Examining The Issues Of Digital Piracy Information Technology Essay

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This study of digital piracy involves the violation of copyrighted content for example, software, music, films, books and many other. Whereas the final result may possibly related with the use of physical digital media, such as CDs and DVDs. Digital piracy is the unlawful imitation of copyrighted digital material. The unpermitted replication may be done for business use, educational use, personal use, or it may be done to sell copies of the pirated digital material. The trouble can be encountered wherever computers are utilized whether in schools, libraries, businesses, and homes.

The growth of broadband internet connection and inexpensive media to save the data, alongside with the growth of digital material, has permitted digital piracy to spread worldwide. Digital good, is expensive to produce but inexpensive to duplicate and distribute (Gopal and Sanders 2000). Piracy enables the illegal circulation of games, books, photos, music, movies, television programs, software, video and periodicals quickly and easily, to the detriment of creative artists and legitimate rights holders. Because of the simplicity of copying, it is in the software producers' interests to make it as difficult as possible to obtain illegal copies of copyrighted digital product (Maude and Maude, 1984). It also indicates that firms spend substantial resources developing methods to prevent unauthorised duplication (Rosenberg,1989; Schildkraut and Gasper, 2000).

The extents of the digital piracy crisis probably become superior in the next decade. In the year of 2004, internet broadband acceptance by society in Organization for Economic Cooperation and Development (OECD) countries past 100 million, suggesting us the technology has now in touch with a serious mass that is capable of supporting important piracy based on peer-to-peer file exchange (Organization for Economic Cooperation and Development, 2005). The rapid dispersion of broadband connections to the Internet and the rise of peer to peer networks make it much easier to download large files. For example as those for music mp3, e-book files, software and movie, increasing the risk and doubts of boost in digital piracy percentage. On the other hand, publishing companies are also concerned that the much predictable digitalization of print media, when attached with the growth of a practical e-book reader, might be accompanied by a rise in piracy percentage as digitalized texts are traded through file sharing technology.

It can be said that, digital piracy is an illegal activities and purchasing. Downloading with concern means that purchaser is supporting the illegal activities. Usually, people who doing piracy do not pay taxes because the piracy products were brought in the country or sold through internet without the local enforcement knowledge. With this, counterfeiters gain profits. Therefore, consumers that indulged in buying illegal goods has become part of the cycle of counterfeiting unconsciously.

1.2 Problem Statement

Nowadays, the Internet and new communications technologies created a digital piracy of copyrighted works a serious worldwide problem. Of all the industries that have been transformed by the wide spread of digital technology. Several have been beat tough as for the digitalized business for examples the producers of music, movies, television programs, software, video games, books, photos, and periodicals.

Studies by (Lau, 2006) also imply that perceived excessive pricing is a factor in the decision to perform illegally. He found that price factors was found to be a leading factor motivating public to use pirated product since the public able to choose either originals or copies. They most likely opt for the cheaper option of pirated digital product. People tend to use pirated digital product in all financial and economic situations. A number of people used economic downturn as an excuse for their participation in pirate activities. It could be true as most of them can't afford to pay a high price for the originals product through the recession period. Nonetheless, they will still go for pirated stuff even when the economic situation is getting better. For example, a pirated CD-ROM disk costs you less than RM20, but it contains software worth a hundred ringgits. It is not a matter of the economic situation. Prices for the pirated stuff are the main reason. The combination of lower cost and equal product quality created the digital piracy product.

1.3 Research Objectives

The research objectives are as follows:

To identify if price is the factor that attract consumers in buying digital piracy product.

To identify if quality is the factor that attract consumers in buying digital piracy product.

To identify whether the consumer satisfied with the digital piracy product.


The research questions of this study are as below:

Why price factor attract consumers to purchase digital piracy product?

Why quality factor attract consumers to purchase digital piracy product?

Do consumers satisfied with the digital piracy product?

1.5 THE Importance of Study

This study will be beneficial for:

1.5.1 The Academician

This study will help the academician or other researchers that focusing on piracy topic. This study will provide the information needed towards piracy. This study will enhance other researcher to do an in depth review pertaining on the piracy issues.

1.5.2 The Marketers

Digital piracy is a serious risk to marketers. Marketers have come up with many strategies to defeat the problem. However, all of the strategies seem not working. This study will help marketers to recognize the consumers' attitudes and their intention in using digital piracy product.

1.5.3 The General Public

There are consumers that keenly to buy piracy product. In order to keep up their status within current digitalized product, they intend to purchase or downloading piracy product without taking concern on the lawfulness towards piracy. There are also customers that buying or downloading product unintentionally. They purchase it for the reason that of little information towards counterfeiting. This study will be a good reference to the general public. This will help to enhance their knowledge about counterfeiting. They will be more concerned about their rights and also will help to decrease piracy products.


The terms used in this study are defined for ease of understanding.

1.6.1 Consumer

Consumer has two different kinds which are personal consumer and organisational consumer. Consumer is an individual who purchase a goods or services. Personal consumer is a person who buys goods and services for household use, for his or her own use, for the use of a family member or a gift for a friend. While, organisational consumer is a government agency, business, or other institution either profit or non-profit, buys goods or services and equipment essential for the organisation to function.

1.6.2 Price

Price is a market value, or agreed exchange value. It will be purchased in a definite quantity, weight, or other measure of a good or service. It may be fixed by a contract (such as sale of goods contract), left to be determined by an agreed upon formula at a future date, or discovered or negotiated during the course of dealings between the parties involved.

1.6.3 Quality

Quality is a perceptual, conditional and somewhat subjective attribute and may be understood differently by different people. Consumers may focus on the specification quality of a product/service, or how it compares to competitors in the marketplace. Producers might measure the conformance quality, or degree to which the product or service was produced correctly.

1.6.4 Copyright Infringement - Software Copyright

Copyright laws provide an exclusive right to reproduce, distribute, prepare derivative works, or otherwise control the product

1.6.5 Digital piracy

Digital piracy is not limited to music files; all types of media, including movies, television shows, and videogames, have been illegally downloaded from the internet.

chapter 2

Literature Review

One of reason for digital piracy is to save funds. Price is a significant subject as it guides the individual in determining value and fairness. For example evaluating what comes out of allowing another individual to copy original products. No matter how much money the pirates actually earn, and they feel justified in pirating data because they think that original digital media is overpriced. This as compared to what was put into the exchange. Rajendran and Tellis (1994) initiate that the lowest price is a sign for a reference price. While over the time, pat prices of an genuine product seem to become the most essential sign. Previous studies has acclaimed that reference price has been an important feature that influence consumer's buying behaviour.

2.1 Price

By considering to digital media, there is some facts that digital piracy perceive the price for digital products in higher quantity. This could be unfair, predominantly given the economic achievement of some of the copyright owners. Pirates exploit this inequality to get an excuse for their illegal manners (Gupta, Gould, & Pola, 2004; Harrington, 1989; Hinduja, 2003). Furthermore, Freestone and Mitchell (2004, p. 126) have found that Generation Y attitudes towards e-ethics and misbehaviours of using internet, with the aim of Generation Y consumers aged among 8 and 24, in 2004 appear more tolerant of digital piracy. Numerous have responded that they believe that the customer are not going to give direct harm to the owners or sellers. This is because they believe that they cannot notice the direct economic consequences of their behaviours. On the other hand, they believed that they're the victim of inflated digital product. Additionally, they blaming the industry for charging the prices artificially inappropriate.

Levin et al. (2007, p. 121), who found that attribution of consequences had no impact on students' intention to download in the future. Student typically has merely got an alternative which is to use pirated material since they cannot manage to pay for the originals. It is common for university students or college students, who are in general not yet financially independent having a tough time to accept that film producer, music artists or digital product companies really need the money that is lost due to the distribution of piracy and downloading piracy material. This is well summarized by Lin (1995, p. 88) who noted, It's just a matter of necessity. We want the software and we want it now. We need it. But it impossible to get it in some other way. The genuine product is overpriced.

According to Pagell (1990, p. 5) stated the fundamental idea as follows. Obedience to copyright could be expected merely when the originals are without difficulty available in a timely manner at a reasonable price. In the same way,in Hong Kong a study of 243 undergraduate business students examined availability of pirated software. Besides that, censure towards software piracy and the cost of original software as predictors in the level of self-reported software piracy (Moores and Dhillon, 2000). The availability of the product, fewer apparent censure, and higher expenses were linked with augmented piracy.

Based on Glass and Wood (1996, p. 1191) statement, Each Individual determine their decision on justice or fairness of their relationships or exchanges with others by measuring the ratio of what they receive from the exchange (outcomes) to what they get by the exchange (input)". It was found this factor had significant effects on respondents' intentions to commit digital piracy.

In Singapore, Swee et al. (2001) initiate that Members of inferior income groups there had further positive behaviors towards pirated media. These clashing results may occur if the buying behavior were product precise. For pirated garment or other physical product, for example, which are displayed openly and easier to spot on as having been pirated, lower income groups is tend to more aspired to being seen to use brands stand by by higher income groups. On the other hand, for products which are consumed confidentially, particularly in a family surroundings. One might declare that family income is more significant than personal income. Besides, higher income households will spend more. A number of studies focus principally on the market factors regarding piracy. The availability of software is a key issue, as is pricing. In countries where income is low and software is normally hard to find and expensive, that moral attitudes towards piracy would be relatively diverse from the entire opposite.

2.2 Quality

Another reason because they consider price factor when using digital product is because of the quality. As Chiou et al. (2005, p. 164) tip out, "the act of a pirated CD or files on the internet in general can have quality as good as the original one. Consequently, the performance risk is not very strong". In other words, there is minimal risk that a pirated copy of a digital product will carry out unsuccessfully. It was entirely related to keenness to pay for software products (Hsu and Shiue, 2008, p. 730). This is because, most customer seeking the lower price as a choice for them.

Regarding with the copyright digital products, such as computer software, video games and sound recordings, replication skill is so highly developed that it is frequently not possible to differentiate between genuine and pirated products as the quality are almost the identical, which in many cases are clones of the original. In favour of high quality counterfeits, neither the packaging nor the product quality indicates any clues as to the merchandise genuineness. (McDonald & Roberts, 1994). Some necessitate which is noticeable, categorized by discouraged demand. Moreover, for which the marketplace is unable to offer a lawful supply at reasonable prices, openly invites supply from a substitute source. Consequently, pirated product may be seen as substitute rivalry, by the benefit of a extensive reduction on existing prices. Via this disagreement, piracy turn into no more than a challenge by a number of operators to tackle unevenness in the marketplace .


Figure 1 shows the theoretical framework of this study. It can be acknowledged that the dependent variable is price factor influencing consumer attitude toward digital piracy. Where else the independent variables would be separated to affordable and quality. These are the factors that could influence consumers' perception on piracy thus supporting out dependent variable.

Affordable pricing plays on the most important roles in the perceptions that consumers build towards piracy. Pirated goods play a role as a price advantage. Consumers get to get benefit from the same products at a cheaper cost and most importantly have almost the same level of quality. Therefore lower price has a constructive influence on customers' perception.

Another reason because they consider price factor when using digital product is because of the quality. The performance of digital piracy on the internet generally can have quality as good as the original one. Therefore, the performance risk is not very strong. In other words, there is a very low risk that a pirated copy of a digital products will perform poorly.

Independent Variables

Dependent Variables


Piracy Product


Figure 1: Theoretical Framework



The research methodology is essential to get the accuracy about the topic of this research and to achieve the objectives of this study. Research methodology refers to what types, where, when, and how data are collected, gathered, analysed, and translates to make the research complete and serve its purpose. The research methodology for this research divided into two methods, which are data collection and data analysis.


There are two types of data collection method that used in this study which are primary data and secondary data.

3.1.1 Primary Data

According to Malhotra (1999), primary data is a data that "Originated by researcher for specific purpose of addressing the research problem". The method of primary data collection used is through questionnaire and interview with the consumers. A set of questionnaire will be distributed by the researcher to the particular sample that being chosen. Questionnaires

Questionnaires contain the question that simulates the respondents to provide required responses. Researcher design the questionnaire aligns with the research objectives and the theoretical framework. Two languages used by researcher which is English and Bahasa Malaysia. Both languages used for the ease of understanding of respondents. Questions will be constructed using the structured question such as multiple-choice, dichotomous and likert-scale question. These structured questions are constructed to be simple and short.


3.2.1 Target Population

According to Malhotra (1999), target population is the collection of the elements or objects that posses the information sought by the researcher and about which inference are to be made. They are the specific and complete group that relevant to the study. The target populations of this study are consumers' within Kota Kinabalu areas which possess the ability in purchasing illicit goods.

3.2.2 Sample Size

Sample size refers to the number of elements to be included in the study. Determining the sample size is important because it may help the researcher to collect more accurate data from respondents. It also helps the researcher reduce the fatigue and errors in collecting data. According to Uma Sekaran (2003), as a rule of thumb, sample size between 30 and 500 could be effective depending on the type of sampling design used and the research question investigated. Therefore, researcher will use 125 samples for this study. Researcher will use 120 samples exactly to obtain the data. The exceeding of 5 samples will be use to cover error data that acquire from the 120 samples.

3.2.3 Sampling Design

Non-probability sampling was used for this study, meaning the populations have no probability for being selected as sample subjects. The type of probability chosen was convenience because the response obtained quickly and efficiently.

3.3 scope of study

The study will be carried out within Alamesra and 1 Borneo Hypermall. Within this area, there are a lot of organization or premises that may using some particular software to handle their job. For example like cyber cafés, offices, and many others. Off course in this area have many students from UMS, UiTM, Politeknik and others that aware about information technology and utilize the internet for their own benefit. They usually looking for entertainment sources from the internet such as mp3 songs, movies, softwares and many more. Many of them taking a short cut by just downloading the media through website that providing pirated media for free of charge or much lower prices compared to the prices from the genuine sources.


The data that gathered from the completed questionnaires will be analysed using the Statistical Package for Social Science (SPSS) version 17. The SPSS will help researcher to gain the descriptive statistics which include the frequency distribution, percentage analysis, and cross-tabulation. The descriptive statistics then will be analyse and interpreted to acquire the information needed.

3.3.1 Descriptive Analysis

The objective in this analysis is to identify the pattern of respondents' demographics. Demographic includes are respondent's gender, age, education level and personal income. This analysis will help researcher to explore the data collected and to summarise the data. Summarised data will be easier to be described.

3.3.2 Cross-tabulation Analysis

Cross-tabulation is a statistical measurement that depicts two or more variables concurrently. The statistical dimension will be resulted in tables .It reflect the joint distribution of two or more variables with a limited number of categories or distinct values. As a result, researcher may possibly evaluate the variables that associated with other variable. Through using cross-tabulation analysis, researcher anticipate to know the value and level of factor of why the consumer using digital piracy as a means to get digital product.