Filipino iTunes

"It turns out people are more likely to pay if they have more money and less likely, and just pirate, if they have less money."

A friend of mine wrote a paper revolving around this simple thesis. While most studies focus on the effect of piracy on the economy, his study focused on how the state of the economy affects the prevalence of piracy. However, if we can't increase the money that people hold how about we just increase the purchasing capacity of that money?

Take iTunes for example, few Filipinos actually purchase music from iTunes because iTunes may be cheap for the US dollar holder but it's too pricey for the average Philippine peso holder. What if iTunes were tailor-fit to the Philippine economy though? Drop the prices and give the common Juan the feeling that purchasing an album is just like buying a cinema ticket or less even.

The purchasers are not the only one's benefited by such a move. Sellers would be able to widen their market base and address their lost income due to piracy. Best of all, this would be a proactive step towards destroying the piracy mindset in a poor economy like ours. People are more likely to pay than pirate if their budget can survive it. So work with their budget because their budget is limited but sellers' capacity to generate income from purchases is not.

Such a set up would have some effects on the way iTunes is handled globally and on how artists' incentives are still safeguarded. However, these hurdles are not insurmountable.

Maybe we can take our cue from McDonald's - the poster child for globalization. How indeed has McDonald's infiltrated so many countries with such diverse economies? It customized. By customizing its menu and prices to the economies it entered, McDonald's was able to gain a global foothold (or should I say global footrest?). With a dab of effort in research and software change plus a gallon of subsidy generation/artist compensation cutback/ad assistance; the online music industry can battle piracy in the same way, i.e. customizing based on the economy of the countries they're selling to.

Maricris L. Real

Entry #9