Every time I listen to my Ipod I remember Napster.
The record industry treated Napster like the Taliban of Piracy – they sued, fought and closed it down.
But wasn’t Napster actually ‘iTunes’ way before iTunes really came on the scene?
What would have happened if the Music Labels – the Virgins, EMIs, etc., had gotten together and invested in Napster or just bought it outright and made it their industry ‘digital music’ distribution channel? A Sony ‘walkpod’ a la iPod would have complemented the business: The music guys cranking out music, and the hardware guys making the stuff to play it on.
The moral here is that piracy needs to be understood before it is fought. Ask me about it: I run a casual games company that produces 15 games a month and has a library of over 350 games. So far, I know of 8900 websites that have stolen or as they politely say ’scraped’ our games.
Honestly, after the initial shock, I am quite glad about the situation. It proves that what we create is valuable – since only valuable things get robbed. And we have creatively leveraged piracy to help us succeed. More on that below.
Recently, I asked a 13-year-old teenager if she would ever walk into a CD store, lift a CD from the shelf and take it home without paying for it. She clearly said that she would not. Yet the same girl was zapping MP3s and singles to her friends across the web… when I explained to her that she was actually ‘stealing’ – she just didn’t get it.
Piracy is the new consumer ’speak’ and ‘do’, and it’s here to stay. Like it or not, piracy or not, music and all forms of entertainment is going to be zapped all over the world without any restrictions. It’s the job of the industry to capitalize on it rather than squander it away.
This is what is good about Piracy and the Pirates behind it and where value possibly lies:
- Piracy creates economies of scale-
Distribution by agencies and companies is history. Consumers distribute content amongst themselves – leading to almost tsunami like waves of consumption and distribution. So, in effect, the cost of digital entertainment is actually reduced, thanks to the non-hired help.
Creators can price their wares very aggressively given this new economic dynamic.
- Piracy creates democracy-
It’s no longer a chance meeting with a music czar or a gaze by a producer at a bar that creates stars today. Digital distribution is the ‘lowest common denominator’ that anyone with creativity gets noticed and famous. Pirates are the best advertising agents out there. And they come for free.
The stars in the making need to partner with this global tide rather than fight it.
- Piracy creates innovation-
The big gaming-console companies did not succeed in markets like China due to rampant piracy. Their game CDs were copied and sold in the black market. They felt cheated and held back. That created a massive vacuum in the market that was filled by the online game companies that created games that were meant only for the browser that required subscriptions and virtual goods purchases. This was the stepping-stone to games like Farmville and Mafia Wars.
How to win
It’s painful to be robbed of what’s yours. Yet if one thinks beyond the hurt, there may be a bigger opportunity out there.
- Upcoming artists now make more money from concerts and live appearances than selling CDs. Pirate marketing is the new currency of value. They tell fans about new bands without spends on ads. Pirates can be the new career launchers.
- Shouldn’t the big music companies still create a competitor to the iPod and iTunes?
- Make everyone in the eco-system win. Our secret sauce to leverage piracy was something called ‘inviziads’ – we placed invisible ads in our games that went with our games when the pirates took them. These ads automatically become visible on pirate websites. The interesting concept is that the content remains pristine. The consumer wins (gets content without paying), the pirates win (become popular thanks to evergreen content) and we win (thanks to the ads in the content).
The next battle starts when the e-book readers like the Kindle begin to get high penetration. Original books, new and old, will begin getting zapped across friends and families. Authors, publishers and booksellers will be on the receiving end of the tsunami – they will not be paid in this round. Let’s see how many of them try and fight the flood and drown vs. those who swim with the tide and survive and win with innovation.
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November 4, 2009 at 4:21 am
Sanjay Mehta
Well, you are talking the language of “Free”, Chris Andersen’s book.
The reality of the day.. !
November 4, 2009 at 5:53 am
Deepak Singh
Hi Alok,
Buddy, a good post, as usual
But, I agree to disagree with you on several counts. Piracy mostly affects the sectors where the final product is an intellectual property and comes without a touch-see-feel for the consumers, unlike physical products. In the case of manufacturing sectors and physical products, a pirated make is called “fake” which is a look-alike and may give similar end results. But, their durability and overall experience may be strong factors why fakes won’t work.
In creative and intellectual sectors, pirated products are carried on some media, including online, and those can have have some touch-see-feel. But, here, fakes or pirated stuff may work for the end consumer in the similar way as the original and, therefore, may harm the business interests of the promoters. It can be further categorized in two categories.
While piracy in a gaming product or a software can be checked, tolerated or even exploited by the promoters to a positive end result, as you’ve indicated, some products and companies are actually finished by the pirates. As, you’ve cited the example of InvisiAds, the pirates actually helped you. Then, taking it to level two, you can pull your game-lovers to play it online. Further, gaming is kind of addictive product, just like softwares. Gaming and software both have continued repeated usae several times by the same user. And, once a user, gets used to a particular software or game, s/he may have several reasons to upgrade himself to the original version of the game or software. They most likely will go on to purchase the original game/software, if not the present version, then the next version of the same, after their experience with pirated product vs. the love for the product. So, piracy may to some extent have a positive impact on the business in cases like yours.
At the same time, coming to piracy of mainstream films, books, publications and music etc., it has a lethal impact on the business to the extent of finishing the company forever. A good film, music or a book by a prominent author costs humongously to the producers and publishers. Now, the issue is, in 99 out of 100 times, these books and films have a one-time usage value. Implying that once you’ve watched a movie or read a book, the utility is over. Even a pirated music product gives almost similar experience as the original. The quality loss with portability in music is neglected by the common users and they do with the pirated stuff. At the same time, pirated films don’t come with the same experience. Yet, as it is just one-time watch and, if it’s not one of the mega movies, if you’ve watched the pirated video, you’re fine with it. In case of books, the experience is as good as the original as it has got to do with texts and images which is generally okay as long as you want to read a book and yet not spend for paying the efforts of the writer and publishers.
So, while piracy can be tolerated to some extent in your industry, I, as a film-maker, see it as the biggest threat. Yet, every industry and market work in tandem to make things happen and surmount these challenges, leading to continuous innovation. We just hope piracy doesn’t kill some industries.
Piracy can help a budding singer, actor or writer to showcase his/her potential and talent so that s/he can make it to the big league. But, when the big league itself is under threat, the budding ones may land in a “no man’s land” following a good following to their small-time showcases getting good notice.
Maybe we are then left only with small-time projects which may though be good in concept but weak in execution due to industry being under threat.
Not being pessimistic, just sharing my concerns. I remember, over a decade back, fashion giants like D&G, Lacoste and Lee all, in spite of their worry for fakes, voiced together that they could tolerate fake as it made them realize how popular they were so that they could take their product innovation and quality to next level, letting the gray market thrive on fakes of residuals.
Therefore, as a blanket, we may not say it’s equally tolerable for all the sectors and industries.
Thanks
Deepak
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Read MyBlogs:
“Aladin’t or Euthanasia?” http://passionforcinema.com/aladin%E2%80%99t-or-euthanasia/
“WHO IS TO BLAME?” Introspections by a young movie-maker. http://passionforcinema.com/%E2%80%9Cwho-is-to-blame%E2%80%9D-introspections-by-a-young-movie-maker/
November 4, 2009 at 5:58 am
rodinhood
Deepak,
Very good points, and all are valid.
The idea of this post was to invoke almost a catharsis of what’s happening to stake holders across the business ecology – and sure, not be able to offer a ‘one size fits all solution’. Having said this, the moot and dark looming question is going to be – do we change our business thanks to piracy that will never go away?
I refer to the Sony/Microsoft guys whom I have used as an example in my piece – they ‘pooh pooh’d’ piracy in China, went after pirates with the police etc etc…
Quietly on the side, Vivendi and War of Warcraft took away all the business and the moneys…