Piracy vs. Availability: A Parable

A Parable of the Past

A friend of mine heard an interview on Fresh Air with Scottish director Armando Iannucci about his new film In the Loop (IMDB). He'd never heard of Iannucci, or the movie, or the TV show upon which the movie is based. The audio clips from the movie were so great he then went to YouTube to see if he could find more clips. He could. The clips video looked even funnier than the audio.

The movie -- it appears -- "comes out" on August 14. In the old days, that meant my friend had two choices:

1. Wait two weeks to watch the movie in a theatre

2. Wait six months (?) to rent the movie and watch it at home

It always annoyed my friend that he had to wait to watch movies he wanted to see, because movie studios liked to release movies at different times in different cities; and then wait months after that to release the DVD for rental.

The studios did (and do) this not because they surveyed their customers, and found they preferred having to wait to watch movies they wanted to see in the way they wanted to see them. The studios did (and do) this for various business reasons, that have proved, over time, an effective way to increase revenues on a movie.

Times Are Changing

But these are not the old days, they are new days. And a few things have happened. My friend watches 95% of the movies he watches on his computer; he rents DVDs using zip.ca (Canada's Netflix); and occasionally when he wants to watch a certain movie right now, he looks for it online.

The movie studios so far have decided that he should not watch movies online when he wants to watch them.

Which in the old days, meant he just had to wait, despite being more excited about this movie than any other movie he'd heard about in past year or so.

A Parable of the Present

But it turns out that other people (not studios) can get their hands on copies of movies as soon as they are available -- often before they are released in theatre -- and those people make them available online. This is especially true for movies that lots of people really really want to see, right now.

So my friend now has a third choice:

3. Watch the movie when & where he wants.

It turns out that my friend much prefers option 3. It also turns out that movie studios don't want to give my friend option 3 -- which makes my friend shrug a little when he hears them talking about piracy.

Not because he wants things for free, but because it seems to him that "digital" means studios and moviegoers no longer need be constrained by the two choices of the old days. Option 3 is easy and cheap, and that's the option he wants.

He often says: If you, as providers of content, give me what I want, when I want it, at a reasonable price, I'll be happy to pay for it. But if you don't want to give me what I want, when I want it, I'll be compelled -- when I really want something -- to find other ways to get it.

Lessons

1. If there is demand, there will be supply.
2. In the digital world, media is infinitely copiable & distributable at rougly zero cost
3. Media companies have long built their business around a restricted supply
4. If demand exceeds restricted supply in the digital world, someone -- not necessarily the owner of the good -- will meet that demand by making & distributing infinite copies at zero cost
5. Trying to stop # 4 is like trying to stop water going down hill
6. If restricting supply is no longer a viable business, then something else must be
7. When supply is unlimited, other factors drive the choices people make
8. Those drivers include: ease, quality, curation, attention, service, connection
9. Media companies -- including book publishers -- should stop thinking about business based on phony restricted supply
10. Media companies -- including book publishers -- should start thinking about how to build business around the actual drivers that will bring their customers to them (see #9 above), instead of sending them to the pirates

Epilogue

It was one of the best movies my friend has seen in a long while; and he has urged me to urge you to watch it. You'll love it (he says).

(Cross-posted at the Book Oven Blog)

Follow Hugh McGuire on Twitter: www.twitter.com/bookoven

Comments

[unitron]

It's a little difficult to have sympathy for the content providers when they take the view that if something goes wrong with the DRM on legally purchased content it's not their problem and purchasers are just out of luck.

http://arstechnica.com/tech-policy/news/2009/07/big-content-ridiculous-to-expect-drmed-music-to-work-forever.ars

I know somebody who, back at the beginning of this decade, wanted a copy of "Tie Dye Princess" by The Ides of March. If he could have easily purchased it in the format he wanted he would have--he could, if necessary, have afforded to hire the original band to come to his house and play it for him live, though probably only once--but downloading for free off "the net" was so much less hassle than trying to track down a legal copy that the industry screwed themselves out of a sale, and this is someone who has spent a considerable amount of money over the years buying music legally.

[MelRoy]

I seriously cannot believe you are promoting film piracy. Allow me to educate you.

In the UK, people have gotten used to seeing Chinese nationals (mostly women) going into pubs with large bags full of pirated DVDs. Some of the movies have just been released theatrically. All the DVDs were filmed with a handheld video camera in a theater somewhere and the sound and picture quality are invariably poor. But putting the quality issues aside, what about the seller? Well, the seller is part of an organized crime gang, brought into the country illegally. The seller (again, usually a young woman) doesn't so much get paid as pay (off her debt to the Triads). If she does well, she might pay off that debt in 20 years, if she doesn't get deported or die first.

The Chinese gangs aren't the only ones involved in film and music piracy. Terrorist groups - from the Provisional IRA to Al Qaeda - have their fingers in the piracy business. The proceeds from the sale of illegal DVDs - in the pubs of Great Britain, street markets in Thailand and Brazil - in the trade marts of Germany and in the United States, Dubai and pretty much every other corner of the globe - helps to fund one or more terrorist groups. Innocent people die because of film piracy - and by supporting this illegal trade you help pull the trigger, build the bomb and hijack the airplanes.

[timeforachangenow]

R U 4 Real???

"The Chinese gangs aren't the only ones involved in film and music piracy. Terrorist groups - from the Provisional IRA to Al Qaeda - have their fingers in the piracy business. The proceeds from the sale of illegal DVDs - in the pubs of Great Britain, street markets in Thailand and Brazil - in the trade marts of Germany and in the United States, Dubai and pretty much every other corner of the globe - helps to fund one or more terrorist groups. Innocent people die because of film piracy - and by supporting this illegal trade you help pull the trigger, build the bomb and hijack the airplanes.­"

this is that same OLD argument that the Bush cabal tried putting over on us for the last 8 years...8(

the sooner that people get off this "piracy" thing the sooner that the industry can go about finding a better solution to this problem...­8)

maybe it would work better for you if you just come over here and try living what you are preaching.­...8)

good luck mate...8)

me thinks it IS Timeforach­angenow...­8)

[MelRoy]

Yeah, try telling that to the people of Mumbai. The bomb attack that left more than 257 people dead in 1993 was almost entirely funded by DVD piracy.

I'm not making any of this up. Rand did a comprehensive study on the link between film piracy and international terrorism last year. You should read it.

I'm American, by the way. Are you surprised that Americans know something about the rest of the world?

[Hugh McGuire - Huffpost Blogger]

To play Devil's advocate, what would happen to all this illicit commerce and it's fuelling of the underbelly of the world if movie studios made movies available online for reasonable prices at the same time as theatre release?

Put another way: are you suggesting that the movie studios, by supporting DRM & refusing to make their movies available online at reasonable prices are funding terrorism? That seems like a bit of a stretch to me; I don't think the movie studios are that bad.

[MelRoy]

It would kill the theater business. There would be no reviews, no word of mouth, and without the marketing campaigns that surround theatrical releases, no interest in watching one film over another.

Do you know how much it costs to produce a feature film? How do you propose movie studios recoup their outlays?

Hey, I've got an idea. From now on, all movies should have a budget of $100,000 or less. Of course they couldn't shoot in high definition. They could use handheld domestic video recorders. That would be good. They couldn't afford to pay a real screen writer, but that's OK. They could hire high school kids to write the scripts. They couldn't afford known actors. That's OK, they can just pick up people off the street. Seriously, this can be done - watch "Bowfinger" if you don't believe me (just follow the plot and try to imagine it didn't cost $40 million to actually produce).

Theatrical windows have shortened enormously in the past 15 years. It used to be you had to wait a full year for a feature to make it on to DVD. Now it's about 5-6 months.

With all due respect, McGuire, you know precisely ZERO about the movie business and even less about film piracy.

[Jaywalkker]

I'll play devil's advocate for a minute. In this example, movies. Instead of giving them a release date/time in the theater before going to video release, the movie studios should instead offer a wider range of movie openings. So a person can choose to go out to a movie, stream over the web at home, and I presume, simultaneously buy a disk/rent and watch on traditional DVD or Blu-Ray. It may be failure to release disks at same time as theater premier, due to lack of knowledge regarding market demand, but I can see streaming a movie via internet at same time or soon after a premier.

Otherwise this is an opinion piece that advocates stealing.

[Hugh McGuire - Huffpost Blogger]

Actually the piece advocates making media available in multiple formats (theatre, DVD, and streaming online) simultaneously as a means to combat stealing.

[RightWingMarine]

so stealing is ok if you really, really want something?

[Hugh McGuire - Huffpost Blogger]

I'm not really sure if it's OK or not, but it sure seems to happen a lot.

But it does seem strange to me that we've built up this massive government subsidized regulatory system - copyright - which interferes (unsuccessfully) with free market activity.

[BlackJAC]

And yet without copyright there wouldn't be any incentive to create anything for said free market in the first place. I didn't write two books and four screenplays for my health, I did it for the money so I can quit my day job.

[Jaywalkker]

Its not a government subsidized regulatory system. The concept of copyright is a Constitutional mandate.

"To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries;"

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[WYHKTai-Tai]

Wow! I want to see this movie too!

& I agree, Studios have created the environment for piracy to flourish. With quicker or more broad releases, or even internet releases, they could obliterate prob. 90% of it. Why don't they?

[BlackJAC]

Because getting out of the house and going to the theater is part of the experience. Also, the only people who complain about stuff like this are no-talent Napsterites who are upset that somebody else got the talent, skill, and deal.