, but these methods prevent smaller artists from equal distribution in the market. By offering the opportunity to purchase pirated copies of the material on P2P technology, marginal artists can enter the market without the push of a big label and the gross expenditures on advertising. However, according to Zhang, artists with more notoriety and support from big labels actually lose profit and exposure due to the increased price for their work. Liebowitz (2007) suggested that record sales and radio use could have a direct relationship. The music industry utilizes radio stations to promote products by playing the music of its artists, as well as advertising album releases and concert ticket sales. The industry may assume that the time and money dedicated to these promotional efforts increases album sales. However, Liebowitz reported (from his regression results) that listen-

ing to the radio, as well as online webcasts and podcasts, is used as a substitute for purchasing records and that this is a contributing factor in the decline in album sales. Moreover, Mortimert and Sorensen (2005) suggested that even though downloading has decreased artist revenues from a decline in album sales, it has

increased concert revenues.

Criminology The majority of studies on pirating behaviors in criminological literature found gender to be a significant variable, revealing that males were more likely to participate in digital piracy (e.g., Hinduja, 2001, 2007, 2008; Ingram & Hinduja, 2008; Kini, Ra-

makrishna, & Vijayaraman, 2003; Rochelander & Le Guel, 2005). Additionally, file sharers are often males with lower educational levels (Rochelander

& Le Guel,

2005)

and usually Caucasian

(Hinduja, 2008). The use of age as a control variable has not been found to have predictive abilities (Higgins & Makin, 2004).

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Ingram and Hinduja (2008) utilized Sykes and Matza’s (1957) technique of neutralization to explore online music piracy in undergraduates. A sample of students (n = 2,032) from a Midwestern university were questioned on their pirating behaviors and findings revealed that peer association was the strongest correlate of piracy. Internet speed and proficiency were weak correlates. Moreover, acceptance of the neutralization techniques, including denial of responsibility, denial of injury, denial of victim, and appeal to higher loyalties were predictors of piracy behaviors. Higgins, Wolfe, and Marcum (2008) tested Hirschi’s (2004) re-

vised version of self-control theory. A sample of undergraduates (n = 358) at a Southeastern university were questioned on pirating behaviors and intention to commit music piracy twice based on a hypothetical scenario. Results indicated that the average student downloaded two times in the past two weeks. Further, all self-control measures (with the exception of bonding) were corre-

lated with the dependent variable. Associating with downloading peers was also correlated. Moore

and McMullan

(2009) interviewed

44 self-identified

“file-sharer” students from three mid-sized Southern universities. This sample was obtained from a previous study that surveyed the same universities on attitudes toward file sharing. The students were questioned on use and perception of file sharing, as well as predicted behavior of shoplifting of music and movies. Findings indicated that the participants utilized techniques of neutralization, most commonly denial of victim, denial of injury,

and everyone else is doing it. All of the participants recognized file sharing was illegal but continued to participate in the behavior. Participants reported that the anonymity of the Internet and the perceived sense of freedom encouraged their behavior. Furthermore, some students reported that illegally downloading a song from the Internet often led them to purchase concert tickets legally, so the initial behavior was justified.

Several studies have found that a person’s value system has an effect on his or her intention or actual involvement in digital piracy. Gopal et al. (2004) utilized a behavioral model to test

3 - THEORETICAL EXPLANATIONS OF DIGITAL PIRACY

49

music piracy indicators. They found that ethical values and an individual’s perception of “justice” both influenced his or her involvement in music piracy. Moreover, Higgins and Makin (2004) and Higgins and Wilson (2006) asserted from further studies that an individual’s level of moral belief and involvement or intention to digitally pirate has an inverse relationship. Holt and Morris

(2009) explored the relationship between

MP3 player ownership and digital piracy behaviors by surveying undergraduates (n = 605) during the fall of 2006. Confirming the findings of previous studies (Higgins, 2005; Morris & Higgins, 2009), Holt and Morris (2009) found peer involvement in piracy was significantly related to the respondent’s involvement in the behavior. Technological experience and MP3 ownership were also significantly related to digital piracy participation. Furthermore, those respondents who did not own an MP3 player were still supportive of digital piracy as they felt the “victims” lost no behavior as a result of illegal downloading. The threat of potentially downloading a computer virus is often a fear for piracy participants (Balthrop, Forrest, Newman, & Willamson, 2004). The IFPI (2006) reported that 35% of music pi-

rates had ceased or reduced their pirating behaviors due to the contraction of a computer virus. Furthermore, Wolfe et al. (2007)

sampled approximately 400 undergraduate students in the Southeast and found that fear of computer virus contraction influenced a student’s intention to engage in illegal downloading of music files. The final section will present empirical studies from different disciplines examining movie piracy.

Movie Piracy Economics Since the 1980s, the movie industry has improved the home

movie-viewing experience of movies for consumers by providing new and improved formats on a steady continuum: VHS, DVD, and most recently, Blu-ray (Dejean, 2009). However, viewing

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3 - THEORETICAL EXPLANATIONS OF DIGITAL PIRACY

movies in the theater is still a different experience than viewing a movie in the home due to the picture quality and sound differences in the two venues. It is difficult to obtain the same experience when watching a movie that has been purchased on DVD, and it’s even more difficult when watching a movie downloaded from a P2P as obtaining a high-quality copy is complicated. Fetscherin (2004) downloaded movies from Kazaa during a four

month period and found that only 7% of the files produced a high-quality copy. Approximately 40% of the files actually failed to complete the downloading process and another 33% could not be viewed on a computer.

However, a criticism of Fetscherin’s

study was that Kazaa is generally used for sharing music files and could not truly reflect the quality received from more appropriate P2P networks. Bounie et al. (2006) reported that more efficient P2P protocols and improved Internet access allow a consumer to download movie files that are very close to the original source. The Motion Picture Association of America estimated that the motion picture industry loses approximately $3 billion yearly as a result of piracy (Motion Picture Association of America, 2005, cited in Walls, 2008). However, Bounie et al. (2006) found that

digital piracy only negatively impacts DVD sales and rentals, but not ticket sales to movies shown in the theater. Several studies have studied the relationships between DVD sales and the Internet, and some studies have even asserted that Internet access and

digital piracy increase DVD sales. This is contrary to the findings of the Internet having a negative aspect on music sales. Smith and Telang (2006) collected data during 2000-2003 on the relation-

ship between DVD sales and the Internet. They found that online access contributed to a 9.3% increase in DVD sales. They again measured media and the Internet again during 2005-2006 and found that TV and cable broadcasts increase not only DVD sales, but also digital piracy. Therefore, according to their findings, an increase in illegal downloading does not equate to a decrease in legitimate movie sales. Conversely, De Vany and Walls (2007) found that digital piracy is a large threat for the motion picture industry. It is, in fact, re-

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51

sponsible for a loss of almost $42 million. These findings are odd as theater revenue was extremely high during the time period the data was collected. However, other variables could be attributed to the decline of box office sales, such as lack of movie quality, competition of films, or the number of movies available in the theater. As a further result, the decrease in theater ticket sales is

also correlated with the copies available on P2P networks.

Criminology Higgins, Fell, and Wilson (2007) used a sample of college undergraduates (n = 338) to test differential association theory regarding movie piracy. They hypothesized that associating with peers who pirated movies would increase an individual’s positive attitude toward pirating movies. This assertion was supported, and a link between low self-control and pirating intention was developed. These findings collaborated with those found by Higgins and Wilson (2006) in a separate undergraduate sample. Malin and Fowers

(2009) tested Gottfredson

and Hirschi’s

General Theory of Crime on a sample of 200 high school students to investigate predictors of music and movie piracy. Results indicated that students in the sample had permissive attitudes toward piracy. Specifically, 12th graders had more favorable attitudes toward piracy compared to 9th graders. Malin and Fowers assert that it may be the case that piracy becomes more acceptable as students age due to their increased involvement in the behavior. Morris, Johnson and Higgins (2009) utilized multiple criminological theories to examine the role of gender on a student’s willingness to pirate movies and music. They assert that while gender differences are included as statistical controls in many studies of piracy, few examine the differences theoretically. In a sample of 585 undergraduates, they found that gender is not directly related to digital piracy. Being non-white, association with pirating peers, use of neutralization techniques, and higher levels of microanomie were significantly related to pirating behaviors.

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Conclusion The plethora of theoretical explanations for digital piracy presented from various disciplines attempts to explain participation in this deviant behavior. Literature from the fields of business, information technology, economics, and criminology demonstrates how theories from three fields of study attempt to explain the three main forms of intellectual property theft: software piracy, music piracy, and movie piracy. Theories from the area of business assert that piracy is a result of intentions; therefore, lit-

erature in this field tests the motivation of persons who pirate (i.e., the benefits of intellectual property theft). Not surprisingly, economic theories focus on the financial benefits and costs of piracy, specifically examining the effect on the product and consumer. Finally, criminological theories investigate what individual factors, such as self-control and peer association, increase the

likelihood of participating in the deviant behavior. However, regardless of the field of study, all of the theories are based on the concept of rational choice. In other words, humans operate under their own free will. Our theory also originates from this classical school of thought. The next chapter will present our integrated theoretical model to explain digital piracy.

Chapter 4

An Integrated Theoretical Model of Digital Piracy In the previous chapter, we introduced the predominant theories that have been used to understand digital piracy. The different disciplines offer a number of concepts and risk factors that are important to understanding digital piracy. Our focus in this chapter is to bring these different concepts and risk factors into a criminological context. With this in mind, we are able to recognize that many of the concepts are reformulations of theories of social control, self-control, social learning, and rational choice.

In this chapter, we propose an integrated theoretical model that assumes a developmental perspective, in that some parts of the model precede others. For instance, attachment and parental

monitoring are proximal during childhood, and peer influences are proximal in adolescence and young adulthood. Following the developmental and criminological literatures, we adopt the perspective that some personality characteristics are developed early and remain relatively stable throughout life. Other attributes such as perceptions of pleasure, pain, right and wrong,

change over

time and throughout situations. We begin our development of an integrated model of digital piracy by reviewing the theories from which we borrow concepts. Our attention then focuses on developing the integrative links of the model. We then provide an explanation of how the theory may be used to explain sex differences in digital piracy. We then provide some indication of how the theory is used to handle race differences in digital piracy. 53

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Review of Theories to Explain Digital Piracy We turn our attention to reestablishing the theoretical perspectives that we will use to develop our integrated theory. In the previous chapter, the presentation is closer to the various authors’ assumptions within the theories. This is completed to clarify our position on these theories. We begin by presenting self-control theory.

Self-Control Theory Gottfredson and Hirschi’s (1990) self-control theory is an evo-

lution of self-control theory in criminology. Their theory built off the classical school of criminological focus that rational individuals would seek pleasure and avoid pain. Parenting and self-control levels would become important in determining pleasure and pain. They argued that individuals who were exposed to poor or ineffective parenting (i.e., lack of bond, poor monitoring, and inconsistent or ineffective discipline) were susceptible to low selfcontrol (Gibbs, Giever, & Martin,

1998; Gibbs, Giever, & Hig-

gins, 2003). Low self-control refers to the inability to resist temptation when an opportunity presents itself because the individual is unable to foresee the long-term consequences of his behavior. Gottfredson and Hirschi (1990) argued that individuals with low self-control are characterized as impulsive, insensitive,

risk taking, physical rather than mental, and attracted to simple and easy tasks (Delisi, Hochstetler, & Murphy, 2003). Researchers have also shown that these characteristics remain relatively stable after the age of eight (Turner & Piquero, 2002).

Blinded by their lack of self-control, individuals would be attracted to the following characteristics of crime and deviance: immediately gratifying, risky and thrilling, physical, and simple, and easy. Empirical literature has shown a link between low selfcontrol and crime and deviance (Pratt & Cullen, 2000). In the

previous chapter, we outlined the connection between low self-

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55

control and digital piracy. Higgins et al. (2009) addressed an advance in self-control theory. Previously, Hirschi (2004) argued that researchers had focused on low self-control in a way that removed it from control theory. To address this problem, he reformulated the theory, bringing it back into line with control theory and suggesting that it is akin to social bonding theory. Thus, the focus should be on self-control not low self-control. Gottfredson (2006) argued that studies that use personality and social bonding measures support the theory, and that the measures may need to be used in concert or during different life phases. We will emphasize using both methods when we explicate the theory.

Social Learning Theory Akers’s (1998) version of social learning theory builds off of the tradition of learning theories in psychology and criminology (Bandura, 1986, Skinner, 1953). Akers’s (1985, 1998) theory is a continued refinement of Sutherland’s (1949) views of learning criminal behavior. In each of the revisions, Akers has been careful to retain differential association and definitions, but Akers also

adds concepts of imitation and reinforcement. For Akers (1998), social learning theory is comprised of four parts. Differential association in social learning theory refers to an individual’s primary interactions with others in a group. Definitions refer to an individual’s attitudes toward a behavior, including

techniques,

rationalizations,

motivations,

and

drives.

Imitation refers to witnessing someone else perform a behavior and emulating the behavior. Reinforcement refers to the anticipated and actual rewards, and punishments that may promote the initiation and continuation of a behavior. The combination of these measures is a complex process. Akers (1998) argued that several different configurations are possible when using the social learning theory process. Therefore, Akers (1998) argued social learning theory may be seen as a latent measure (i.e., a measure that cannot be seen or directly measured). The indicators of the latent measure are the four parts of the theory. We adopt this position as well. In addition, we specify

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some modifications to the theory. For instance, we argue that computer competency is an essential part of social learning theory for digital piracy. In Akers’s (1998) and Sutherland’s (1949) description of definitions, learning the techniques to perform a behavior is important. For us, the technique for digital piracy is computer literacy. We also specify the role of morality in social learning theory. We argue that morality encompasses the ethical nature of digital piracy from the business ethics literature on digital piracy. To accommodate this in social learning theory, we view morality as part of the sanctioning structure that is attributed to reinforcement. Conversely, Higgins and Wilson (2006) argued that morality is an attitude. Regardless of whether morality is an attitude or reinforcement, we believe that this is encompassed within social learning theory. Thus, our focus in this chapter is to specify social learning theory for digital piracy. Akers would agree with these modifications, given that social learning theory requires a behavior-specific approach.

An Integrated Model of Digital Piracy Developing our integrated model of digital piracy requires us to revisit our definition and characteristics for this behavior. Our definition comes from Gopal et al. (2004), who argued that digital piracy is the illegal act of copying digital goods, software, digital documents, digital audio (including music and voice), and digital video for any reason (other than to backup) without explicit permission from, and compensation to, the copyright holder. At this point, we believe that it is instructive to remind the reader that individuals who perform digital piracy utilize the Internet and only need minimal computer skills. The definition and accompanying characteristics suggest that digital piracy is something that needs different forms of risk factors to explain in a satisfactory manner.

4 - AN INTEGRATED THEORETICAL MODEL OF DIGITAL PIRACY

As we have shown,

57

multiple risk factors and theoretical as-

sumptions may be used to understand digital piracy. As there does not appear to be a single cause or correlate for digital piracy, an integrated theory that utilizes multiple pathways to digital piracy may provide some benefit to understanding the behavior. Integrated theories have gained some appeal in the criminological literature. The power behind integrated theories is that they acknowledge the limits of single theories, improving explanatory power by combining theories in a coherent model (Elliot, 1985; Messner, Krohn, & Liska, 1989).

We believe that theoretical integrations provide the most promise for explaining, and ultimately, developing policies to prevent and intervene in instances of digital piracy. With this in mind, we propose the following model, incorporating risk factors that come from self-control theory, social learning theory, and theory of planned behavior that have shown promise from the business, economics,

information technology,

and criminal jus-

tice/criminological literatures. Using digital piracy as an example, poor or ineffective parenting practices and self-control levels come from self-control theory. Computer skills, peer association, attitudes, and morality come from social learning theory. Intentions to perform a behavior come from the theory of planned behavior. To date, community and structural measures are noticeably missing from the digital piracy literature. Because digital piracy takes place in an environment different from street crime, it is

not likely that community or structural measures have much of an influence on digital piracy. We are not ruling this possibility out, but we do understand that this is not the main environment in which the behavior takes place. Thus, we do not include com-

munity or structural measures in our integrated model.

Our integrated model of self-control, social learning, and the theory of planned behavior proposes a theoretical framework for understanding multiple pathways of digital piracy. The theoretical perspective has a developmental tone. That is, we believe that some portions occur before others. Figure 4.1 shows our integrated model. In Figure 4.1, each of the arrows shows a hypothe-

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sized link that is based on theoretical formulations and prior research. The arrows suggest that the concepts may have direct and indirect effects that relate to digital piracy. Figure 4.1 provides a number of theoretical links that need to be addressed formally. Accordingly, we provide three arguments for integrating self-control theory with social learning theory. First, researchers have shown that self-control appears to remain relatively stable (Turner & Piquero, 2002), indicating that dynamic measures may be necessary to develop proper policy to reduce instances of digital piracy. With self-control remaining relatively stable, policy implications have to address something different. This would imply that a dynamic measure or series of measures would be ripe for discussion. Second, because an individual’s level of self-control is devel-

oped early in life and remains stable, we believe that it is possible that an individual’s level of self-control is developed before she has learned the requisite computer literacy, attitudes, peer association, or morality to perform digital piracy. In other words, it is not likely that individuals less than 8 years old will be perceptive enough to perform digital piracy, but we do concede that some anomalies may exist. Self-control and social learning theory have additional implications for peer association. Gottfredson and Hirschi (1990) argued that the effects of self-control would be

contingent on constraints (e.g., peer association). In addition, Gottfredson and Hirschi (1987) argued that “people acquire the propensity to delinquency, find delinquent friends, and commit delinquent acts ...” (p. 597).

Third, self-control helps to shape an individual’s definitions of crime (1.e., attitudes or tenacity). In this view, peer association is

a mechanism that is used to shape the definitions and the acquisition of the techniques for criminal activity. This view is supported by Bolin (2004) in the empirical literature and Higgins,

Fell, and Wilson (2006) in the digital piracy literature. Based on these three arguments, we see that self-control should influence social learning theory.

4 - AN INTEGRATED THEORETICAL MODEL OF DIGITAL PIRACY

59

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4 - AN INTEGRATED THEORETICAL MODEL OF DIGITAL PIRACY

We now provide our formal arguments that self-control theory and social learning theory should influence intentions. We begin by suggesting that intentions may be additional constraints that the effect self-control works through to link with digital piracy. Hirschi and Gottfredson (1993) argued that self-control was the most important measure for criminal behavior, but they also left the door open that self-control may influence crime through other measures. Higgins and Marcum (2005) showed that this is the case for alcohol use among college students. Thus, we believe that this will be the case with digital piracy. Social learning theory should have a link with intentions. Ajzen (1988) developed the Theory of Planned Behavior with a number of measures that are endogenous to Akers’s (1998) ver-

sion of social learning theory. From Chapter 3, Ajzen’s (1988) version of attitudes is equivalent to Akers’s (1998) and Sutherland’s (1949) version of definitions. The link between the atti-

tudes and definitions is that each provides a positive or negative evaluation of the behavior. The greater the excess of these definitions that are positive for behavior, the more likely the behavior is to occur. In addition, Ajzen’s (1988) version of subjective norms is consistent with Akers’s (1998) version of differential association, be-

cause both provide some perception of normative influence to develop attitudes that produce behavior. For Ajzen (1988), the influence is not direct but theoretically unintended, yet has been found to be relevant. Ajzen’s (1988) ideas of perceived behavioral controls (i.e., the perception that the individual is capable of performing a behavior) are an important foundation for the techniques that are necessary to perform the behavior. We believe that individuals that have not obtained these techniques are not as likely to believe that they can perform the behavior. Thus, the perceived behavioral control pool includes the techniques that are necessary to perform the behavior. With our assumptions that the main components of TPB are consistent with the concepts of Akers’s (1998) social learning theory, we believe that social learning theory

4 - AN INTEGRATED THEORETICAL MODEL OF DIGITAL PIRACY

61

should have a direct link with intentions for digital piracy. Higgins et al. (2006) support this contention. Borrowing from the TPB, intentions should have a link with digital piracy. We also believe that intentions should have a direct link with digital piracy. Intentions come from two different parts of literature. At this point, intentions have been attributed to the Theory of Planned Behavior (TPB) literature. Ajzen (1988) argued that

intentions are the motivation that prepares an individual to perform a behavior. Within the criminological literature, intentions have important legal implications. According to Siegel (2009), one of the three elements of a crime is intention. Furthermore, intent

to commit a crime is a conscious objective and purpose to perform a legally criminal behavior. This concept, often referred to as motivation, can also be seen in classical criminological theory, theory based on the assertion that humans are rational beings. From the initial assertions of Cohen and Felson (1979), and in conjunction

with the works of various other scholars, the currently recognized Routine Activity Theory states that there are three components necessary in a situation in order for a crime to occur: a suitable target, a lack of a capable guardian, and a motivated offender. Cohen and Felson (1979) agreed with the assertion of Hindelang et al.

(1978) that the routine activities of certain groups expose them to greater risk of crime, and changes in our constantly progressing society have provided motivated offenders with more opportunities to commit crime (Cohen & Felson, 1979). Thinking about intentions with these two perspectives allows us to complete the conceptual definitions of our integrated theory, which will address the social and legal components of the definition of digital piracy.

Effects of Sex Researchers have shown that digital piracy occurs differently for males and females (Higgins & Makin, 2004). Our integrated theory is able to account for the differences between the sexes in digital piracy. We are able to demonstrate this by examining the different theoretical perspectives that we have integrated.

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Self-Control Theory A number of studies have examined the sex-generality of selfcontrol theory with mixed results. This review provides a summary of previous research that examines the effect of sex on the link between self-control and criminal behavior. To clarify the link, Gottfredson and Hirschi (1990) argued that males and fe-

males would have different levels of self-control. Females are thought to have higher levels of self-control than males because parents are more likely to monitor their female children more closely making behavioral information readily available. The data makes the availability of discipline likely when the behavior is deviant or criminal. The differences in self-control have implications for crime and deviance. That is, males are much more sus-

ceptible to crime and deviance than females because they have lower levels of self-control. The research provides mixed results. On one hand, LaGrange and Silverman (1999) found that self-control was not able to re-

duce the effect of sex on delinquency. On the other hand, Burton et al. (1998) found support for Gottfredson and Hirschi’s premise. This view was also supported by others researchers (Higgins & Tewksbury, 2006; Stewart, Elifson, & Sterk, 2004). In

the digital piracy literature, Higgins (2006) showed that self-control was conditioned by sex in the direction that Gottfredson and Hirschi (1990) would predict. This suggests that self-control may account for the differences in digital piracy as predicted by the theorists.

Social Learning Theory Some scholars have examined whether social learning processes in the context of behavior differs for boys and girls. Akers (1998) argued that sex influenced the social learning process. Specifically, Akers (1998) argued that the social structure would have an impact on the social learning process. In this context, Akers argued that three parts of the social structure would influence the learning process: differential social location, differ-

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63

ential social organization, and differential social location of primary and secondary groups. Sex differences fit into the differential social location portion of the social structure. That is, the sex

of the individual influences the social learning process. Overall, the research literature is mixed in the sex differences in social learning theory and crime and deviance. The results show that differences in peer association appear in some research (Fletcher, Darling, & Steinberg,

1995), while others show that

peer association does not differ for boys and girls (Campbell, 1991). Morris and Higgins (2010) showed that the social learning process partially mediates the link between sex and digital piracy. This indicates that social learning theory may assist in understanding sex differences in digital piracy.

Intentions We turn our attention to the literature on digital piracy. Higgins (2006) showed that this varies by sex. Morris and Higgins (2010) found similar results. The problem with these results is that intentions were the dependent variable, not an intervening variable, to actual digital piracy. We believe that intentions should mediate the effect of sex on actual digital piracy. The effect of sex on digital piracy will be weakened by self-control and ' social learning; thus, the remaining variation that comes from sex will be handled by the motivation process.

Summary of Effects of Sex The empirical literature provides a base knowledge of the versatility of explanations of digital piracy, but this area remains pregnant with research possibilities. The previous research in digital piracy shows that sex is more than just a control variable and has substantive meaning. Thus, additional research in this area is

necessary to determine if the pathways and females. In addition, more research if the integrated theory may be able to on digital piracy. These are two different

work the same for males is necessary to determine mediate the effect of sex types of research investi-

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gations that may provide valuable information to determine if sex-specific or sex-neutral policies or programs are necessary.

Effects of Race/Ethnicity Here we present the relevant information concerning our integrative theory in the context of race/ethnicity. We attempt to provide logical explanations, consistent with the original theories, to explain race/ethnicity differences in digital piracy. It is worth mentioning that at the time of this writing, we are not aware of any studies that directly test for race or ethnic differences. We are aware of studies that perform tests using international populations. On one hand, these studies are beyond the scope of our work at this time, given that we derived our theory based on United States legal statutes. On the other hand, we do not see how international digital piracy would not be explained by our theory. Gottfredson and Hirschi (1990) argued that race/ethnicity differences in crime and deviance are due to differences in parenting practices that result in differences in self-control. For instance, they argued that blacks are more likely to have lower levels of selfcontrol because they are subjected to less monitoring and harsher forms of discipline than white individuals. To date, the empirical literature shows mixed results. De Li (2004) showed that the ef-

fect of race on delinquency was not reduced when including measures of self-control. Vazsonyi and Crosswhite (2004) showed that

self-control measures performed equally well for blacks and whites. Higgins and Ricketts (2003) were unable to support the claims made by Gottfredson

and Hirschi

(1990).

In addition,

Pratt, Turner, and Piquero (2004) found differences in parenting for whites and non-whites. To date, we are not aware of an American study that assesses the racial/ethnic differences in digital piracy using self-control. Similar to sex differences, Akers (1998) argued that the social

learning process

is influenced

by race/ethnicity.

Specifically,

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65

race/ethnicity is part of the differential social location of the social structure. Thus, social learning theory should explain or mediate a substantial portion of the race/ethnic differences in crime and deviance. Akers and Silverman (2004) argued that the social

learning theory process remains valid across race. At the time of this writing, we are not aware of any research that explains digital piracy across race/ethnicity.

Similar to self-control and social learning theory, intentions may behave differently across race/ethnicity. For instance, we believe that whites may be more likely to be motivated for digital piracy than blacks. To clarify, whites have more access to and are more likely to desire digital media than blacks. This is an assumption that needs to be empirically explored.

Chapter 5

Testing the Theory Theory testing is a process wherein researchers attempt to collect data that will allow them to falsify the hypothesized links between the concepts. In order to falsify our theory empirically, we must demonstrate that our integrated theory has met basic criteria that allow researchers to test it. To accomplish this demonstration, we present and apply common principals to determine if a theory is a “good” theory (i.e., logical consistency, scope, parsimony, testability, and policy implications).

This chapter describes the different methodologies that may be used to examine our integrated theory of digital piracy. With this in mind, we discuss qualitative and quantitative research designs to collect data in a systematic manner that may allow researchers to falsify our theory. In each of our descriptions, we point out potential problems that may arise in using these methodologies to understand digital piracy. In each of these types of research, we are sensitive to the issue of cross-sectional and longitudinal data. With

this

understanding,

we

believe

that

adequate

research

methodologies may be developed to determine if our theory explains a substantial portion of the variation in digital piracy. When researchers empirically test our integrated theory, they should keep in mind our view of success for this theory. We do not make the bold and, realistically, unattainable claim that our

integrated theory will explain all of the variation in digital piracy. Frankly, human behavior is too complex for any theory—single or integrated —to explain all of the variation in digital piracy. We believe that our theory should explain a substantial portion of variation in digital piracy. The term “substantial” will differ depending on the research design and measurement of our theoret67

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ical concepts. With this in mind, we provide a theoretical test of our integrated model by defining and applying the criteria mentioned above.

Theoretical Test of the Integrated Theory In this section, we address the question of whether our integrated theory is in fact a theory. That is, does it meet the established criteria to be considered a theory? The criterion that we use comes from Akers and Sellers (2004). Others use similar criteria

when evaluating a proposed theory (see Williams & McShane [2009] for an example). Akers and Sellers (2004) argued that the

three criteria are logical consistency, scope, and parsimony. Logical consistency refers to the concepts being clearly defined and their connections making sense. In Chapters 3 and 4, we outlined the conceptual definition of the concepts that we proposed to use in our integration. When reviewing Figure 4.1, we see that our connections between the concepts are logical, especially when considering the temporal ordering of the concepts. Akers and Sellers (2004) argued that theories should have a

wide scope. This simply means that theories should be able to explain more than one form of a behavior. Our impetus in developing our integrated theory is to explain digital piracy. Given that our integration originates place from general theories of behavior and crime, it seems reasonable to us that the integrated theory may be able to explain more than just digital piracy. In fact, meta-analyses have shown that intentions has a strong connection with a plethora of behaviors (i.e., health related behaviors and antisocial behaviors) (Armitage & Connor, 2001; Godin & Kok, 1996; Sutton, 1998). Akers (1998) and Pratt et al. (in-press)

show that social learning theory is related to a number of deviant and criminal behaviors.

Pratt and Cullen

(2000),

in a meta-

analysis, showed that self-control is related to a number of criminal and deviant behaviors. This indicates that our integrated theory should be related to a number of other behaviors. We leave it to others to explicate how they believe that the integrated theory

5 - TESTING THE THEORY

should work

in explaining these behaviors.

69

However,

keep in

mind that success with these other behaviors is success for the in-

tegrated theory in general. Akers and Sellers (2004) argued that a theory should be parsimonious. This means that a theory should use the fewest number of concepts and hypotheses possible to understand a behavior. Our integrated theory is efficient, given that it does not rely on a large number of concepts. After measurement issues have been resolved, the theory relies on six hypotheses to understand digital piracy. We believe that this demonstrates that our integrated theory is parsimonious. A theory should provide enough information to inform policy development and decisions (Akers & Sellers, 2004). If our inte-

grated theory meets the criteria for testability, then it will provide sufficient information to develop and inform policy decisions. We will present our views on policy development and policy decisions in a later chapter. To be able to provide information for policy development and decisions, our integrated theory must meet the criteria for testability. As Stinchcombe (1968) argued, a theory must be empirically verified or disproven by use of proper empirical methodologies. In other words, a theory may fit all of the criteria theoretically, but it is still important for a theory to be empirically testable. In other words, a theory must be able to be empirically falsified. If it cannot be falsified then it is not testable (Stinchcombe, 1968). For a theory to be testable, it must meet more criteria. First,

the theory must not be tautological. This means that the theory cannot be correct by definition. In other words, the theory may not be subjected to circular reasoning. In our integrated theory, Akers (1991) argued that low self-control was tautological. That is, he argued that Gottfredson and Hirschi (1990) proposed low self-control as the inability to refrain from crime, and that low self-control was a cause of crime, making low self-control correct

by definition and tautological. We follow Hirschi and Gottfredson (1993) and argue that low self-control survives the charge of tautology because of the manner by which it is measured. Low

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self-control may be measured using behaviors that are not criminal or by personality style inventories depending on the age of the individual. This allows low self-control to survive the charge of tautology (Gottfredson, 2006). Hirschi (2004) argued that there was no need to use personality measures of self-control, and to

properly measure self-control one needed to use social bonding measures

(i.e., attachment,

commitment,

involvement,

and be-

lief). These measurement strategies allow self-control to be used in our integrated theory without worry of a tautology. Second, a theory must follow the conventions of empirical evi-

dence. That is, a theory must use what others have found on empirical testing. We believe that our integrated theory follows this convention because we used the published research to develop this particular theory. That is, we used the empirical evidence that came from the digital piracy literature in the business, economic, information technology, and criminal justice/criminological literatures to develop this theory. However, social learning theorists may argue that our integrated theory is nothing more than a compilation of social learning theory. Akers (1998) argued that individuals are socialized to develop behavioral control to Gottfredson and Hirschi’s (1990) self-control. We believe that in-

dividuals acquire self-control early in life and then learn to perform digital piracy; thus, our theory is an integration of self-control and social learning theory. Third, a theory must have measurable concepts. This means that a theory must have observable concepts. If the concepts cannot be measured, the hypotheses cannot be checked against actual events. In our integrated theory, the concepts can be observed. For instance, several researchers and theorists have shown that self-control may be measured in several different ways (Grasmick, Tittle, Bursik, & Arneklev, 1993; Hirschi, 2004; Gottfredson, 2006). Akers (1998) has shown several different

ways that social learning theory concepts may be measured. Higgins (2005) showed how computer skill might be measured, and

Bachman et al. (1993) demonstrated how morality might be measured. Ajzen (1988) indicated how intentions might be mea-

5 - TESTING THE THEORY

71

sured. Several researchers in the empirical literature have shown how digital piracy may be measured (Higgins, 2005; Higgins et al., 2006; Higgins, Wolfe, & Marcum, 2008).

Overall, our integrated theory appears to meet the theoretical criteria for a theory. We showed that our theory has logical consistency, scope, and parsimony. The theory has the potential to provide enough information to bring about policy development and decisions that may assist in reducing instances of digital piracy. Finally, we showed that our theory fits the criteria for testability. In the next section, we present the different ways in which we believe our integrated theory may provide useful insights to understand and reduce instances of digital piracy.

Methodologies to Examine the Integrated Theory of Digital Piracy In this section, we provide some methodological ideas that might assist researchers in testing our integrated theory. We want to caution that our presentation should not be used to limit researchers. It is our belief that a theory that does not stand the test of rigorous empirical testing should be respecified, and our motivation is to respecify the theory as needed. That said, the purpose of our presentation is to provide some rudimentary guidelines and ideas to stimulate research that examines our integrated theory.

Qualitative Research Methods The presentation of the methodologies includes the following: qualitative research, survey research, and experimental research. In our presentation, we are sensitive to cross-sectional and longi-

tudinal designs. We begin with our description of qualitative research to falsify our theory. When testing our theory using qualitative methods, we believe that two methodologies will work best.

First, qualitative interviews will be particularly helpful. Qualitative interviews provide researchers with understandings of the theoretical concepts of integrated theory. For instance, a re-

2}

5 - TESTING THE THEORY

searcher is able to ask multiple questions that may help provide a richer understanding of the role of intentions in our theory. Additionally, qualitative interviews provide deeper understandings of how self-control may influence the social learning process, or how demographics may influence self-control or the social learning process in the context of digital piracy. Cross-sectional and longitudinal designs are important for qualitative interviews. At this point, it is instructive to consider the definitions of cross-sectional and longitudinal research designs. A cross-sectional research design allows a researcher to collect data at one point in time. Longitudinal research designs allow researchers to collect data at multiple points in time. In the context of qualitative interviews, cross-sectional interviews allow researchers to gain deep one-on-one understandings of our theory and digital piracy for one point of time. Longitudinal qualitative interviews require repeated interviews, allowing researchers to gain some perspective of how the concepts and links may change over time. In addition, longitudinal qualitative interviews may show shifts in intentions (i.e. motivation) in digital piracy as well.

Second, we believe that focus group interviews are particularly instructive in testing our integrated theory. This approach allows a researcher to interview a group of people at one time. When performed properly, a focus group interview has the entire group conversing about a specific topic with other group members. This form of research will be particularly helpful when trying to determine the scope of digital piracy. That is, focus group interviews may be particularly helpful to determine the extent of digital piracy among juveniles, young adults, and adults. Much like qualitative interviews, focus groups may be either cross-sectional or longitudinal. We believe that a longitudinal approach may provide important understanding of the variations that occur within the concepts of our theory and digital piracy.

Quantitative Research Methods In our view, two types of quantitative research methods are relevant: survey research and experimental research. We begin by

5 + TESTING THE THEORY

73

describing survey research. A survey is a questionnaire that is designed to garner information about attitudes, behaviors, and beliefs (Babbie, 2002). The main method of gathering information

comes from a series of statements eliciting this information. In a survey, the answer choices may be open-ended or closed-ended. A carefully crafted survey will have statements that address only one concept or part of a concept at a time. Unfortunately, surveys are not flexible, forcing some items on individuals that may not understand, comprehend, or have the knowledge to address the

item. Surveys provide researchers with a large amount of flexibility within one document and provide efficiency when collecting data. To date, tests of the concepts of our integrated theory and digital piracy have largely used surveys. This suggests that survey research has importance for testing our integrated theory. The survey research that has been performed thus far has relied on cross-sectional

data.

On one hand,

cross-sectional

re-

search limits our understanding of digital piracy and the factors that may have a link with digital piracy. On the other hand, crosssectional data provides a modest first step in understanding digital piracy. We have concerns with relying too much on cross-sectional survey data to test our integrated theory. Our chief concern comes with the theoretical concept intentions. According to Ajzen (1988), intentions should have a link with actual behavior. The

proper way to test this is to collect longitudinal data to make sure that the motivation that comes from intentions actually translates into digital piracy. To date, Higgins et al. (2009) is the only study that provides this sort of information. The remaining studies have relied on cross-sectional data that only shows that pieces of our integrated theory have a link with intentions. Thus, we believe that longitudinal survey data will be particularly instructive in testing our integrated theory. Experimental research is not outside of the realm of possibilities for testing our theory. For a basic experiment, a researcher needs four parts (Babbie, 2002). The first part is an experimental group (i.e., a group that receives an experimental stimulus). The second part is a control group (i.e., a group that does not receive

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the experimental stimulus). The third part is an experimental stimulus (i.e., the concept that allows researchers to determine what causes a reaction or change from the baseline). The fourth part is a random assignment schedule. Experiments have the ability to determine if the experimental stimulus is causing a reaction because outside influences have been controlled and isolated. We see that experiments are possible with our integrated theory. Researchers may be able to develop innovative methods to use intentions as an experimental stimulus. The presentation of intentions as an experimental stimulus may be randomly distributed to an experimental and control group. Overall, our integrated theory may be tested using a variety of different methods. These different methods may provide support for the entire theory or parts of the theory. Thus, the different research methodologies may point to different avenues to improving or respecifying the theory. Like Tittle (1995), we will take the approach of respecification when ample research demonstrates that this should occur. In the process of respecification, we do not take the position that a concept that has been added by someone else threatens our integrated theory (for example, if someone

adds a measure of self-efficacy to our integrated model). The support that comes from this issue does not threaten our integrated theory. In fact, such an inclusion would have to be accompanied by a substantial amount of theoretical gymnastics, given that Bandura (1986) argued that self-efficacy is part of the learning process. The point here is that our integrated theory provides the overall framework for this type of respecification. In other words, the addition of a measure still provides support for our integrated theory. We will respecify the theory if high quality research that is sensitive to cross-sectional and longitudinal issues is able to show that one of our concepts or our hypotheses needs to be reworked.

5 : TESTING THE THEORY

75

Populations for Testing the Theory The population from which the data are drawn is important for testing our integrated theory. To date, the vast majority of the data on digital piracy comes from college student samples. This occurs for several reasons.

First, college students are easy,

simple, and cost effective samples from which to draw. Second, college students are computer literate and have an interest in digital media. Third, Payne and Chapple (2009) argued that college students afford an opportunity to learn a lot about various behaviors, and we believe that digital piracy fits this perspective as well. The down side is that we need to know about other segments of society as regards digital piracy. For instance, adolescents are very computer savvy and may have acquired the skills necessary to perform digital piracy. Currently, we are experiencing a dearth of information about digital piracy in the context of adolescents. That is, we are aware of only one study that examines digital piracy using adolescent populations. The research literature is very limited on digital piracy with this particular population. In addition to not having a substantial amount of research on digital piracy among adolescents, the status of the literature is limited on the adult population. Researchers have been so preoccupied with college student samples that the adult population has gone understudied. In addition, we recognize that the lack of research funding in the area of digital piracy has limited its development. Regardless of the funding hurdle, understanding digital piracy among the adult population is imperative to developing and implementing well-rounded policy. Overall, we believe that researchers who use various method-

ologies to test our integrated theory will find that support for our general premise. Our hope is that we have inspired researchers to use innovative techniques to capture cross-sectional and, especially, longitudinal data to test our theory. Tests of our theory are

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greatly improved by using populations that we are not accustomed to seeing in the empirical literature. We believe that tests of our integrated theory using adolescent and adult populations will provide rich information for the development of sound policy. In the next chapter, we provide some of our preliminary speculations about the types of policies that are possible from the success of our integrated theory.

Chapter 6

Policy Implications As stated previously, the underlying premise of this theory is that humans are rational beings who are able to make logical choices and decisions during their day-to-day lives. Therefore, the resulting policies of this premise should be modeled under this same theoretical concept. Learning theorists operate under the assumption that behavior can be learned, or unlearned, based

on the concept of reinforcement and rehabilitation of the offender. Furthermore, the self-control of an individual and the in-

fluence of peers and their behaviors can in turn increase the participation in digital piracy of other individuals. Policies and programs can be developed to combat the problem of digital piracy in two manners: proactive and reactive. Below is a discussion of the proactive and reactive policy strategies proposed to combat digital piracy, based on the different theoretical schools of thought integrated into our theory.

Intentions Proactive The first theoretical school integrated into our theory is based on the classical theory of criminology, which focuses on rational choice and the balance between benefits and costs that deters offenders and potential offenders. Our theory will examine these choices to offend, as well as what the offender intends to achieve. Policy measures developed under these concepts indicate action taken by those directly affected by piracy: website managers. Privately owned websites that sell and distribute music, movies, and V7.

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software should take measures to prevent piracy of their property. In other words, websites need to take steps to make their property not as easily accessible, as well as less attractive as a potential target. Target hardening strategies have demonstrated effectiveness in reducing crime as they improve the security of access points of physical, as well as digital locations (Marcum, 2010). For example, password protection and security questions are methods of target hardening used to reduce intellectual property theft online. The amount of guardianship at the entry point of the website is increased and therefore should decrease victimization of the website (Bernburg & Thorlindsson, 2001; Tewksbury & Mustaine, 2000). Pease (2002) considers target hardening strategies to be

secondary and tertiary forms of prevention, as it not only blocks those at high risk of committing digital piracy (e.g. persons with low self-control or under the influence of deviant peers who perform the same behavior), it also stops those persons who have a previous history of piracy. Shover and Copes’ (2010) work on persistent thieves focuses on the work of offenders who steal in the physical world; how-

ever, the policy implications utilized for these offenders could also apply to those who persistently pirate online. For example, Shover and Copes assert increasing legitimate opportunities will decrease the desire to commit illegal behaviors. The offender has more choices available to him and can better evaluate the risk of committing crime. Websites could offer incentives for legitimate purchasing of their material in order to decrease attempts at piracy. For example, offering a buy one/get one song or movie offer or a discounted purchase of software may serve as a deterrent against pirating behaviors.

Reactive There are also reactive measures that websites can take to prevent future pirating of their material. Unfortunately, there are always savvy Internet users that seem to outsmart technology faster than it can be produced. A reactive measure these websites could

take is to refuse legitimate access to their websites, or any other

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79

sister accounts, to any person caught pirating. In other words, if user is caught pirating a song from iTunes, Apple would have the ability to cancel any standing accounts for a determined period of time. Then the user would be unable to legitimately purchase any material from the iTunes website (i.e. songs, games, movies), as well as any other related Apple site. The range of punishments would be based on the discretion of the website, and would serve

as a deterrent to a potential offender. Removal from the site would serve as a direct punishment, in addition to the indirect punishment of witnessing peers still having legitimate access to the material. Moreover, peers of a punished offender would also be deterred for fear of similar repercussions.

Self-Control The next theoretical concept integrated into the theory is that of self-control. However, according to Hirschi and Gottrfredson (2001), policy implications of this portion of the theory should focus on immediate attention to the crime rather than long-term consequences. Offenders with low self-control are impulsive and act on what benefits them immediately, rather than weighing potential repercussions in the future. Therefore, based on this the-

ory, crime control would be more effective if it made the crime harder to commit.

Proactive Hirschi and Gottfredson’s (2001) proactive stance would be based on the following: 1) limitation of access; 2) restriction of

unsupervised activities by teenagers; and 3) early education. The first two assertions would limit opportunity to commit crime. Thus, self-control is not tested. While the use of age restrictions

on websites have been utilized previously to limit access, they are often ineffective as the website does not require proof of age. Rather than utilizing this type of access requirement, a proactive suggestion would be to require a preliminary credit check of all

80

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consumers utilizing websites that allow for purchasing and downloading of material. This could be as simple as providing a valid credit card number before even granting an account, or conduct-

ing a credit check. Teenagers and young adults who have yet to develop credit would have much more difficulty accessing the website. Early education of the implications of piracy is a policy implication of multiple schools of thought. However, as Gottfredson and Hirschi (1990) assert that self-control is formed by ages 10-12 and remains stable over the life course, very young elementary school students should be educated on the illegal nature of stealing (whether online or offline), as well as the ethical prob-

lems resulting from this behavior.

Reactive As stated before, any reactive policy implication based on controlling

low self-control

needs

to have

immediate,

rather

than long-term consequences. Based on this assertion, persons participating in piracy should immediately lose access to websites from which they pirate. In other words, if Rhapsody catches a person pirating a song from their website, that person will immediately be blocked from further use of the website. Furthermore, the user could also lose access to sister websites owned by the same company.

Social Learning The final theoretical concept of peer association and involvement, which is another facet of our theory, has been supported in multiple theories as a contributing factor to the participation in digital piracy (Higgins, 2005; Hinduja, 2007; Holt & Morris, 2009; Ingram & Hinduja, 2008). Policy implications of these findings indicate that having peers who pirate increases the likelihood of piracy by an individual. The thought process of “every-

6 - POLICY IMPLICATIONS

81

one else is doing it” increases the acceptance of participation in the behavior, even if it is known to be illegal (Moore & McMullan, 2009). Therefore, logical thinking would allow us to conclude that reduction of piracy in peer groups would in turn decrease the occurrence altogether. There are also proactive and reactive measures that can be taken to affect the influence of peer involvement on digital piracy.

Proactive Multiple studies have been performed utilizing a college student sample. Ramayah et al. (2009) indicated that students in their sample were aware of piracy issues and that the behavior was illegal, but they were not concerned about the repercussions

of illegal downloading (possibly because of the invisibility of their identities due to downloading). They suggested universities should be proactive in taking action to cease this behavior among students through campaigns to raise awareness of the punishments facing them should they be convicted. Furthermore, courses addressing ethics should discuss the unethical aspects of digital piracy. In addition, Malin and Fowers (2009) believed more research

needs to focus on younger age groups, such as high school students. Their findings indicated that as high school students get older, their attitudes towards pirating material online become more favorable. Specifically, students are more likely to participate in software piracy as they age. Based on the results of the study, Malin and Fowers asserted that the best way to curb piracy among younger students is to include education about piracy as a crime and the costs to the artists and producers of the material. Therefore, piracy would not necessarily be viewed as a victimless crime. For example, Holt and Morris (2009) discovered that al-

though the user knew that pirating was illegal, they were more likely to support the belief that piracy was acceptable, since it caused no monetary losses. Furthermore,

they discovered that

impressing youth with the knowledge that theft is unethical, in turn makes piracy unethical as well.

82

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Reactive Reactive measures to affect peer influence of digital piracy would involve punishment of offenders via educational institution. For example, if a student participated in digital piracy while on school grounds (e.g., library, classroom, dorm room), the in-

stitution could take measures to punish the student (i.e., restricted access on school computers). This is a form of positive punishment and reinforces that piracy is a negative behavior. If a student refrains from participating in the behavior for a designated amount of time, the institution could grant privileges back to the student, such as gaining free access on the computers again or other rewards.

Conclusion The Business Software Alliance (BSA) represents the world’s

software industry, with the goal of promoting a successful information technology environment. One of their main public policy goals is to create an environment of legitimate transaction between software producers and consumers and to prohibit and punish cyber criminality. In regard to protection of intellectual property, the BSA (2009) asserts the following policy actions are necessary: 1. 2.

3. 4,

Reformation of outdated patent law. Upkeep of copyright laws, so they keep in step with changing technology, as well as enforcement of those laws. Training for law enforcement agencies to combat intellectual property theft. Education for the public about intellectual property theft, digital piracy, and cyber crime in general.

Suggestions by the BSA to update copyright laws are extremely important, as technology changes daily. Therefore, this would indicate that legislation such as the No Electronic Theft Act and the Digital Millennium Copyright Act (both passed in the late 1990s)

6 - POLICY IMPLICATIONS

83

are outdated and need to be amended on a regular basis to stay in touch with the changing technology. Kabay (2000) asserted that due to the sophistication of the technology involved, cyber crimes are often undetected and/or

unreported. Support has been found by recent studies that dedicating resources to cyber crime training for law enforcement agencies increases the likelihood of investigation into, and arrest for these crimes.

For example, Marcum,

Higgins, Ricketts and

Freiburger (forthcoming 2011) found that having a specialized cyber crime task force, as well as a larger number of sworn officers dedicated to the investigation of cyber crime, increased investigations and arrests for online possession and production of child pornography by law enforcement agencies. On a federal level, the Federal Bureau of Investigation’s Innocent Images Project has increased the number of investigations and arrests of child exploitation cases dramatically (Federal Bureau of Investigation, 2010).

However, as Jewkes (2003) reported, expertise of these crimes is gained at a high price, so agencies must be willing to dedicate large amounts of funding to ensure proper training in this field. While the BSA (2009) obviously focuses on prevention of software theft, these concepts can be applied toward the protection of movies and music as well. In regard to education, the BSA pro-

motes the use of programs such as “Play it Cyber Safe” and “Define the Line” to better educate students in elementary, secondary and higher education on legal use of intellectual property, and of the impact of theft of these materials. BSA also encourages employers to educate staff members on online theft and promotes the use of random audits of employee computers. Furthermore, IT specialists have a responsibility to evaluate risk in their work environment and adapt accordingly to protect their material. The suggestions of the BSA are not uncommon to the policy implications suggested as a result of our integrated theory of digital piracy. These applications address the three main concepts of the theory and how they affect digital piracy offenders and potential offenders: intentions of the offender, self-control, and social learning.

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Index Ajzen, 27, 28, 39, 40, 60, 61, 70,

Economics, 26, 30, 41, 44, 49,

13s oS

52, 57, 86, 88, 89, 95-98 Faculty, 20, 21

Akers, Ronald, 51, 71, 72, 76,

78, 80, 81, 84-86

Federal Bureau of Investigation,

Business Software Alliance, 7, AD; PBs Bs XE

5, 6, 83,88

Felony, 16-18

File-sharing, 44, 46

College students, 20-24, 60, 75, 81, 89, 94, 96, 97 Computer, 3, 13, 14, 16, 17, 19, 42, 49, 50, 56-58, 70, 75,

Goods,

89, 96

Gottfredson, 11, 37, 51, 54, 55, 58, 60; 62, 64, 69, 70, 79, 80, 88-91, 95, 98 Hirschi-e sol lear, 465051484, 55, 58, 60, 62, 64, 69, 70, 79, 80, 88-91, 95, 98

86, 90-93, 95-98 Consumer,

19,33, 45, 56,86, 87,

31—33, 42, 44, 45,

503 52

Copyright, 15-19, 31-33, 37, 41-43, 45, 56, 82, 86-88,

94-96, 98 Copyright Act of 1976, 15, 16

Information,

3-7, 9, 12, 20,

24-26, 29; 395-45, 525 57,

62:64, 69=71) 73, 75,76, 82, 86-88, 90-93, 95-98

Criminal, 3, 6, 14-18, 34-38, Ale D500 0,00 = 62,1055 70, 87-91, 94, 98 Cyber crime, 82, 83, 93 Deterrence, 34, 39, 89, 90, 98

Infringement, 15-17 Intellectual property, 14, 33, 52, 78, 82, 83, 93-95,97

Differential association, 34, 35,

International Phonographic Fed-

Sly Ss OY Digital piracy, 1, 8, 9, 11-65,

Internetessel

eration, 7, 44, 92

67-73, 75, 77, 78, 80-83, 88-91, 94, 95, 98

[I>

salve

2 oil

38, 44, 46, 48, 50, 56, 78,

86, 89-91, 93, 95, 96, 98 J.C.R. Licklider, 12 99

100

INDEX

Law enforcement, 3, 5, 6, 82, 83 Liability, 15, 16, 97 Misdemeanor,

68-70,

17, 18

Motion Picture Association, 7, 50, 94 Movie Piracy, 7, 22-24, 43, 49, Syl, BA, iI, fo%0), SB, Slow, Sis: Movies, 4, 8, 11, 13, 15-17, 19,

21, 22; 38,43, 48-51-77, 79, 83 Music; 4;°7;'8, 115.13, 155-175 IS

Paks, PAS

PPE

Sibi. Boh,

43-52, 56, 77, 83, 86, 88, 90-93, 96, 98

Music Piracy, 7;38,,.11, 13, 21, 22, 24, 38, 43—45, 48, 49, 51, 52, 77, 88, 90—93,96

Neutralization, 36, 48, 51, 87, HO, lis SH

85-87,

72,

77-80,

83,

89-93, 95, 98

Social learning, 27, 34, 35, 53, 55-60, 62—65, 68, 70, 72, 8037855855895, 905 94597, Software, 3, 4, 6-8, 11, 13, ESN Wis AREA

WS, oes, Sie)

38-43, 52, 56, 78, 81-83, 86, 87, 89-98

Software Piracy, 3, 7, 11, 13, 19-21, 23, 32, 38—43, 52, 56, 78, 81, 86, 87, 89-98 Technology, 3; 15,17, 25,26, Jah, Alok ZY ey evs TANS 78, 82, 83, 90-92, 96, 98

Theory of Planned Behavior (TPB), 26, 61

No Electronic Theft Act, 15, 17,

Triandis model, 38

Uniform Crime Reports, 5

82 Peer-to-peer networks, 22, 45, 88 Piracy, 1, 3-9,

Self-control, 35, 37, 38, 43, 48, 51-55, 57-60, 62-65,

Victimization, 5, 6, 36, 78, 90, Ol

11-65,

67-73,

75, 77, 78, 80-83, 85-98

Bia, S17

i —

—

.

wi

a Pa

a en

ee es