Imagine walking onto a train platform, and on either side of you are trains going to your destination of choice. The first leaves as soon as you’re ready, gets there in half an hour, you can step right on and depart. It’s effortless. The second is sitting there but wont leave for another three months. Only once you’ve waited can you begin to attempt the boarding process. If you are resident in Germany, India, Canada or any other of eighty or so arbitrarily chosen countries, you cant get on. If you’re lucky enough to be eligible then you still have to register with the train company, confirm your mailing address, write out your identification details, sign up for a few newsletters you don’t want and copy out your credit card number by hand. Then you wait a little. Then, if you’re lucky, you can board the train.
But here’s the kicker- the first train is totally free, the second you have to pay for. Which train do you pick?
Digital content is the only commodity in the world that is universally available yet causes you more grief if you pay for it then if you don’t. It’s literally incredible.
Yet piracy is a service problem, rather than a pricing problem. Time is our most valuable resource, not money. And its been that way for some time – it’s why the Uber model works so well. People will pay a premium for convenience. What they wont do is pay a premium for inconvenience. It’s just so much hassle to purchase content legally – credit card forms, geographic zoning, copy and transfer restrictions, release delays and limited choice on any given content platform…
The minority that do purchase content legally do so for the sake of convenience, it has little to do with purchasing power or price. The platforms that have gained traction – Spotify, iTunes, Netflix, Newsstand, Kindle and their derivatives – have succeeded because they present significant convenience advantages (such as one click purchasing, content syncing, and device agnosticism) which are significant enough to override the remaining disadvantages of the paid models.
Piracy is a service problem, not a pricing one. It’s certainly not an enforcement problem – content is ubiquitous and accessible anonymously and safely (with a few precaution), you can’t control something that is both intangible and clone-able in a globally connected world. Enforcement efforts are a waste of time and resource. There are new ways of thinking about value and value extraction. Keep up.
But there’s good news: startups get this, and the labels and production houses are finally, slowly, getting comfortable with new distribution paradigms and business models that they’re pushing. Put the two together and you have all the new content startups disrupting the space. Convenience is coming.
Here’s an extract from an article i came across on Techcrunch:
“According to a report by Norwegian researchers at Ipsos, piracy has fallen alarmingly in that country thanks to viable alternative sources. For example, music piracy has fallen from 1.2 billion songs in 2008 to 210 million last year. About 60 million movies and TV shows were pirated last year, compared to 125 million and 135 million five years ago.”
Norway, coincidentally, has an abnormally high onboarding rate to services like Spotify, Rdio and Netflix…
Convenience is the only way to win the piracy war, and one day content holders will understand that, and on that day piracy will end.