Piracy: A value proposition

21 Feb 2012

When a consumer desires digital content, they have two choices available: pirating or purchasing it. People may never consider one of these options, or they may not even realise that they have an option at all, but I’m talking about your common internet-literate digital consumer.

Consciously or not, consumers will weigh their options here based largely on two factors: Cost in time (hassle), and cost in money (price). You can even equate the two if you’d like but I’ll keep them separate for now. Both of these facts work into purchasing content or pirating it, and by weighting them differently, consumer behaviour can be adjusted.

There are two things to remember here: Piracy is never going to disappear, and everyone places different values on their time vs their money. What content providers can do is tip the scales in their favour, which they’ve started to do recently: Steam, the iTunes store, and app stores on phones all are excellent examples of reducing hassle for consumers. On a smaller scale, the Humble Bundle and Radiohead have worked on adjusting cost in money, as well as Steam sales.

Pirates are working to reduce hassle on their end, too. Bittorrent has made it easy for a single person to distribute files to many without expensive web hosting, and Usenet binaries are an order of magnitude easier to deal with than they were five or ten years ago.

This is essentially the point of all counter-piracy activity (shutting down sites, suing users, DRM, etc) - to increase the hassle on the piracy side to tilt the scale back in the content creator’s favour.  However, care must be taken not to increase hassle for your existing users: if, by putting DRM in your game, you make it more of a hassle to play for some of your legitimate users, is that going to be worth the (perhaps minor) additional hassle that you’re putting on those who try to pirate?

The important thing to keep in mind here is that for some their time is so cheap and funds so low that convincing them to purchase the game is near impossible. I think a lot of content providers try to prevent these people from pirating at all, and this is a futile effort: some people will pirate your content no matter what. It’s pointless going after them; time would be much more well spent on the people that are actual potential customers.

This comic from The Oatmeal illustrates the problem well. Assuming there are customers who want whatever you’re making, here’s how you can convince them to get it from you:

  • Lower the price. This is usually difficult to adjust, and may have already been set by market conditions anyway.
  • Lower the hassle. Put it on Netflix, Steam, iTunes, sell it direct from your website. Just don’t make me visit a store or wait for delivery.
  • Increase the hassle of pirating. DRM, DMCA takedowns, whatever - just be sure you don’t affect your legitimate customer base.

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