[T]here are two types of expatriates in Shanghai: Those who work for multinational corporations and those who don’t. The former enjoy plush “expat packages,” which include humongous salaries, chauffeurs, maids, and villas in Pudong. The latter pursue creative or “deadbeat” jobs while nurturing entrepreneurial fantasies. What everyone seems to have in common—expats and natives alike—is a penchant for collecting pirated DVDs.
One of the expats at our table had amassed 200. Another, 400. All looked at me funny when I asked whether anyone had any moral or legal qualms about this. Later, in Beijing, when I asked the same question of a business-school professor, the head of a trade organization, and two CEOs—the sorts of serious people, who, in the U.S., might become apoplectic about, say, file-sharing—I saw the same quizzical look, with one of the CEOs adding that having to spend more than $2 for a DVD or $10 for Windows XP was an outrage. At Sasha’s, the expats explained that buying real DVDs wasn’t an option, especially for the Chinese, because real DVDs cost 10 times more and weren’t even available. (The TV producer claimed she knew of a store that carried them, but the others disputed this.) Fake DVDs, moreover, often were real DVDs: The same factories that produced and shipped real ones during the day produced and shipped fake ones at night.
[…] This, of course, reveals one of the two fallacies in the media industry’s assertion that file-sharing and DVD piracy are the same as “stealing”: Some of the supposed damages from “lost sales” would never have been sales in the first place. The other fallacy is that the “theft” of digital property is the same as the theft of physical property—which it isn’t. When someone steals a physical product—a car, say, or a DVD from the shelves of Blockbuster—the owner has lost more than a potential sale; he or she has lost inventory. When someone buys a copy of a digital product, however, for which the owner of the copyright has paid nothing, the owner has lost only a potential sale. This doesn’t make file-sharing or DVD piracy OK—there must be some way for producers and packagers to get paid—but it does explain, in part, why millions of people who would never shoplift are so eager to collect pirated DVDs.