I love Hulu. LOVE Hulu. I love the interactive ads and the recommendations. I even tolerate the freezes and the delays after broadcast. Which is why I facepalm in response to the current piracy laws in the United States and the way that they are enforced. The most public and political pirate sites like Ninjavideo were shut down just over a year ago now, and the entertainment industry still hasn’t learned its lesson: you have to win the PR war before you can beat the pirates.
You Think You’re John Wayne, But You Look Like Prince John
Do you remember those high stakes ads that used to run at the front of feature films that compared downloading films to stealing a car?
It’s understandable that companies are frustrated. The MarkMonitor report has pointed out that the top three pirate websites (rapidshare, megavideo,and megaupload) get more than 21 million views per year, and that is only the tip of the iceberg. As one of the founders of Ninjavideo, Phara said in the circulated Ninjavideo Manifesto, every pirate will be replaced by another. For the younger generations, pirating is a way of life, talked about with the casual tenor that older people reserve for jaywalking. This is the generation that grew up with the hyperbolic ad above. They will not be guilted and they see through scare tactics like lawsuits against individual users. So the next choice was to change the way young people thought about intellectual property.
You can’t share something that’s not yours. But how do you explain to a teenager that they don’t own that Justin Bieber CD that they bought? Or rather that they own the physical disc, but not the data on it? Or they do own the data on it, and can load it into their iTunes, move it from that CD to iPhone, iPad, iPod, iwhatever format you want just not a file sharing website pleasegodplease?
This presumes that this teenager would’ve bought the Justin Bieber CD in the first place. Maybe he/she really just wants to listen to Nirvana and agrees to listen to Biebs so his/her best friend will shut the eff up. Our hypothetical teenager wasn’t going to buy the CD, so the RIAA or the MPAA (if it was Avatar) isn’t actually losing money. Not even hypothetical money. What the companies are really worried about is those people who would pay for a Never Say Never DVD, or would watch an episode on Hulu or on TV (if they’re in a Nielsen household.) It’s that person who would pay for it, but chooses not to. They’re not concerned with consumers who can’t pay the price they demand, because those people couldn’t pay anyway. Let’s talk about deadweight loss even though graphs can be headache inducing. (I apologize in advance for my economics. I haven’t done this in a while.)
Deadweight loss is an economic term that refers to the loss of revenue and capital that comes between the price that the market will bear and the price that a monopoly allows a provider to charge. When a poor college student or teenager with a limited income looks at a DVD, s/he is usually aware of how much s/he would like to pay, and $20 is not usually it. That desired price also goes down with the knowledge that somebody, somewhere is getting a digital copy of that DVD for free (or just the labor cost of searching the internet for a site that purveys it.) That lowers the demand, lowering the competitive equilibrium, widening the area of deadweight loss because the monopoly price usually stays where it is.
So it’s a pretty smart idea to try to cover up this idea of getting media for free, because more people can be convinced to play the higher price. But like most ideas, piracy can’t be put back in the bottle.
Out-Innovate, Because You Can’t Outlast Them
As long as there is content released at a certain time, the internet will try to break it before anyone else. Like Phara said, every pirate is replaceable and will be replaced. No matter how many sites are shut down, sites will replace them, and even if you get Google to block pirate sites, pirates are going to win the arms race, at least in terms of accessing their weapons, because their weapons are so common. The data is being leaked by industry professionals. As long as there are people who can’t afford media, there will be pirates who are proud to give that media to those have-nots for free. They are the Robin Hoods, and the content creators and distributors become Prince John and the Sheriff of Nottingham respectively. How can the entertainment industry escape this narrative?
We are in an era when the success of a television show can be judged by ad purchases, Nielsen ratings, web play counts, Twitter trending, and internet memes. A show’s cultural capital can be monetized in many ways, and not only in terms of branded products, DVD sales, or advertising the trades on a show’s popularity. As media becomes more and more fragmented, advertisers will be able to directly target specific audiences and achieve a saturation of customers. This is the new way to make money on media that goes beyond CPM models, or really anything that’s based on a large, varied audience being better than a smaller, more monolithic audience. The entertainment industry has been based on brave innovation ever since a courageous team including D.W. Griffith, Mary Pickford, and Lionel Barrymore went out to Southern California and decided to stay longer than planned. (Ironically, the move originally happened to escape the fees of notorious intellectual property advocate Thomas Edison who held patents on much of the technology needed to make a motion picture.)
It’s time to find new audiences, and to remember that this industry is about advertising and branding, not DVDs. Make better content more cheaply. Build loyal customer bases rather than fleecing people one time by tricking them into buying bad content. Reward loyal viewers with early releases (like HBO’s deal for Game of Thrones) and special features like those offered on Hulu. Make sure every DVD has features that are worth purchasing: commentaries, extra scenes, insights that enrich the content. Be a good artistic citizen. Don’t worry about the people who would never buy, help the people who would but can’t. Make leisure affordable again and the profits will rise.
In Disney’s heavily policed and branded Pirates of the Caribbean: The Curse of the Black Pearl, Governor Swann suggests
Perhaps on the rare occasion that pursuing the right course demands and act of piracy, piracy itself can be the right course?
Commodore Norrington, our avatar of the entertainment industry, doesn’t respond to this. Instead he holds a sword up to Will Turner and warns him to show concern and care in his life, before resolving to let Jack Sparrow get a head start before he goes after him again. By holding on loosely, Norrington earns the goodwill of the audience. He’s one of the good guys now, ultimately becoming a likable anti-hero like Sparrow. The way you appeal to morality is to get people to not want to screw you. The way you generate goodwill is to look like a mom and pop store that succeeded. Have a heart and be unique, and the pirates will look like Blackbeard, not Jack Sparrow.