Yo, ho! Lessons from Piracy for industry dynamics
November 15, 2007
“Yo, ho, haul together,
hoist the Colors high.
Heave ho, thieves and beggars,
never shall we die.”
Let’s be clear from the start: piracy is a plague. The world would be better off without it, and I condemn it completely.
However! There are, to my mind, interesting lessons that can be learned from piracy, lessons that could change, in the long run, the panorama of music and video industries.
“Haul together, never shall we die”. Though, I admit, the reference to Pirates of the Caribbean is a bit dodgy, it nevertheless illustrates that piracy is a massive phenomenon that has always existed and will continue to exist. In response to this phenomenon, music and video industry majors have reacted, understandably, by raising barriers and making it harder to pirate material. Needless to say these efforts have always been followed by corresponding hacks allowing to overthrow protection. So on one side we have companies investing, often heavily, to try to protect material, and on the other side we have an unidentified mass of hackers working freely to allow an even broader mass of pirates to have access to music and video. It seems to be a lost battle for industry majors, but they really have no choice if they want to make at least some money.
But does someone have a choice?
The problem with digital media, the majors claim, is that it can be easily copied and distributed for free. It is certainly a problem for companies that actually make money by copying and distributing. However, companies are not alone, for we have not yet mentioned the central characters here.
The artists themselves. Yes, of course they suffer from piracy, but it seems to me that they suffer only because they rely too heavily on the industry as it is today –i.e. roughly as it already was before the digital era arrived. It is astonishing that such a dramatic technical revolution has had this little impact on the industry organisation. Artists now have technically all the necessary means to make their creations available to the entire planet without putting a single penny on the table –apart from the actual production costs.
A whole world of possibilities is open, for those who stop a minute to think out of the box (to name one, sellaband.com, for instance). Imagination has rarely been scarce for business models, and the spur of piracy should, well, spur the mutation of the music and video industries.
So artists, if you want to make a CD, go ahead, but you’re warned: it WILL be pirated. Industry majors, if you wish to continue making them, go ahead, but they WILL be pirated.
It’s high time to stop whining about the whole situation, and get a move on, create, make money in unexplored ways, and, since it cannot be eradicated by fighting it, keep Piracy to the 20th century by making it obsolete.
alexandrelucas
Kari Silvennoinen
Steve Danino
Lucien Huang
raphael encaoua
Leonard Sellem
Fidji SIMO
Matthias Schwenk
Remy MIRALLES
ceciiil
Emmanuel Perez-Duarte
Raj Sheelvant
Georgia
November 15, 2007 at 11:47
Piracy is one of the complex problems on the internet, as is, incidentally, the business of music.
The reason why music is so complex is because there are countless artists battling for the attention of listeners and those that win, are usually the ones who have invested the most marketing-dollars.
Some artists have come to the stage that they no longer need record-producers—they can fill concert-halls with their name alone. But even they need to reach a certain % of loyal fans, who don’t want to listen to digital music, instead want a traditional CD. So they too need distribution. Which is why Radiohead is also selling a CD in January, and working with a record-company to do so.
Now piracy is a whole different animal. First of all, nobody knows for sure, what % of piracy comes from people that wouldn’t have bought the music in the first place. You see many kids with 10,000 songs “in their pocket,” and I’m sure their parents would not have given them €/$ 10,000 to pay for that.
Second, people are trained to no longer pay for music, and the only way to overcome that is to scare the crap out of people with lawsuits… which comes from the big boys, hired by the artists.
In today’s world, record companies, i.e. intermediaries who do the dirty work (financing studio-time, marketing, distribution, lawsuits) will continue to exist. And people will continue to fight it, because, hey they are human and love doing stuff that they are not allowed to do.
In my utopian world, all music will be free and artists make money from concerts and other interactive—hard to replicate—media. And then, indeed, piracy will be obsolete, because it will be legal.
November 15, 2007 at 12:13
I mainly agree with you, except on some points:
-”The only way to overcome piracy is to scare people with lawsuits”: that is a lost battle, piracy will not disappear with that.
- Concerts and tours usually are not a substantial revenue for artists (I’ve discovered this recently thanks to Jeremy), but there are other ways to make money, like a sophisticated global licence (say, on a website, fans can listen to 30s of songs of an album, and if they like it, they put some money on the table, and if a certain amount is reached, all songs are made public and free of rights), or corporate patronage (kings used to do this, why not banks today? :p), etc.
- … and then your utopian world (mine too) could be not that utopian actually.
November 15, 2007 at 15:57
As for lawsuits, I agree with you. However, just like with any intellectual property, copyright, or trademark issue, the owner has to send out a signal to the market that he is willing to protect it. If record-companies were to send out a signal that they condone the infringement of their copyright, they are essentially giving it away. Whether the lawsuit is effective or not in returning lost revenue is a different issue, but they are certainly a permanent fixture to any creative enterprise.
As for the alternative business models, very interesting!
However, I believe is that large corporations representing a large number of small producers serve a very important role related to bringing economies of scale to a number of functions that are too expensive or complicated for individuals to undertake. Distribution, marketing, legal issues… all these are more efficient if done on a group-scale than on a per-artist case.
And naturally these will create clashes with consumers, because there are plenty of individuals who don’t like to be treated like a faceless entity.
But for a large part, intermediaries are here to stay… even if IT enables cheaper production and distribution. Because that will just lead to an excess of supply, which means artists will need strong differentiating factors, which will require expertise and will likely be expensive. And since there is no demand, they will need to go with some kind of monopolistic organisation that can guarantee it. Etc. etc. the cycle continues.
November 15, 2007 at 16:24
Interesting point of view, I didn’t see it that way, but true, intermediaries are probably here to stay (apart from exceptions like Arctic Monkeys)… though not necessarily following the same business models: among others and among other possibilities, iTunes and -again- Sellaband are indeed new kinds of intermediaries; following the previous idea, patronizers could also play the role of music majors and concentrate marketing, legal issues etc.
November 16, 2007 at 15:06
Well you haven’t sold me yet, Emmanuel!
But I know a number of independent musicians and I’ll consult with them about their position on new business-model and piracy.
It’s interesting, because stealing (which some would also call piracy) is also the life-blood of a lot of creators. As Picasso said: “good artists copy, great artists steal.” The recent Layer-Tennis competition is a great example of the principle. It’s perhaps not the same thing as user-based stealing, but I think somehow related to the whole issue of valuing original vs. derivative art and where art comes from.
Edit: very relevant to this issue is also the great “Good Copy, Bad Copy” documentary!