Piracy – Or How To Ruin An Industry

There has been a lot in the news lately about the trial going on regarding popular BitTorrent tracking site, The Pirate Bay.  Currently, the Swedish court system is determining whether it is illegal to provide a service that merely allows users to point other users to [possibly] copyrighted material without the rights-holder’s consent.

Much is to be said about this broad topic, and whether or not The Pirate Bay is simply providing a service, and not discriminating against nefarious use by its users; or whether they are running a business that continues to profit from the undermining of the MPAA and RIAA profits.

If one thing is clear from this trial, it’s that the industries are wasting their money.  Not only has the prosecution had their collective heads up their asses during this whole debacle, they have proven time and again that they not only do not have evidence one way or the other, but also that they refuse to hire legitimate, well-rounded “expert” witnesses who have done their homework.  Way to further dwindle your profit margin there, big industry!

This whole trial is diverting the public from the key point in the “illegal” file sharing mindset: If it is easier to pirate your product than to legitimately purchase, you are doing something wrong.


I’m sure I will be getting a lot of flack in this article about the generalizations that I am making.

There are always the people who will pirate anything they can, whether or not it is easy enough to purchase a legitimate copy.  I am going to ignore that group of people to make my point, so just think of them as a caveat to this little rant.

Before I get into the meat of my argument, I’d like to touch on the people I think are getting it right.

Who Is Doing it Right?

Valve

Valve Software is the creator of the Half Life line of games, and is responsible for launching the Steam platform which allows large game developers and independent developers to distribute their games easily to a wide variety of consumers.

The Steam platform is a fundamental shift in the distributed material paradigm.  Steam allows users to access purchased games from anywhere in the world, without having to lug around physical media in order to install.  This means that a Steam user could have an entire virtual library of games, and not have to worry about scratching a CD or DVD, and also not have to worry about the process of installing and uninstalling games, or connecting to other players across the world for multiplayer gaming sessions.

The reason that I think Valve is doing things right is simple: I’m buying games.  Games that I’ve owned before on CD/DVD, I’m buying second copies from Steam, just so that I can have the portability and ease of install that comes with the platform.  Games that I might have otherwise pirated are well within my price range, once factoring out the costs of manufacturing and advertising.  Games also have deep discounts during certain promotional activities, making the prices just right for my consumption.

And one unforeseen benefit of using Steam as a platform is that I am exposed to new games from lesser-known developers, and I have a chance to purchase multitudes of games at a price point of $20 or under.  I don’t have to leave my chair to waste gas and pay twice as much at a brick and mortar store in order to get my gaming fix.

Valve gets it.

Nine Inch Nails

Nine Inch Nails is a cutting edge band, which understands the market of their listeners.  Rather than fighting the piracy that is bound to happen with any release of artistic materials, they have embraced the file sharing market whole heartedly.

Nine Inch Nails released their album “Ghosts I-IV” for a $5 download price, with several other low-cost alternatives.  Selling over 36 tracks for only $5 is unheard of in music, and the sales numbers surely reflect this.  Though they shunned the traditional release methods, they came out on top in both sales numbers and their image of their fans as well as new found fans from this drastic measure.

After Ghosts was released, they released a full album for free entitled “The Slip”.  You might expect a free album to be a collection of crappy tunes that didn’t make it into other releases, but this album is a true extension of their discography and is worthy of any price point they could come up with.  But the fact is it was released for free.  I’m not sure if you catch the impact of such a measure, but they didn’t have to pay anyone for advertising, there was no middle man, just music coming straight from the artist into the fans’ hands.

Not only did they do all of these revolutionary things with their latest music, they also did something unheard of: they released them free of charge through BitTorrent.  But wait, I thought BitTorrent was evil?  It leads to the degradation of the human condition by taking the money out of the poor artists hands and placing it into the hands of terrorists and gangs.

In addition to releasing their music over BitTorrent, in January they released over 400Gb of live footage for fans to remix and release as they please.

Nine Inch Nails gets it.

Who Is Doing it Partially Right?

Adobe

Adobe is the maker of insanely popular audio/visual tools in their Creative Suite line of products.

The insanely high price of their software is well worth it, but the fact remains that someone who is looking to learn how to use their products for a future professional pursuit cannot justify paying thousands of dollars for software they haven’t touched yet.

Though Adobe doesn’t condone the piracy of their products, they have only passively taken action against pirates.  They change the activation methods, thereby rendering pirated registration codes unusable.  This does not stop the pirates dead in their tracks, but only strengthens their resolve.

Even at the prices for an educational license, poor college students aren’t able to work it into their budgets to buy this software, meaning that though schools are teaching how to use the software, students can be put off by the product, potentially losing sales.  The 30-day free trials of these enterprise software suites are nice, and they are fully functioning, but the fact is that you cannot learn an all-encompassing software product such as Photoshop in 30 days, unless you are taking anti-narcolepsy medication.

But, if you factor in the passive moves against pirating, you will see that by not actively pursuing pirates, Adobe is creating a way for people to learn to use the software before actually purchasing their product.  This is invaluable market exposure, and leads to more sales in the end.  Having a full-fledged software product to learn for free, then once you have learned how to use it, buying the product for commercial pursuits is invaluable.

Adobe almost gets it.

The Fallacy of Lost Profit

The big media companies want to have you believe that each time an album, movie or game is downloaded, they lose money.  You are a thief when you download copyrighted materials because you would have absolutely purchased the material had it not been available online for free.

The truth is that there is no correlation or direct relationship between downloads and lost profit.  None.  There is absolutely no way to prove that every single person who downloaded Twilight would have purchased a DVD of Twilight given the opportunity.  This is simply myopic thinking.  This kind of generalization is a disgrace to the human brain and just hurts trying to begin to think about justifying it.

There are too many factors that have to be included when one tries to determine the motivations of someone who downloads a piece of copyrighted work.  Is the DVD available in their region?  Is there archaic and detrimental DRM associated with the product?  Is the product priced so high that a normal consumer cannot even begin to justify the purchase of the product?

If you could prove to me, beyond a shadow of a doubt, that indeed 1 download == 1 lost sale, I will hand over my geek license.  It cannot be proven, because it is a child of fundamentally flawed reasoning.

Some Suggestions

Make Buying Your Product Easy
The reason that I buy games from Steam is that it is easy.  I don’t have to go through the hassle of traveling to get my fix, and I don’t have to do much waiting.  Everything is on demand and in my face.

Previously, if there was a game coming out that I wanted to play, I would borrow a disc from a friend before buying it for myself.  With Steam, I can easily find out what other people think of the game, how many copies it has sold, and what I need in order to be able to play it.

Make Your Product Hassle-Free
By adding unnecessary DRM, you are not thwarting would-be pirates, you are just hurting the end user.  No matter what you do to try to protect your copyright, your DRM will be hacked.  There is nothing in the world that you could possibly do–aside from assigning armed commandos to keep watch over every single consumer in the world–that will stop piracy.  Just stop trying to halt piracy.  It’s not going to happen.

When a company adds an extra layer of complexity to their product, (i.e. a rootkit that ensures you don’t modify the original files, or DVD regions) that company is making things harder for the end user.  It’s simple, if the end user finds that it is easier to find an unlocked pirated copy of your product, then they will do so.

Making things hassle-free will eliminate the thought of finding DRM-free merchandise in the minds of the average honest consumer.

Don’t Be Afraid To Give Things Away
If we learned anything from Nine Inch Nails, it’s that a consumer enjoys getting free things.  This endears the consumer to the provider, creating the possibility of future sales.  Stop thinking about the sale now, and start thinking about how you can cultivate a relationship that will result in future sales, and future recommendations.

Knock It Off With The ‘Piracy Kills Babies’ Attitude
The IT Crowd’s parody anti-piracy ad was not far off the mark.

Seriously, just stop.  Sure, piracy can hurt artists.  Sure, you won’t be getting your $6 billion bonus this month.

If you cared so much about the artist in the first place, they wouldn’t be getting <10% of the profits from their work.

And come on, MPAA, the movie industry posted $9.78 billion in revenue in 2008You are making record profits, and you still don’t get it.

Conclusion

Obviously, this is a topic that I’m passionate about.  I think anyone in the field of software should be highly animated and interested in this topic, no matter which side you subscribe to.

As a small-time developer, I think piracy isn’t as big of an issue.  I tend to buy software from single or small number developers, because I know that I may be in a similar situation in the future, and not paying one guy is a lot less conscionable than doing the same to a big no-face company.

There is, and never will be a way to combat piracy of any medium, and the further companies take the fight, the more they are going to harm their honest consumers, driving them to pirate their product to get a better experience.  It’s a vicious cycle.  Why don’t we stop it already, MPAA, RIAA, etc?