I'm only trying to refute the claim that "piracy has one USP that the competition lacks that is very hard for them to replicate: convenience". That's disproven by the fact that many companies e.g. Steam have had undeniable success on the back of that convenience.
They haven't stopped piracy (which can't be stopped completely), but they have carved out a huge, lucrative market where others with the "free will always trump non-free" mindset were too fearful to tread.
You make a very good point about having to compete with piracy.
If piracy is so easy and so ubiquitous, it has to combated with features that are at the very least equal in order to persuade the on-the-fence pirates. Thanks.
Well it seems to be the only thing that drives improvement in media licensing. Without piracy I suspect iTunes and Spotify would have come decades later, if at all. I suspect the same can be said for Steam. Piracy really is an availability problem.
The reason things like steam can "best" piracy is because piracy is so crippled by anti-piracy. Between sites disappearing, spotty content, abusive ads, viruses, malware, and risk of prosecution, it's not hard being better. Imagine if that weren't the case and the free experience were seamless.
Steam and itunes are wildly successful because they are easier and cheaper than bestbuy and samgoodie.
People who want to pirate can download MP3's and PC games with ease. Some of the most pirated games are on steam. Headphones (sickbeard for music) makes pirating music even easier than iTunes.
>Why do you think the RIAA/MPAA/etc. try so hard to shut them down?
Because piracy costs them sales. It's still not competition when you take the product without paying for it.
Gabe Newell of Valve Software has famously said that piracy is a distribution problem, and I fully believe he's right.
> “The easiest way to stop piracy is not by putting antipiracy technology to work,” Newell said. “It’s by giving those people a service that’s better than what they’re receiving from the pirates.”
Steam single-handedly killed even the temptation to pirate games for me, because it's ridiculously convenient to just fire up Steam, click a button, and have the game delivered to my desktop at multi-megabit speeds without any obnoxious DRM getting in the way of me being able to play. Pandora, Spotify, and most recently Google All Access make music piracy a complete non-issue for me, because I don't want to have to spend time chasing down a song or even futzing with iTunes - I just punch something into search and it's playing. Netflix and Hulu provide so much content that I can't watch all of it - while they don't always have the most recent content, they have a lot of it.
Provide me a service that is a. affordable (Steam Sales and $8/month for movies or music are excellent models here, content folks) b. convenient (click button, enjoy content), and c. reliable (no explanation necessary) and I won't have any incentive to pirate content.
I'm convinced that the people who can afford stuff but pirate it anyway do so because of distribution problems in getting that content legally. The people who pirate stuff who can't afford it, or wouldn't buy it if they can are arguably even a net benefit - they aren't lost sales, but they increase the reach and visibility of the product. In either case, it's not really worth worrying about them (though the studios sure do love to gripe about them as if they're all lost sales), which leaves us with one very easy solution - have the best distribution channel available, and people will pay for it. At that point, piracy is about as solved as it'll get from an economic standpoint.
I am of a strong opinion that piracy is about access rather than stealing.
Piracy for the most part is used by 2 types of people :
1. Those who would never have bought the product because of lack of income to do so.
2. Those who find the product to hard to access.
Steam is an excellent example of dealing with both. Steam sales and location specific prices solve problem 1. Everything one platform everywhere in the world solves 2.
Piracy doesn't offer automatic updates, cloud saves, (usually) multiplayer, support when the game breaks, and a guarantee of not containing malware. I'm obviously using Steam as an example here, given the context.
I wasn't trying to justify piracy or suggest that people should be able to get things for free [1]. Rather that while piracy is an unfortunate reality of doing business selling digital goods, it probably doesn't have nearly as much impact on the bottom line as some might believe.
This is why companies like Valve practically ignore piracy altogether and instead focus on delivering as much value as possible to actual paying customers at prices they're willing to accept (focusing on exactly what you said smart businesses should). Contrast that to those companies that, blinded by the sheer number of people pirating their products, waste money and time in a futile effort to combat piracy by placing draconian DRM schemes on their products, that end up resulting in the pirated versions offering a superior user experience when all is said and done. A sweet irony if I ever saw one.
[1] I used to be a heavy pirate myself when I was in high school, but these days I regularly pay for content that's priced fairly and delivered in a way that's not user-hostile, and simply treat everything else as if it never existed in the first place.
I disagree that it's an inaccurate analogy, but I agree that piracy will reduce innovation in its current state. I'm saying that, as it stands, the fundamental idea of selling something which is free to duplicate is broken.
Correct. Piracy results in a market dynamic where even a strong second player can't win from the market leader, and pushes software markets to monopolies.
Companies like MS and Adobe know this. They have to perform regular anti pitacy charades, but they vastly prefer someone pirating -a potential future buy- to someone buying an alternative - an actual lost sale.
Same dynamic in hollywood: Pirating a film is vastly better for them than finding alternative hobbies and not buying the series merchandise.
I think this is just a different way of expressing the idea that piracy exists only because the pirate user experience is better than the non-pirate user experience. So if the non-pirate experience, for example, does not require that you have the disk in your dvd drive in order to play (since all the assets are copied to your hard drive at install time), then the pirate experience is better. And so on.
so the trick is to make the non-pirate experience better and the piracy problem goes away. The only people pirating are the ones who would not buy your software/game anyway, so free advertisement/word of mouth should be welcome anyway.
The industry's problem is that it's hard to make a better experience, existing cash cows being existing cash cows and all. It's easier to protect them than to innovate.
I also can't help thinking that piracy helps the incumbent by protecting the market at the bottom end. I'm pretty sure low cost or open source alternatives to, say, Photoshop would have a lot more traction if the option to pirate it wasn't there.
When a particular product hits home, people feel robbed for not being able to buy it on the spot for any reason, especially when shipping and manufacturing costs are close to zero. Indeed, it really is the other way around, and it will never be otherwise, but it doesn't change the fact that some of your paying customers will be dissatisfied by your service to the point that they will take action to bypass your own faulty distribution channel, and they will even pay to be able to do that.
Heck, let's drop the masks, the majority of your paying customers even bought their very first computer just to be able to do that over the past decade.
I'm not advocating piracy, I'm explaining why it exists in the first place. When the pirated product is available immediately instead of months/years later, and with better features than the legit one, it's foolish to expect even paying fans not to pirate things nor look into piracy as a distribution channel. This is a challenge that content distributors need to deal with, one way or another.
Saying that people shouldn't pirate digital goods because it's illegal is all nice and well, but is this even enforceable? It's my own humble belief that it's not, not with the current state of the art, and that yelling at piracy is like yelling at windmills. Just deal with it and improve your product distribution in every possible way so that piracy is not exactly a better option.
Yup. The key to defeating piracy is giving value for the money and not putting any roadblocks in the way of legal acquisition.
Different people pirate games for different reasons. Some do it for the money, some do it because they just can't get the product, some do it because they can't get the product when they want it, some do it because they've been burned in the past and are covering their rear-ends, and others do it just because.
The last one is never going to be a customer. All the rest can be converted, if you're willing to flex far enough. (Some of the money-based problems can't be overcome without pricing yourself too low, though.)
In this day and age, the distribution problems are ridiculous. Steam sells a LOT of games because they can be downloaded at launch, instead of waiting for the mailman, standing in line at midnight, or just generally waiting on something. They even let you pre-load to save the download time as well.
I don't think justifying piracy is the issue. Rather, the (or one of the) issue is the justification of DRM. DRM costs money and makes the lives of honest buyers miserable.
Fair enough. Perhaps I missed your point, which seemed to be that since piracy is (nominally) free, then paid services can never beat it.
But I don't agree he's being disingenuous. He's just speaking about the service problem in that particular quote. Gabe has also addressed the pricing issue in the past, talking mainly about how the sweet spot for maximizing profit on Steam is much lower than most people would have thought (the blog post is old, and it's been a while since I read it, but that's the gist).
It's mostly a service problem IMO and also to a lesser extent a pricing problem, and if you asked Gabe he might say the same. Unfortunately that quote makes it seem like he thinks it can be one or the other, but that's not likely really true.
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