Sorry RIAA, MPAA: The Pirate's Boat Will Stay Afloat

The entertainment industry has embarked in an all-out war against piracy around the globe, with the hopes of scaring would-be pirates from illegally obtaining digital media. But if the likes of the MPAA and RIAA plans on sinking the ship that millions sail throughout the Internet, they should think again.

The primary target for the entertainment industry, as it would seem, has been The Pirate Bay. It is far more than a website that enables users to acquire digital content of both legal and illegal variety. It is a symbol. It is a powerful message that the entertainment industry hates but many people, even those who don’t commit acts of piracy, agree is true: the system is broken.

 

The Problems

Digital piracy, which the industry’s greed and complacency has created, has run rampant throughout the world. Nearly every new song, game, movie, and software title makes its way to peer-to-peer services where hundreds, thousands, or millions share files. They do it because they can, because they must, or, well… just because. This problem is compounded by several other issues that include availability, distribution, pricing, and ownership of the content at hand. It’s a big mess.

A defining issue that plagues the industry and, more importantly, consumers is draconian Digital Rights Management (DRM) techniques that everyone’s hearing about lately. This is why you can’t read that e-book you purchased on a competing device, listen to that MP3 anywhere you want to, watch that movie on your computer, or play that game without an always-on Internet connection. It’s these very techniques that drive paying customers to piracy (even yours truly has fallen victim to DRM gone horribly wrong).

Most of this could have been avoided. If the industry was willing to adapt and  find a way to embrace digital distribution, perhaps through freemium models like Google has done so well with, piracy, while it would always exist, might not be as bad as it currently is.

Unfortunately, the industry simply finds ways to punish consumers more.

(In an interesting side note, The Hurt Locker might generate more money by suing people who have pirated the movie, instead of finding ways to monetize the film itself. How unreal is that?)

 

Technology Enables Piracy

But there are reasons why piracy isn’t going away, even if governments are going to crack down on BitTorrent users. It’s called technology and innovation, and the pirates tend to be on top of this.

Speaking of BitTorrent: that is all we hear about these days. The Pirate Bay, ISOHunt, and Demonid are top of the list, yet there are quite a few other ways to transfer files. IRC chat rooms and traditional protocols like eDonkey and Gnutella are still used for file sharing. Websites, blogs, and forums that post direct links to copyrighted material from file-hosting sites like RapidShare are growing in popularity. File Transfer Protocol (FTP) sites and newsgroups have always been popular methods for transferring copyrighted material. And nothing will stop someone from burning a few CDs and distributing them to friends.

Yet even if users are still inclined to stick with BitTorrent, there are services that are on the rise that can (and possibly will) give the entertainment industry more to worry about.

With the use of a virtual private network (VPN), a user can connect to a computer that is available in any location around the world and route all of their traffic, with encryption, through that computer, rendering the original user’s IP address invisible to the Web. Well, it is only truly invisible if that VPN doesn’t keep traffic logs, which is an inherent problem with VPNs, as there is still a middle man. However, assuming that a VPN does have an operator that destroys traffic logs, there is a curve-ball for anonymity on the Web, and is something we will likely hear more about in the future.

But let’s assume that a government could severely reduce piracy on these types of networks and communication technologies — some genius out there will eventually create a network, protocol, or technology that will allow users to share copyrighted content while making it extremely difficult for a third party to identify what is being transferred. Right now it is fairly easy for someone to claim that you have transferred a file — they look at your IP address when you access a file. But who is to say that this will always hold true?

 

Society Accepts Piracy

Beyond the technological advances that will keep illegal file sharing going for the foreseeable future, the one thing that matters more than anything else is the fact that many people actually participate in piracy and have no issue with doing so. There are surely those that feel no moral implication for their actions, and that number is probably growing.

Now if society in general starts to believe it is okay to swap files, what can a government do? What can the MPAA and RIAA do? Sue everyone? Take away everyone’s Internet? I doubt it. Furthermore, forcing older business models on a civilization that doesn’t want them will not work. It makes the issue worse.

Then again, perhaps education in schools about the impacts of piracy could be useful. But that might work just as well as telling people it illegal to drink under the age of 21 or that you shouldn’t smoke cigarettes. It also didn’t help that, at least in my school, we regularly watched bootlegged copies of movies in the middle of class, with the teachers as well. No one cared.

So if you can’t beat ‘em, join ‘em — the entertainment industry should find ways to take advantage of piracy or create opportunities to draw in pirates. There are many ways to monetize content, and now is the time to experiment. But none of the big boys in the industry have been willing to try. Eventually, though, someone is going to have to give.

Written by James Mowery

James Mowery is a passionate technology journalist and entrepreneur who has written for various top-tier publications like Mashable and CMSWire. Follow him on Twitter: @JMowery.
SEE MORE ARTICLES BY "James Mowery"

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Comments
  • Maca

    Good read.

    Piracy has been around for decades. When I started buying music 30 years ago bootleg tapes were very common. The industry was fighting piracy back then and in the previous 30 years they have made no progress, IMO; if anything their problem is a hundred times bigger now.

    Why is it taking them so long to cop on? Surely they can’t be stupid enough to think they will ever beat piracy? It’s high time they learned to work with the problem rather than fighting against it. They could actually make some of the money they claim to be losing if they thought of more inventive ways of monetizing the content.

  • http://tobyleftly.com Toby

    They have fully admitted that they were ill prepared to handle the concept of moving their business online. Unfortunately, that was four years ago, with little changing since then. The problem is the same as the newspaper industry – the people with enough power and influence to bring about real change would be the first on the chopping block before any new model could truly gain traction. The nice thing about the RIAA’s approach is that it has allowed an entire generation of musicians to take root without the idea that they must have a record contract with a massive organization to be considered successful.

    Nice one James, thanks.

  • http://au.linkedin.com/in/ericolisboa Erico Lisboa

    hum…

  • Tokyo dave

    The problem, as you point out is, the distribution model.
    Downloading a film is as easy as clicking a link and waiting 20 min, no problem where you are and no bloody annoying adverts. You can the take with you your entire film collection on your computer or hard disk anywhere, without the size and weight of a DVD collection.
    In comparisson buying a DVD or going to the cinema is longer and more expensive than this, this is where they are failing.
    Introduce a non-HD direct download service (DRM free), with subscription options for heavy users (or pay as you go) supported in part by ads. Like the microsoft xbox service. Make it cheaper than DVDs, with no distribution and packaging costs this should be easy. Watch as your sales grow.
    You can then reserve the HD and 3D versions for cinema and blu ray.
    As long as the download is quick and reliable I see no reason why this shouldn’t bring in new customers. There will always be a proportion of people that will risk it for free copies; but the majority may be atttacted by the legal and speedy methods*.
    *User experience may vary!

  • JO Denny

    Hahaha long live The Pirate Bay!

  • http://www.aadeals.com Eddie

    Too Little Too Late?
    The MPAA/RIAA have failed in attempting to create a new business model. Trapping their customer by placing the content on a certain media worked great 30-40 years ago. Today is a new day with new customers. The new customer demands a new business approach. Maintaining their current model does not satisfy the new customer and the MPAA/RIAA has not embraced that.
    Soon, piracy will become “the norm” for most internet users that the companies will find it difficult to implement a new strategy. Take DRM as an example of too little too late. Customers demand more flexibility.

  • Andrew

    I am not impressed with this article… First of all, how has record or media company’s greed come into the debate about piracy? The simple truth is that piracy over P2P networks was started because someone had an idea and didn’t really realize what they were getting into. What happened was that teens could load their hard drives or iPods with mp3s. Everyone knows that IT’S WRONG, but people still do it because they are more than likely going to get away with it.

    Here’s why there really should be no debate about it: Piracy is theft… but Piracy is PIRACY… Don’t argue, don’t debate the righteousness of the actions of the record companies, either do it or don’t do it… when you say there is $800 of music on an ipod someone DID NOT PAY FOR, how can you argue there are two sides to the story, that this is the record company’s fault? $800 of FREE music is awesome, just like $800 of free food is awesome…. but how would I go about doing that? Shoplifting.

    And DRM? Sure Apple’s DRM is pretty ridiculous, but where I disagree is with DRM that say, for example, prevents the track from being shared. Why should two people have a copy of the same mp3 file? Forget freedom of information, music files are not classified government documents, they are someone’s intellectual and artistic property.

    I used to download, but I stopped. I have Netflix, I go to movies, and I buy CDs. If you can’t afford them, TOO BAD, that doesn’t make stealing right.

    • CM

      Andy you are a freakin tool. If you can’t understand why both greed and DRM affect piracy stats then go back to high school economics. Granted, people will ALWAYS pirate media, regardless of the business model used – but for regular people, not being able to listen to an iTunes song on both ipods, my computer, a Zune, and perhaps an online streaming server I have built is bad business PERIOD! I OWN THE FREAKIN FILE! I should be able to do whatever I want with it except give it to another person. And an even bigger point – BY AGREEING TO PURCHASE A GAME DOESN’T MEAN I AGREED TO DEACTIVATE MY COMPUTER’S CDROM BURNER SIMPLY BECAUSE SOME HIDDEN ROOTKIT WAS INSTALLED WITHOUT MY PERMISSION!!!! That is the biggest reason people pirate games, and until the DRM is removed, I WILL NEVER PURCHASE A GAME LEGALLY! For any business out there reading this and thinking of putting DRM on a piece of media – YOU WILL HAVE MORE PEOPLE PIRATE THAN PURCHASE GUARANTEED!

      My 2cents.

      CM

    • Sai

      The record / media company’s greed comes into this because of the ridiculous prices they expect us to pay for movies, music and games.

      Why in the world would anyone pay $60 for a game, when you can get it for free? Or $40 for a bluray movie, when you can get it for free? Or $20 for a CD, when again, you can get it for free? Or $20 for a movie ticket, when you can wait for it to come out on DVD / Bluray and watch it for free?

      On top of that, the CDs / DVDs / Bluray / Games are all loaded with ridiculous DRM techniques that render a large majority of them completely worthless on many computers, cd players, dvd / bluray players and etc.

      For example — Yes, it’s definitely worth paying $40 for Avatar on bluray, then find out when you get home and open it, your bluray player isn’t able to play it because of DRM — http://www.zdnet.com/blog/hardware/update-x2-avatar-blu-ray-drm-bites-legitimate-customers/8193

      Yes, it’s theft. But I’d rather be stealing from the rich and giving to the poor (Stealing from the industry so the less wealthy can enjoy movies, music and games) than being on the opposition (Setting ridiculously high prices for consumers to pay, and not offering online options which forces consumers to collect clutter in the form of CD, DVD, and bluray cases).

    • Alexander

      Yes and no Andrew, (congrats on stiring the nest) I too no longer pirate and I have Netflix as well but I no longer buy music either.
      As for the question of how do the record and/or media company’s greed come into the debate of piracy? Simple when CD’s were a new technology (in the 1980’s)and cost $0.80 to make, copy, print, etc. $20 for 15-20 songs was a great idea. But now nearly 30 years later they cost $0.16 to make, print, etc. you get 7-12 songs (most of which suck except for the one that play on the radio anyway), all for a low price of $20. See where this is going?
      Now also on the fact that it is 30 years later and I traded in my rad walkman CD player for an Epic iPod. I can hold 1000’s of songs on one device and according to new laws you are legally allowed to copy it onto a personal device (if you can get past the DRM). But here is the catch don’t think about losing it, loaning it to a friend or having it getting damaged because you are using it as a coaster, as soon as that happens, congrats you’re a pirate again and can be charged $750 per song and up to 5 years in jail.
      The point of being a pirate is about the same as being an American, we don’t like the old way of doing things so we are going to toss all of your tea in the harbor, or give Indians beads for land (when they have no concept of ownership), remember the Alamo, didn’t we have a civil war because some states wanted to leave the union? I can give you more examples of how Americans (at least) spark change. The MPAA, RIAA and the other business like them need to understand that, times are changing and so should they.

    • drklassen

      Sorry Andy, copyright infringement is simply NOT theft. There is absolutely nothing stolen.

    • patrick

      good you pay, i’ll download. :)

  • PetrifiedJello

    Sorry Andrew, but your analogy fails. When people COPY a file, there’s plenty to go around. When people buy food, the item is removed so no one can buy it again.

    Regardless of one’s position on digital acquisition of files, it is here to stay. Businesses have run decades on charging obscene prices for songs, movies, and other medium. There’s absolutely no reason why anyone should be paying for a song written in the 70s.

    But that’s just me. I get sick and tired of people who create and feel entitled they’re works are worth money year after year after year, including long after their death.

    Screw their mentality. I’ve used the freemium model before and earned $100,000 in 3 years. Notice how you don’t see me bitching it’s not enough. There’s a limit. It’s about time content owners and distributors understand this and work within the real world of economics.

    A world which states an infinite supply as $0 cost.

  • rajab

    Whether it is entertainment or tools, the studios fellas have to check on the pricing.. Half the battle is won there.. Do not be greedy, please.. God bless.. :)

  • Timmy

    I am a Russian, Russia is supposed to be one of the worst pirating cases in the world. We here have an interesting problem: the legitimate products (especially movies) sold in the market are SERIOUSLY flawed: for example, the DVDs now lack original soundtrack. It is being replaced by the soundtracks for Ukraine, Belorussia, Georgia and what not. The translation, however, is god awful. And these are the legitimate products sold by the movie distribution companies here. Same is for the TV: the translation of the popular series is beyond good and evil. How NOT to be a pirate, if you want to hear, for example, Richard Gere sing on Chicago soundtrack and not some weird Russian singer? What if you want to listen to Stephen Fry as the Cheshire Cat and not the same guy that also reads the ads on the TV?

    Recently, however, this trend is changing and Avatar was released on a reasonably priced DVD with the original soundtrack intact. So far though this is an exception, not a rule. The majority of other movies are still released here without the original sound and without the extra features.

    In USA you have Netflix and other alternatives. In Russia we have the dilemma of getting a proper movie by clicking on a link or going and wasting our good money on a mediocre, but legitimate copy of the same movie.

    I like what Steam did to the gaming market and it is available in Russia. However there is no Hulu, no Netflix no iTunes, no iStore (yes, yes – we do not have this stuff here and credit cards issued by the Russian banks are no good for Mr. Apple to buy progs from the USA).

    Yes, the above is no excuse for being an arrrrrrrrrgh pirate. But what do we have instead?

  • Drew

    Hey Andrew its not that people like myself CAN”T afford it, Im just not driving my ass 40 minutes to the nearest theater and then paying 30$ just for me and my wifey to go see a movie without pop or pop corn, what a waste of my time, especially for a movie thats mediocre at best. If they were to offer a streaming service and charge people even 15$ to stream a movie thats currently in theaters I would pay. I purchase just as much as I pirate and the stuff Im pirating is because it aint worth the money they’re charging but of course every CD is worth 15-20$ no matter whose CD it is yah no. Just because you’ve changed your ways doesn’t mean you gotta come in here preaching Like its the 2nd coming of Johova, thats your choice to not pirate anymore. Personally Im going to continue doing it, If I like the game I pirate I go and buy it to enjoy the full aspect of a Game IE: Multiplayer, or if I really enjoy a movie I will go out and purchase the blu-ray version at 30-40$ a shot. So really I don’t give two shits that they claim to be losing money I really don’t care.

  • Nigel

    The record companies ARE greedy. If the top 40 has 10 new tracks per week on average and they cost 0.79 GBP each, it will cost 35 GBP per month (50 USD). That’s way too much for the average teenager.

    Get the price right and people will pay.

  • Philipb

    Piracy has been with us ever since desirable goods were limited by distribution or price. In the 17th & 18th centuries it was liquor, tea and lace. Today it’s movies, software and music.

    And the consumers 300 years ago were just as accepting of piracy as they are today. Society ladies would share their “connections” to purveyors of fine cloth for their seamstresses. The smugglers of their day where defeated only when the government dropped the high tariffs on the goods making them cheaper & more readily available.

    Those who ignore history…

  • Ben Franklin

    The answer lies in the realm they chose not to see, the pirates. The publishing and distribution outfits wish to maintain unrealistic margins on products which can have nearly zero distribution costs. Why? They now have access to much much huger audiences, if they accept less revenue per consumer, they will still be net even or better since there are now so many more markets open to them.

    Their products should be priced very low, less than a dollar a song for example and less than 5$ for a cd/album.
    The price must be low enough that it is not worthwhile to bother with searching for and downloading from a dodgy 3rd party.

    If you want to destroy piracy, destroy what created it, unrealistically high prices. If you want to keep your production pipeline stocked with new products, shorten copyright life to a reasonable 7 to 10 years. When people can mine older material for ideas and transform them into new products, the distribution channel will be filled with new products.

    Distributors have 2 paths to combat piracy, lower prices and higher volumes, more product and higher volumes. It ain’t rocket surgery. Failure to act will ensure failure.

  • Ehohoo

    Alrite, i have a gf- should i pay her parents for getting laid? Sure, not, its love. Same goes with certain media content. It touches my soul, should i pay for it? No. My friends hummin song – should i pay? No.
    Greed of those who only own media is ruinin the world. They literally create no value, since there no value in greedy distribution. Its alrite with me payin few bucks to content author, not the distributor.
    Youd say – “distrbtor the one who makes it possible”, nah.

  • Chris M

    I think this largely boils down to pricing and lack of proper distribution.

    As has already been stated by a few people, prices are too high for a mediocre product. We don’t stand for it at retail in any other industry, so why should we with our entertainment. In any other industry these companies would have collapsed already. Instead these companies sue and lie their way into continued existence.

    Further, they rely on broken distribution methods. Why is it that the only way I can acquire a movie in a high-def format is a BluRay disc? If they really want people to buy movies I should be able to go online, and buy a 1080p copy of a movie for $10 or so. Or enable some sort of subscription model ala NetFlix.

    Plain and simple the problem with piracy isn’t piracy (it has and always will exist), it is the aging dinosaurs that don’t understand what the consumer wants (or don’t care) we continue to allow running our society, culture and media.

    REMEMBER, the customer is always right: the number 1 business adage.

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