Media Piracy – A New Perspective

I was reading Todd Sattersten‘s ebook on pricing, Fixed to Flexible, recently and the author came up with an interesting way of looking at media downloading:

Discussions about copycats and pirates often end up as dismissals arguing weak creative skills or a lack of morals respectively. But that’s not the case: unwanted alternatives enter the market because of the math.

Copycats see attractive margins. When Apple proved there was a market for hand-held computers, Palm, Blackberry, and now Google, began selling replicas in the product segment. In publishing, if one young adult vampire love story works, there must certainly be a market for a dozen more.

Pirates see markets that can’t be served by original or even copycat products. Walk down Canal Street in New York City and you’ll see the fake Gucci being sold to folks who weren’t going to buy the real stuff anyway. Napster took off because there were a bunch of college kids who wanted music they didn’t have the means to buy. Licensing rights to publish foreign titles in Peru doesn’t work when the cost of a book amounts to 20% of an average worker’s weekly wage.

The distance between price and cost creates space for substitutes, legal or not.

This makes perfect sense, and is something that is never really discussed when the media talk of illegal downloading and piracy. I feel little time is devoted as to the why consumers download instead of consuming in the way traditional media companies want them to.

And the quote above gives a great insight to why some would: “…you’ll see the fake Gucci being sold to folks who weren’t going to buy the real stuff anyway.” This is one of the fundamental reasons why some people download. They are willing to consume a product if it is free, but not if they have to pay for it.

I can think of many times this thought process has happened to me. I will borrow a DVD off a friend to watch a movie that I wouldn’t of gone to the movies or even bought the DVD for. That is, I will watch it for free because it isn’t costing me anything (except some of my time), but I am not willing to give up any money to watch it.

I would put it to you that most people think this way.

Enter easy downloads. Instead of borrowing a DVD off of a friend I could just as easily (actually, easier) do a Google search for a torrent of that movie and download it. Sure it would be illegal, but if I wasn’t going to buy it anyway has the movie studio lost anything?

Your thoughts?

Image credit: ToobyDoo