The Organization for Economic Co-Operation and Development, made up of thirty democracies, focuses on issues facing the economy, the society, and the environment due to globalization. Their executive summary aims to identify the economic impact of counterfeiting and piracy. In 2005, they found that pirated and counterfeited products amount to $200 billion, ecxluding trade conducted through the Internet. To put this number into context, the report states that the amount is larger than the GDPs of 150 economies. They found that piracy operations are in large led by organized crime such as gangs and terrorist groups. Only groups with financial stability and vast distribution networks would be capable of controlling such a market. Even though certain target groups have been identified, it is still difficult to catch and combat these pirates.While piracy exists in all economics, it is most pronounced in developing countries. The report calls upon governments to strengthen law enforcement and regulation to diminish these networks.

While some counterfeit goods could potentially be harmful to ones health, such as counterfeit pharmaceutical drugs, other pirated goods such as movies serve to decrease economic growth and discourage creativity. Due to the Internet, new distributions outlets are available for pirated material. As the report emphasizes, the Internet provides an infinite market for products that can be sold through full anonymity. Not only does piracy effect copyright industries, it is also shown to effect areas of trade, the evironment, and employment as well.

The report finishes by suggesting methods to improve information on counterfeiting and piracy to better target such groups. By developing more information on the national and global level that is systematically collected, comparable, and comprehensive, there can be a uniform system for combating these illegal activties.

In my paper, I intend on identifying the challenges the movie industry faces. The data collected by the OECD provides significant insight into the nature of the groups disseminating pirated goods. In addition, their numerical figures will help me quantify the impact of their activities, economically and socially.

Summary of business strategy section:

Apple explains its business strategy in its annual 10-k filing. It seeks to continue to capitalize on the “convergence” of digital consumer electronics and the personal computer. Thus far, Apple has realized success in this area through its iPod and iTunes innovations.

Apple’s larger vision of the digital world is that we are in an age where the personal computer functions as the digital epicenter for cutting edge digital devises such as the “iPod digital music players, personal digital assistants, cellular phones, digital camcorders, DVD players and televisions.” Apple has thus positioned itself to offer both products and solutions for this new era.

Along the lines of offering new products, Apple recently introduced an iPod that can display photos and play video. In terms of solutions, all iPods work with the iTunes software on both Macintoshes and Windows computers. In addition, the iTunes Music Store is fully integrated with the iTunes software. This allows users to “preview, purchase, download, organize, share, and transfer” digital media to an iPod all with one software applet.

Importance to Thesis:

Apple’s business strategy is important for developing my third argument, which must prove that Apple has formed its business model to fit the future of media consumption.  From the summary, it is clear that Apple has a vision of where the digital media age is, and where it is headed.  Thus, Apple’s hardware and software products are the result of a large scope competitive strategy.  In addition, the contrast between Apple’s forward looking business strategy provides a contrast to recording companies’ narrow minded focus on eradicating peer-to-peer networks.  While recording companies have been fighting lawsuits, Apple has positioned itself at the forefront of the digital media revolution.  This contrast can help explain the recent success that Apple has enjoyed.