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FEDERAL STATE EDUCATIONAL INSTITUTION

OF HIGHER EDUCATION

NATIONAL RESEARCH UNIVERSITY

HIGHER SCHOOL OF ECONOMICS

Saint Petersburg School of Economics and Management

Department of Management

Bachelor's thesis

In the field 38.03.02 `Management'

Educational programme `Management'

What impacts consumers' attitude towards streaming: digital piracy vs paid subscriptions

Droznina Ekaterina Dmitrievna, Filimonova Diana Aleksandrovna

Reviewer: head of the marketing analytics group Panenko A.V

Supervisor: lecturer Pronin A.S

Consultant: lecturer Veretennik E.V

Saint Petersburg

2019

Abstract

The entertainment market occupies a significant position in the current global economy. The shift to the popularity of series from films and television in the industry is abruptly sensed. At the same time, the new market niche is actively evolving. This niche is comprised of digital streaming services which give the opportunity for the target audience to use digital content using a paid subscription, that is a freemium business model. However, there is a huge threat to the business in the field of entertainment in the form of digital piracy, whose consumption throughout the world, and especially in Russia, remains at an unsatisfactory level. Moreover, this illegal sharing and use of digital media are considered extremely harmful to business, whose model is based on the transfer or lease of property rights or the right to view content. The relevance of this study is confirmed by the fact that at the moment it is necessary to understand the key factors that force people to pay for digital products, and not be generated to pirated content.

In this paper, we use an online-distributed questionnaire, as an instrument, which presupposes the collection of answers of 201 respondents due to question with filter, dividing the respondents into quazi experimental and control groups. The questionnaire consists of six blocks, based on some socio-cognitive models: theory of planned behaviour, ethics and deterrence theory. Questions in the questionnaire are devoted to consumers' preferences on the Internet, commitment to streaming services, the experience of digital piracy and socio-demographic data to determine the respondent's portrait. The analysis is conducted using econometric models, such as custom tables, factor analysis, the reliability analysis, analysis of variance (ANOVA), based on the program SPSS. Our findings suggest that fear of legal consequences is negatively related to consumer's intention to pirate digital products. Also, we obtained some practical results from the analysis with socio-demographic variables. Thus, people who spend most of their time on the Internet on social networks are more prone to online piracy. But the less a person spends time on the Internet, on the whole, the less he is inclined to pirate media content. As a result of research, it was obtained that females are less willing to engage in digital piracy and are more likely to purchase a paid subscription to the streaming service than males. At the same time, it was revealed that higher incomes of respondents do not reduce their commitment to digital piracy. Based on this pattern of results, we offer theoretical and practical implications.

Keywords: series, digital piracy, streaming services, consumer behaviour

Table of Content

• Abstract
• Introduction
• 1. Theoretical foundation
• 1.1 The shift in popularity from movies to series
• 1.2 Series as a phenomenon
• 1.3 Competition in the entertainment market
• 1.4 The problem of digital piracy in Russia
• 1.5 Patterns of consumer behaviour and reasons for pirated digital consumption
• 2. Statement of the research question
• 3. Methodology
• Description of the results
• Conclusion
• Reference list
• Appendices
• Appendix A
• Appendix B

Background. In the new global economy, the entertainment market began to play an important role [Feiereisen et al.,2019]. The trend of shift from television and movies to series has become increasingly noticeable. In recent years, the digital revolution has created novel opportunities to consume TV content in a non-linear fashion, with viewers selecting what type of media content, namely series, they would like to watch and in what time. A recurrent trope in scholarly discourses predicts "the end of TV". As for series, the various access options made available by digital technologies are matched by the variety and quality of the content offered: major cinema personalities such as Bernardo Bertolucci have stated that the best productions they have seen in recent years were precisely series, rather than movies from Hollywood [Feiereisen et al.,2019].

The quality of series evolved, their content began to be smarter, breathtaking, and defiant. Nowadays viewers of different ages, social status, income, occupation can find any series according to their preferences. The popularity of the television series is due to a couple of facts. Firstly, they aid to avoid a complex realness. Secondly, by updating direct vital questions, they seek different answers. Thirdly, by integrating completely different people, a whole community of serial fans is born among colleagues and friends. Fourthly, each series represents a "little life", presented in a lightweight version, to be understood by every viewer. This format also has a learning function, so viewers can learn new things about various professions, politics, economics, and various processes. Among the arguments in favour of the modern series are the following: its superiority over the main themes of the movie is more comprehensive and complete. The series is a new form of epic compositions that existed erstwhile in novels and now appears on television, tablets, laptops. Proof of this is the nomination for an Emmy in "the Best Drama Series" category the Game of Thrones series - a serial epic drama with fantasy features [Rusakow, 2015].

Speaking about the scale of the impact of series not only on the entertainment sector, but also on the economy of individual countries as a whole, it is worth noting a shocking prediction. On May 20 by reason of the launch of the last episode of the final eight season "Game of Thrones" about 10 million citizens in the USA do not plan partially or completely to go to work. Such prediction was concluded due to the results of Institute of labour resources' research of the company Kronos. The impact of watching the show on the productivity of their work was recognized by 20.4 million people. According to the interest of the audience to the "Game of Thrones", the losses of the American economy will amount to 3.3 billion dollars [Maltsev, 2019].

The actor, who was one of the most important character in the series "Game of Thrones", Nikolaj Coster-Waldau speaking of the dominance of such format of media content, says: "I don't think that series dominate, but they attract the best filmmakers. The series has more space to tell the story. It may be 10 hours. You can choose a movie budget: more or less. It is attractive for both writers and directors. " There are several advantages: the duration of the episodes, narrative form, which is more suitable for modern people. Due to its narrative form, the series can offer a wider variety of plots and details. Features such as high emotional stress, dramatic and comedic elements of interweaving, make people perceive the show as real life [Rusakow, 2015].

In the industry, three major players-streaming media providers can be observed: Amazon Prime, Netflix, and Hulu [Silicon Review Team, 2014]. However, the leading position is taken by Netflix. Shares of streaming media giant doubled in price in the first half of 2018, after an increase of 390% over the past three years. Today, the audience of the most famous streaming service Netflix has 130 million subscribers. Of these, slightly less than half (57 million) are residents of the United States, and the rest (73 million) are residents of the whole world [McBride, 2018]. Slightly less than half (45%) of American families are subscribed to this service. However, the international audience of Netflix is four times as large as the American one. According to the company's forecasts, approximately 75% of the audience growth will be made from international markets [McBride,2018].

Netflix has a history of growth to put an end to all other success stories. Even despite the increase in cost by 39%, the number of subscribers also increased by 62% [McBride, 2018]. Indeed, all the original Netflix content is quite expensive. “Just as consumers loved Windows and Internet Explorer, they adore "Other people's Things", "Crown" and "Jessica Jones" from Netflix [Light, 2018].

At the moment, Netflix has three comparative advantages compared to its main rival Amazon, namely:

a) firstly, Netflix has a meager subscription fee for service. One of the company's leaders said that the cost of the service will not increase, and customers are likely to pay even less than $ 7.99 in the future. For comparison, in the US, most cable companies charge at least $ 25 a month for the simplest package of public television channels.

b) secondly, it is a multimedia. Unlike the leading cable companies Netflix does not "tie" the service to any single device. And thus, it has a huge audience reach. And the audience, in turn, does not forget that it is here that it is convenient and comfortable for people to watch everything here. It is possible to start watching serial on TV, then continue on your smartphone (somewhere away or in the street), and finish watching on a working computer.

c) finally, for users, the most important factor is Netflix' own content. Interesting fact that Netflix includes the cost of shooting series in the column "the cost of advertising campaign." For example, last year the company released the House of Cards, a powerful political drama with a budget of $ 60 million. The main role in the film was played by an actor Kevin Spacey, who won Oscar two times. All 13 episodes appeared in the Netflix service at the same time - 12.01AM on February 13, 2013.

It was a very successful experiment, as a result of which Netflix's audience has increased by more than a million people due to the series "The House of Cards". In addition, the picture won three awards Primetime Emmys and glorified the company to the whole world: due to this series the service spread to 41 countries of the world [Bondar, 2016].

Problem statement. It is essential for companies to maintain competitiveness in such a sphere and elicit key components for promotion. However, there is a huge problem for all internet entertainment service cause of illegal content, which the majority of people around the world prefer consuming. Digital piracy represents a growing threat to the welfare of both producers and consumers. While the exact loss for the supply side remains inconclusive, industry antipiracy group BASCAP estimated the income loss to range from $30 to $75 billion in such digital pirated content, like movies, software, games, and music, rising up to $240 billion by 2015 [Vida et al., 2012]. This problem is particularly acute in developing countries such as Russia. Prerequisites are related to paid content distribution history. Paid content is not an invention of the Internet era. The first television channels for which you could subscribe for money, appeared in the United States in 1973. In 1991, pay TV appeared in Russia. Steve Jobs, launching the iTunes Store, suggested that the main reason for the illegal downloading of music is the lack of worthy alternatives, that is, the lack of choice. In Russia, the service became available only in 2012. It is worth noting that in Russia paid content still does not cause delight. After blocking popular torrent trackers, mirrors of these sites continue to appear. Moreover, despite the prohibitions to download files for free, people share them on social networks. Studies conducted in the Russian Federation have revealed that 67% of citizens are watching pirated movies and series [Bondarenko, 2018]. Hence, in the modern economy, when people switched to the approach of conscious consumption of material things, it is worth taking the same position regarding digital content, that are intangible products. However, this requires a deeper understanding of the patterns of human consumption of digital content and understand what people will be willing to pay, considering the peculiarities of Russia and the mentality of its citizens. The novelty of the work is determined by the absence of researches about patterns of digital consumption of series in Russian Federation, which have become a phenomenon of modern entertainment content, as well as the study of categories that could shed light on how to change the current situation with pirated content.

Research aim. The relevance of this research is supported by the fact that in an era of transition from traditional entertainment, like television and movies to series, it is necessary to understand the key factors that make people pay for such type of digital products, as series in streaming services. Moreover, in the period when many media-services providers compete for the audience, an understanding of the attractiveness of individual companies, such as Netflix for example, becomes critical for the profitability of companies. In addition, there are currently no studies on the topic of studying the success criteria for serials, since all the attention of the authors of previous studies was drawn to the film, music or software industry. Therefore, an important action toward insight the consumers' choice of illegal sources of series the elaboration of comprehension of attitudes toward the antecedent factors impacting these attitudes.

Research objectives. The object of the study are consumers, namely people who watch series, using various sources for this. The subject of research is the attitude of consumers to streaming services and pirated digital content. Firstly, we are going to conduct both basic and applied research. Basic research, because in our study we have the opportunity to expand the results obtained in previous studies about digital piracy and the consumers' attitudes based on socio-cognitive and social demographic indicators. Applied research, because in our paper we state the research question about the impact of specific factors on the customers' choice and we need to find the answer that has direct application for the governments and companies in the entertainment industry. The goal of the research is to match key attitudinal factors to the choice whether of legal streaming services, or illegal digital pirated content's sources with the help of a questionnaire. We conduct online-survey among citizens from 18 to 44 years old since this is the most active audience in the sphere of consumption of serial content [McAlone, 2017].

Secondly, we have the explanatory purpose of the study. In our study, we are going to carry out several actions to confirm or refute hypotheses that it is a set of key components of paid services such as value for money, accessibility, quality, as well as other tangible and intangible motives of people, and, opposite, certain personal advantages of using pirated content, which may have pressure on the viewer's preference and subsequently the company's sustainability on the market on the example of young and mature citizens in the Russian Federation, constantly searching and processing new information, statistics, studying and analysing new objects and databases.

Practical significance. Received results of the study may be useful both for large companies in the sphere of entertainment, for instance, music, movie, book industries, that are currently losing their customer base and profits, and for those who want to eradicate or at least reduce the level of piracy in Russia, which at the end of 2018 was the second in the world in this ranking. This is of key significance for companies based on a business model that is built on transferring the right to view content, and suffering from pirated content, because the capacity to clear up what truly attracts users and makes them look for paid content or, on the contrary, pirated products, can be crucial for their successful future.

To reach the aforementioned aim, the following tasks have to be attained:

a) to examine literature about specifics of serials, reasons for their success, competition arising in this market and to recognize the available methods in different researches about digital piracy factors;

b) to study detailed information about key factors that influence viewers' preference;

c) to analyse existing tools for revealing such factors of consumers behaviour patterns in different entertainment content (music, movies, books, games);

d) to develop the methodology of the research in detail (questionnaire);

e) to carry out the survey of digital piracy factors in the field of series in Russia, employing come of the most popular socio-cognitive models;

f) to discern the factors impacting the aspiration to watch series whether through streaming services, or illegal sources of pirated content in Russia;

g) to develop recommendations for applying the results for companies that would like to improve their products on the market and keep copyright in the future.

To complete the research tasks, the following tools will be used:

a) the information for conducting a literature review of prior research in the field of digital piracy and influencing factors will be used from sources of scientific and periodic information, statistical information from electronic sources, including websites;

b) to conduct statistical analysis to further identify factors affecting the consumer choice of viewers in the direction of pirated content, or paid subscriptions in Russia, the IBM SPSS statistical program will be used;

c) for the collection of statistics and information, sources such as information databases of EBSCO, Elsevier, Emerald, Springer, or academic search engines like Google Scholar and Web of Science will be used [Droznina & Filimonova, 2019].

Thus, the structure of the bachelor thesis includes the following points:

1. The Literature review

2. Statement of the research question and methods of empirical research

3. The results analysis

4. Conclusion and managerial implications

This structured research structure assists in the fulfilment of the tasks set, the achievement of the paper's goal and in the clear and understandable presentation of the data obtained during the research.

1. Theoretical foundation

In the following sections, we look at the implications of the digital technology's development on society, habits and the film industry. The changes resulted in a rapid increase in the popularity of series and the emergence of a unique audience of viewers and the appearance of new business models. We explain what factors have ensured such a rapid growth in the popularity of series in the last decade and what the "Netflix effect " is. We also discuss how technological development has already generated such leaders of its industry as Netflix and Hulu, and how sharply the competition in this industry is growing. However, this development has led to widespread digital piracy. We are also examining studies related to statistics on digital piracy in the Russian Federation and the reasons why it occupies one of the leading positions in countries with the highest level of piracy in the world. Also, one of the sections is devoted to previous research on digital piracy in the field of various media content, most often based on psychological models.

1.1 The shift in popularity from movies to series

In modern society, the mass media is an important part of social life and take a huge amount of time in each of people every day, albeit in conjunction with other routine activities [Ilmukhin, 2016]. New technologies of communication appear, unique patterns of people behaviour in the media are developing. Movie industry has undergone tremendous changes. The latest achievement is the extraordinary growth of the series' culture. This form a psychologically new audience, which differ from each other by social status and age [Rusakow, 2015].

Now it is important to emphasize that in addition to the fact that modern series are extremely trendy, but they are also extremely profitable. In the history of the economic, political and aesthetic the rapid growth of the development of serials, which has been observed for several years, can be attributed to the simultaneous development and emergence of the unique features of new communication technologies. This concern, in particular, the changes between films created for cinemas and series created for certain types of television. A few decades ago, the main part of the series was considered secondary in comparison with large cinema. Thus, there are many reasons why the cinema has shifted towards an entertainment show with impressive special effects. The first is probably related to the sharp growth of the video market, which is convincingly confirmed by the colossal budgets of the new series, the cost of which episodes reaches more than $ 3 million. The work of traditional channels in the "era of television development" has changed a lot because streaming services are coming. According to statistics, the average budget for an episode of a drama series now is 5-7 million dollars. Episode half-hour series costs from 1.5 to 3 million dollars. Netflix established primarily new standards. For instance, Netflix released the mystical series "Stranger Things", the first season of which cost $ 48 million (6 million per episode), and the second season - $ 64 million (8 million per episode). Another hit of the service - the series "Crown" - Netflix is worth $ 10 million per episode. TV market players fear that Netflix, with its dizzying contracts and budgets, will simply throw them overboard. But Netflix is far from the only market aggressor. Spending of Amazon exceeds $ 8 million for each episode of series. In response to this cable channels have to spend enough money. "Heavyweight" channel HBO channel "World of the Wild West" is in the same weight category with the series "Crown". The series "Game of Thrones" with its budget of $ 15 million for an episode in terms of expenditure looks more like a high-quality full-length film than only a series. And "Game of Thrones" has become a real flagship of the channel and all cable television. Netflix Vice President of Original Content Cindy Holland is confident that prices for series production will increase as the projects become longer, more ambitious, and more technically sophisticated and complex [Cheragin, 2017].

The second reason is related to the explosive development of technology. The third reason is a change in what can be called media behaviour. Nowadays, there is an opportunity for watching very high-quality videos at a convenient time, to be a viewer not of a television channel, but of a separate program. At the same time, the new nature of the consumption of video content causes sharp conflicts related to copyright and piracy of video. The audience makes a huge demand for free consumption of content that only the Internet can provide. This demand creates supply. The fourth reason for the change in the relationship between cinema and serials is that modern media, because of the fragmentation of consumption, lose the sense of belonging that people have when they consume the same product at the same time. Cinema due to its size, technical equipment and service is reborn. Browsing at home is an individual practice with a different behavioural pattern. The viewer does not know who and when watched or will watch the series, consumption is often delayed. Thus, changes in market conditions and the formation of new patterns of audience behaviour have led to the fact that the genre, previously considered secondary to large cinema, has intercepted the initiative [Bystritskiy, 2014].

Traditional TV was conceived as an active object with significant value. Therefore, it is reasonable to expect that switching to digital devices will have complex social and cultural implications, because of which viewers will revise their habits of TV viewing. Indeed, a recent study by the Consumer Technology Association shows that young people between the ages of 18 and 34 now watch more content with a shift in time on the Internet than direct television, which specifies that youth stimulates the consumption of digital content with a shift of time. In addition, members of this generation are active users of multimedia, and digital devices play a significant role in their socialization processes. Digital television is one of the manifestations of consumer digital property growth. A virtually unlimited selection of series can be viewed anywhere and anytime using a variety of technology devices and online video services such as YouTube or Netflix. Objects of digital consumption do not have a long-lasting material substance, but exist in electronic media mediated by computer, and can be accessed and consumed with the help of combinations of hardware and software. This definition emphasizes the role of physical objects in supporting digital materiality. This conceptualization of digital consumption objects accurately reflects the ontological changes that have occurred over the past decade in the consumption of television series as a result of the digital revolution. Television as digital multimedia can be understood as "non-site-specific, hybrid cultural and technological form that extends across multiple platforms" [Feiereisen et al., 2019].

Innovations in the media system, associated with the higher speed of information distribution and the development communication technologies, not only changed the status of series in the entertainment industry market, but also launched a mechanism for large-scale changes in the media market. All business is customer-oriented, but according to Altimeter consulting company, leading media companies put the audience at the head of the changes. They begin by examining these "digital footprints" in order to understand which technologies, resources, and investments are priorities. Harvard University School of Business Professor Clay Christensen offers an approach that should focus on client values [Ang, 1991]. Media consumption in the conditions of digitalization is described, primarily, by the multi-channel and multi-platform access to information, the non-linearity of consumption, resulting in audience fragmentation. New information and communication technologies are changing the format of consumer and media relations in the direction of interaction, due to the property of online communications - interactivity. As a result, the ability to choose the channel, platform, time and place of access to information made digital media consumers active [Vyugina, 2016].

1.2 Series as a phenomenon

consumer streaming digital piracy

A series is an art or documentary film, consisting of many episodes and intended to be shown on television. Each series is framed as an independent unit of a huge story with its own continuation. Groups of heroes appear from week to week, allowing you to broadcast the story as a somewhat parallel adventure with many variations. Each hero works out several directions. Each action is made up, on average, of ten to fifteen episodes [Popova & Romah, 2008].

Today, the series is a phenomenon of mass culture, and the favourite brainchild of the television industry, and a way of life for millions of viewers. Since the advent of series, they have occupied a special niche on television, having won a significant chunk of the airtime of the channels [Denisova, 2012].

Such importance in popular culture is due to a number of reasons. The social significance of series is extremely high, as they allow to carry out certain ideological guidelines, postulates, and thereby influence the consciousness of the viewers. On the one hand, the series can be considered like a mass culture phenomenon, and on the other hand, it is a tool for influencing real life. A survey of respondents conducted in previous studies to the question "How do you think television series are an important component of modern popular culture?" showed that 54% of respondents answered that television series sometimes matter, 31% of respondents believe that television series is an important component of modern popular culture, they form the values, behaviours necessary in modern life, and 15% suppose that series is partly important. In the course of the study, it was found out that none of the respondents considered television series to be of any importance [Popova & Romah, 2008].

According to various sociological surveys, over 70% or 100 million Russians spend their leisure time on series [Denisova, 2012]. The phenomenon of the popularity of series in the modern world is also due to the psychological characteristics of people. All people have such series that they continue to watch, postponing their duties and sleep patterns for later. This type of dependency is associated with the availability of non-commercial, high-quality and original television content. Statistics have shown that generation Y (currently between eighteen and thirty-four) and generation Z (people born after 2005) use not only Netflix, but also various streaming services to quickly watch series. At the moment, viewing means quite quickly acquiring several episodes of serials using streaming services at once. According to Raju Mudhar, "Entertainment quickly turns into a buffet where you can eat everything. Call it a Netflix effect." According to statistics, not only the interest in certain series drives teens to view them, but also the desire to comply with a certain social status. Since thanks to the series, participating in discussions, a person can feel their affiliation and involvement in the community. A very important characteristic of the increase of the serial phenomenon is the lack of advertising provided by various streaming services. Another factor that makes you addicted to watching revelry is the emotional involvement of viewers in the show they are watching. In an interview with the New York Times Tara Sorensen, head of the original programming department at Amazon Studios, told: "Children live in the world on demand and expect their shows to be watched not only on television, but everywhere: online, on mobile devices. " [Matrix & Sidneyeve,2014].

1.3 Competition in the entertainment market

Rapid technological innovation over the past 10 years has broken the unprecedented spread of entertainment. Taking advantage of the change in everyday habits caused by technological advances, which included the constant use of such techniques as laptops, smartphones, tablets, companies created new business models to change the patterns for which the audience consumed entertainment. Recently appeared companies, like Netflix and Hulu, have grown through the use of the Internet as a platform for distributing films and series, reducing their costs by diminishing tangible materials. However, they can offer customers a wide selection of series and films that meet both popular and niche requirements. These new companies provide a wider range of content for consumers who have previously had some barriers to watching it. Instead of delivering a package of universal television stations or offering only expensive large commercial content, they have a catalogue which also contains unique films and performances that have been previously nowhere. Netflix and Hulu set low subscription prices, which negatively affects the ability of cable companies to compete. Currently, Netflix and Hulu are leaders in the distribution of online content [Aliloupour, 2016].

In 2018, Netflix took the 66th place in the rating of global brands according to Interbrand. And also included in the list of Top Growing brands [Interbrand, 2018]. Competing with Blockbuster, it allows consumers not to waste their time and conveniently get access to movies from their own home. Due to the format of instant viewing, Netflix yet in 2007 had changed the mode of distribution, which gives viewers the opportunity to watch media content directly on their computers. This feature has become a major source of revenue by serving 40 million subscribers. For a $7.99, which is constant for the billable period users get access without any limits to all content. The rapid success and development of the company in a relatively short time marked the beginning of the production of its own unique content [Aliloupour, 2016].

New players are also constantly appearing on the market. For example, according to the Wall Street Journal report, Apple plans to create its own streaming service with original content. "The whole world of communications, entertainment and television is changing and converging," said Jeff Kagan, an independent telecommunications and media analyst. "We will see how many companies go into space in the same way. Some of them will be successful. Some of them won't. These are only the first days." [Fung & Brian, 2017].

1.4 The problem of digital piracy in Russia

In the media at various levels, the problem of Internet piracy is designed as a real threat to national security. In public discussions, the pros and cons of Internet piracy are discussed. The agents of the information market are sounding the alarm about the economic costs, the ethical side of the problem, call for responsibility and elementary consciousness, while ordinary participants in the Internet space continue to use "torrents" every day, not considering specific grounds for panic in their actions [Covadin & Fofanova,2016].

The process of illegal distribution and copying of intellectual property in the media space is called digital piracy. This type of piracy originates from the moment of the appearance of digital copyright objects and is conditioned by a number of reasons:

a) imperfection of the regulatory framework: in 80% of cases, criminals avoid punishment for copyright infringement;

b) criminalization of business, interest of financial groups in the existence of a shadow market;

c) mentality of the population: 90% of Russians consider the option of illegal download, and not a purchase, as the norm;

d) inconvenience of payment procedures;

e) the availability of pirated copies, the ease of obtaining unlicensed content;

f) the lack of a fundamental difference between licensed and pirated content: visual and functional;

g) unfair pricing policy.

This list would be incomplete without the inclusion of such an aspect as the degree of development of the national economy. In other words, the level of piracy in a particular country is inversely related to the position of the national economy. The logic is simple: the level of information culture of the population depends on the level of average wages in the country and, accordingly, the digital entertainment content market is less controlled by pirates. According to experts, the share of digital pirated content is highest in such countries as Armenia, Georgia, Zimbabwe and Bangladesh, where it reaches 90%. Russia is no exception: 70% of media content is pirated. Thus, to date, two polar points of view have emerged about the role of digital piracy for the entertainment industry in Russia: some are in favour of unauthorized digital distribution, others for its abolition. The voices of major copyright holders are the loudest: Mann, Ivanov and Ferber publishing houses, Microsoft Russia, Kaspersky Lab, Gala Records and other lobby organizations, government officials and content producers. They are opposed by the community of Internet users, for whom copying does not constitute an offense, rather the usual rule [Molchanova & Hryseva, 2013].

Copyright is often violated and continues to be violated to the present Russia, unfortunately, remains among the countries - leaders in the production and consumption of pirated products.

The main causes of the emergence and spread of this phenomenon:

a) the economic aspect implies a financial inability to purchase due to the low material standard of living of the majority of the population. The brightest examples of this facet are the third world countries and Russia;

b) state censorship and limited market. Restricting the sale of certain types of media products contributes to illegal methods of their distribution;

c) the psychological aspect significantly influenced the initial formation of software piracy as a cultural phenomenon. You can talk about the specific mentality of the Russian people, due to the peculiarities of the Russian character, customs, and traditions. In addition, the emergence of restrictions on the use of foreign intellectual property led to the substitution of psychological concepts;

d) the historical and cultural aspect is connected with the state policy. All film studios were state-owned, and the budget of each film was paid by the state. After the fall of the USSR, the production of films fell into private hands. With computer software, the situation in our country was unique in its own way. At a time when the software was protected as intellectual property in America in the 1970s, nobody in the Soviet Union thought about it.

Returning to the topic of media content sources, we must pay tribute to torrent trackers, which are the largest and most universal sources of free content to date. With their help, anyone can download anything for computers for non-commercial use. Many people simply can't imagine their life without such an opportunity that they can use for free. It should be noted that nowadays a culturological shift is taking place all over the world in the direction of the fact that the Internet itself is becoming a comprehensive source of content that meets the different needs and tastes of people [Tolmachyov, 2010].

On the topic of patterns of user behaviour, some surveys were conducted both in the territory of the Russian Federation and abroad. It has been revealed that a user often downloads content because it is possible, and not because they are planning to consume. In this case, real consumption does not occur, and to expect material compensation for missing consumption from the point of view of the concept of substitution is inconsistent. This means that if the use value of digital content exceeds its market value, the user will prefer to purchase it for a fee, even if illegal versions are available. In the opposite case, if the use value is lower than the market value, then the user does not plan to acquire authorized digital content at all, regardless of the distribution of pirated resources [Covadin & Fofanova,2016].

In a Russian study on piracy, practical observations were also obtained. The empirical object of the study was the youth, since this social group is the most active user of the Internet, has fairly homogeneous interests regarding the products obtained through the network. The obtained data were consistent with the data obtained by WCIOM, which revealed that films are in second place for downloading. They are downloaded by 66% of respondents. It was found that men download films more often (82% versus 50% of women). As a result of the study, it was found that the most youth resorts to pirated methods of getting media content, treat such practices positively or neutrally, but know about responsibility. This trend has psychological and economic as well as cultural background. Moreover, an important factor is the Internet space itself, in which, due to its virtual specificity, the laws and rules of the material world do not always work, because There are no clear boundaries between the legal and the illicit [Covadin & Fofanova, 2016].

1.5 Patterns of consumer behaviour and reasons for pirated digital consumption

Digital piracy is a global phenomenon - heavily normalized in many parts of the world. The internet has facilitated widespread illegal downloading of copyrighted media and, in particular, music [Brown, 2014]. At the moment there is a serious threat of piracy of copyrighted media content due to the rapid development of the Internet and digital compression technology [Morton, 2004]. However, the pirated version provides a lower benefit to its users compared to the original licensed version. In this sense, the pirated version is almost always a lower quality product [Lu & Poddar,2018].

In the last 30 years, computer technology, especially the Internet, has seen two diametrically opposite in scope but interrelated phenomena. According to statistics, this industry loses billions of dollars every year due to software piracy. Moreover, at least one illegally downloaded application is listed on 75% of computers, while in the world more than 20% of the Internet bandwidth is for pirated purposes. For example, in the US, 20 million users download content through illegal distribution sources, while only 7.7 million Americans use paid subscriptions for this [Petrescu et al.,2018].

According to the evaluation of the international association of software manufacturers BSA, Russia is among the countries with a high level of online piracy. According to this association, the degree of copyright violation through the Internet in Russia is increasing every year. So, for two years from 2013 the addiction to illegal software increased by 2%, unlicensed software was 64%. The cost of this intangible theft has major consequences for the economy as a whole. The influence of internet piracy on the United States economy is measured as $58 billion lost across all industries. This poses the question, why do consumers find it easier to violate moral rules surrounding intangible items than tangible? [Eres et al., 2016].

The audience today is one of the main objects of media research. It is of great interest from a practical point of view, since the study of consumer behaviour, desires and opportunities contribute to the improvement of work and the development of media. The media system has changed dramatically because of new information and communication technologies: an audience of a new type is gradually being formed, which is characterized by updated behavioural models.
From audience to media consumer: transformation of the concept of an audience in media research [Vyugina, 2017].

Among all the research, digital piracy has been more and best studied in the music industry. For our analysis, we selected some of them. Assuming a psychological perspective, S. Brown [Brown, 2014] in his study about music piracy considers why the connection between musical engagement experience and music piracy and in USA, UK and Australia. The online questionnaire consists of such points as demographics, questions about music engagement, music-technology identity, uses and gratifications, personality measure, importance of music in life, attitudes towards music piracy, indication of the most popular mode to listen to music. The author states about the relationship between the uses, which is perceived like the most favourite mode and piracy attitudes. S. Brown used the generalized linear mixed method and supported the hypothesis about the impact of psychological concepts on piracy attitudes. Additionally, he partially supported the hypothesis about the relationship between the uses and piracy attitudes, when the favourable attitude towards piracy is related by value for money dimension. It was discovered the relationship between male gender and positive piracy attitudes. Therefore, obtaining results proved that one of the most important factors impacting the more favourable attitude to music piracy is the conception because of which consumers would not buy music because of poor quality for money, rather than a reluctance to pay generally [Brown, 2014].

In another paper researchers tried to analyse consumers' attitudes towards online piracy and their willingness to try subscription-based music services in music industry. They used an attitude-intention model, which included ethical considerations. Three main factors of attitude were the basis of this research: hedonic benefits, economic benefits and moral judgment. Italian consumers participated in the study to comprehend their attitude toward online piracy. As a result, the following findings were obtained: moral judgment limits people in engaging in digital piracy, while economic and hedonistic benefits push people to the contrary [Ludovica et al., 2014].

The next study tried to fulfil the research gap in researches which explored the psychological factors that make students to consume music from various channels, illegal and legal. This survey stated certain research questions about the relationship between subjective norm, intention, music acquisition attitudes, perceived behavioural control. Also, researchers would like to understand the importance of the price of legitimate music, perceived benefits of piracy, perceived the likelihood of punishment in shaping their music acquirement attitudes. Finally, to check the impact of sociodemographic variables on choice. In this paper, researchers conducted a quantitative study among 200 university students in the United Kingdom and Greece. The questionnaire consisted of three blocks. As a result, it was recognized that females are more afraid of punishment than males, so they are less involved in digital piracy. The essential difference between the wealth of people and their choice in favour of piracy was also determined, so people with less income are more involved [Dilmperi et al., 2017].

This paper elaborated a research model to investigate preceding factors manipulating individual attitudes in the direction of music piracy. The fundamental conception of this survey based on the theory of reasoned action. To get the results, it was necessary to collect university students' opinions on various beliefs regarding digital piracy and summarizing their estimates. The model has also been complemented by factors such as perceived inequity, behavioural beliefs, and outcome evaluations. Currently, the research is at the pilot stage. Results will be obtained using multiple regression analysis [Morton, 2004].

The second half of the digital piracy research focused on software and games. The research was aimed to examine perceived adverse outcomes of practicing piracy as drivers of users' attitudes and their behavioural aspirations. In the study researchers concluded that two sets of perceived consequences for people and also for society on the whole - moral intensity and for individuals - perceived risk proved to directly (negatively) affect attitudes to piracy with moral intensity also significantly affecting a person's tendency to pirate in the future. Moreover, attitude is a significant predictor of behavioural intention and the issue involvement exhibits a salient alleviative effect on the relationship between intention and attitudes. To obtain data, consumers who are citizens of Slovenia received a self-managed mail survey. It was used a confirmatory analysis with LISREL and Cronbach's alpha to check the validity and reliability of the measurement items. With respect to perceived consequences of digital piracy for society, they found that consumer perceptions regarding the moral intensity of unauthorized downloading have a significant negative effect on both consumers' overall their intention and attitudes to digital piracy. Further, the analysis confirmed he role of attitude as a significant predictor of intention to pirate [Kos Kokliи et al., 2014].

This paper is dedicated to the investigation of internet users' perspective in digital games piracy. In this research such factors, which can have an impact on consumers' choice, were chosen: social factors, habitual conduct, self-efficacy, moral and affect judgment, facilitating conditions. The first goal of this survey was to regard the connection between six antecedent factors and attitudes to practice piracy in the field of games. The second goal was to explore the connection between internet users' attitudes and their intention to perform illegal activities in the use of games. An intercept method was used at an Australian university to achieve ecological validity during the process of collecting data. In total, 206 surveys were completed. As a result, only affect, moral judgement and self-efficacy have a significant impact on attitudes towards downloading pirated games. In summary, there are three strong characteristics of "downloaders" in digital games piracy. First, those individuals have a strong affection to download pirated games. Second, those individuals do not feel guilty about practicing such illegal activities as they have low moral judgement. Lastly, those individuals have a high coefficient of self-efficacy to "crack" the pirated games [Phau & Liang, 2012].

The next study studied digital piracy in developing countries, where low average incomes and high unemployment rates are particularly vulnerable to digital piracy. That is why society endorses the practice of software piracy, even though stealing tangible goods is considered illegal. Therefore, the purpose of this research was to examine the antecedents of consumers' attitudes towards digital piracy and intentions to pirate digital products among university students in Indonesia. The most commonly used predictors were factors from the theory of planned behaviour, ethics theory, deterrence theory. The results supported that attitude is related to the intention. As a result of the analysis, it was found that such factors as perceived behavioural control, attitude and intent towards digital piracy are interrelated. Another link has been found between perceived benefits and consumer attitudes towards the practice of piracy. However, at the same time moral obligations negatively influence a person's attitude towards piracy. Overall, the results demonstrated that, in the context of Indonesia, consumer's attitude had the strongest effect on consumer's intention towards digital piracy. Moreover, moral obligation had the strongest effect on consumer's attitude towards digital piracy. Therefore, the most potent ways to resist digital piracy is by changing in consumer consciousness and diminishing perceived behavioural control. The surprising fact of research in Indonesia was that consumers are not afraid of the likelihood of punishment and legal consequences [Arli & Tjiptono,2016].