Don’t Fight Your Customers, Cater To Them!
We’ve all heard the story: Content-driven industries such as publishing and music have been crushed by piracy in the past decade, so now the movie industry needs to move fast to avoid the same fate. But is this conventional wisdom true? Have content industries really been hurt by copyright infringement? Are they as endangered as they claim? And is fighting piracy with digital rights management (DRM), takedown notices, and mass lawsuits the right approach?
The evidence doesn’t support the claims.
- I’d argue that publishing hasn’t been crushed at all so much as that it’s shifting from print to digital formats and, that as a whole, is healthy and growing despite the slow economy.
- Even printed book sales have been surprisingly robust and even grown at times. While local bookstores have been in decline, people haven’t stopped buying books, but are now buying them from Amazon.com (increasingly in electronic Kindle format).
- Where “digital sharing” has an impact on traditional publishing, it has little to do with piracy. With the plethora of free sources of high-quality content (including through “crowdsourcing”), people are less willing to pay unless it’s for something substantially better. The success of many ad-supported “free” news and social sites shows that a non-subscription model can work just fine. If a site providing high-quality, original content is accessible and easy to use, people will go there first rather than looking for copies of its content elsewhere.
- Industries will rise and fall because people may simply spend their time doing something else—e.g., more social media and video games, less TV and magazines.
I’ve also seen no signs of decline in the music business due to piracy or otherwise despite the industry’s claims over the years. On the contrary, it’s posted record sales and profits. While CD sales fell, it’s made up for it and then some through other channels, such as single iTunes downloads—part of a normal format shift we’ve seen many times. (Was it pirates that killed 8-track, the LP, and cassette tapes? Did the death of those formats kill the whole industry?)
Movie studio profits also appear to be in no danger (to put it mildly), as people still throng to theatres and buy pay-per-view movies at increasing rates.
What content industries should learn is that piracy is NOT the problem (and in fact likely increases sales by expanding the fanbase, as numerous studies show). The real problem is slow-reacting, out-of-touch companies failing to provide products or services that meet shifting consumer demands. When ordinary people casually pirate content, it’s usually because the pirated versions offer superior functionality (such as no DRM restrictions) or are just more readily available (no “legitimate” version was available for download to their computer or mobile device at any price). These reasons for turning to piracy are usually more compelling than price alone.
Media companies should certainly feel free to go after commercial pirates (which can be done effectively with existing legal tools), but going after their own customers and fans with restrictive DRM schemes, indiscriminate “takedown” requests, and overly-broad and harsh laws and treaties is not smart—and ultimately ineffective enough to be a waste of time and money.
With the backlash against overly-stringent anti-piracy measures growing, the smart money is to focus on keeping your customers happy—as it always has been.
