US CD/DVD bootlegging is not run by organized crime

For years, I've taken it for granted that while the entertainment industry was generally full of crap when it came to how people were infringing copyrights online, they were at least correct when they talked about the "organized crime" elements who run the counterfeit CD and DVD businesses that supply the endless stream of sidewalk hawkers and market-stalls around America.

But according to this Wired News article, there's precious little evidence of any organized crime involvement with CD and DVD counterfeiting in the USA. That makes sense: organized crime likes the kind of business where they supply something the customer can't get for herself, preferably at a gigantic markup — guns, hot goods, drugs, etc.

But while the average crack customer lacks the wherewithal to cultivate his own coca or machine his own handgun, practically all the customers for counterfeit CDs and DVDs are just as capable of cranking them out as the mob is. All you need, after all, is a burner, and Internet connection, and a file-sharing client.

So there's got to be a lot of downward pressure on the price of bootleg CDs and DVDs — the only customers for these things have to be people who are too poor to afford their own burning rigs (who, by definition, won't be able to afford high-priced bootlegs either) or people who are willing to shell out a few bucks for the convenience of not having to go to the bother of downloading and burning themselves — and for this latter, you have to ensure that the monetary cost of buying the discs never exceeds the convenience cost of downloading it yourself.

Considered that way, it's not surprising that there's not much evidence of mob activity in this realm — the mafia is smart enough to stay in those businesses where it doesn't compete with its own customers.

Asked to cite actual U.S. convictions involving organized crime, the RIAA and MPAA instead presented a handful of pending piracy cases against warez networks, commercial replicators, a few members of street gangs and a smattering of individual drug dealers — but no John Gotti or Tony Soprano.

"It's not organized crime families, as in 'the mob,'" admits Bradley Buckles, head of the RIAA's anti-piracy unit and former director of the Bureau of Alcohol, Tobacco, Firearms and Explosives. "But large groups engaged in organized criminal activity are involved."