Monday, January 9, 2012

Why SOPA is unnecessary

People will pay for content:
Comedian Louis C.K. recently self-released a video of his stand-up special, “Live at the Beacon Theater,” for $5 online. He personally paid for the production costs up front in an experiment to see if this was a cheaper, more efficient, and less restrictive method of getting his content to his fans. In doing so, he cut out paying the middlemen — including the marketing team — and avoided the red tape of working with studio executives.

In twelve days, Louis C.K. earned more than $1 million from people downloading the special — far more than the $170,000 it cost to produce the video ...

Without the luxury of stardom, Louis C.K. sold $1 million of video downloads by trusting his audience. He showed this by selling DRM-free videos, then gently asking them to purchase, not pirate. This openness built a relationship of mutual trust and respect with his fans.  Companies looking to create successful online marketing campaigns should try to build similarly long-term relationships with customers based on trust and direct communication.
It's harder to treat your customers as, well, customers than it is to tell them to take what you serve up and like it.  It's no mistake that the MPAA came out of the Film and TV world, where their customers are expected to passively sit back and watch.  But treating their customers as being a bunch of thieves has not developed a relationship that lasts.

And so, the MPAA has bought a bunch of Congressmen, to make institutionalized contempt and suspicion the law of the land. Compare that to Louis C. K.  He put up his show with no DRM, and people downloaded it on the honor system.  After paying for it.

Can someone please explain to me the "problem" of piracy?


Anonymous said...

Piracy generally kicks in when people are charging too much for something. 5 bucks for a comedy special is good, but at 10 or 20 bucks and he would have very few sales and lots of piracy.

The problem with digital goods is the normal supply and demand equations are missing and the supply variable. This leads to clumsily attempts at price fixing and piracy when the price is too high.

Eventually someone is going to get things right by giving people full rights over their digital property and use automatic auctions to sell off a limited number of items over a given period of time to get the early adopters to pay more and allowing people to transfer their copy of the item when they're done with it.

Ruth said...

Baen books has a similer policy. Ebooks contain no DRM.

They note that in every case where they have gone through the effort to put an older title on the online format not only does it get downloaded tons, but suddenly the deadTree versions start selling like hotcakes. And interestingly enough, though there is a large spike of such when the "new" ebook is put up, it never completely falls off either, sales remain higher than they were before the ebook was availible.

DaddyBear said...

Ruth stole my thunder. I'm more likely to go to Baen for a good read because I like doing business with someone who treats me like an adult.

The Czar of Muscovy said...

The enemy here is the MPAA, who has long held this paranoid (and inaccurate) view that piracy--which is THEIR word--is rampant. What they seek is not justice, it's monopoly. They want to charge whatever they want for content, rather than let the free market decide.

Apple's iTunes is absolutely proof that people would far rather pay for a legal copy if it's inexpensive and easy to obtain; they tend to pirate only hard to obtain material or crap products sold for the same price as great products.

Hollywood (movies and music) is to blame for all of it, but they point their finger at the customer yet again. And the MPAA's only answer for everything is more legislation.

Ken said...

That's because the market rewards customers, but disciplines businesses.

In the long run businesses benefit, but in the short run it's pain, so (the thinking goes) why work for a living, when one can farm the government instead?

lelnet said...

"Apple's iTunes is absolutely proof that people would far rather pay for a legal copy if it's inexpensive and easy to obtain; they tend to pirate only hard to obtain material"

What's driving most of the piracy isn't the content producers' insistence on compensation, it's the middlemen's insistence on control.

Want me to pay to watch the BBC's new Sherlock Holmes series? Sure, just tell me where to fill in my credit card (or paypal) details. Want, rather, to tell me I'm not allowed to see it at all until May, just because I live in the US instead of Britain, and then won't be allowed to see it in order or record it on a modern medium? Well, can fsck off, because I can get it on BitTorrent right now.

Rev. Paul said...

SOPA isn't about piracy; it's about control.

Dave H said...

Janis Ian's experience echoes Louis C.K.'s:

She mentions fantasy and SF author Mercedes Lackey, whose free book offering at Baen actually drove up sales of her dead-tree books at DAW. (Article was written in 2002, so a few names have changed but the principles are the same.)

Jake (formerly Riposte3) said...

What Matt said, with one addition: If my only choices are between bittorrent and a DRM'd version I can only access on certain proprietary devices, well, I like to know that when I buy a new computer I won't have to screw around with authorizations, deauthorizations, device specific licenses, restricted formats, etc.

I want my music and videos and ebooks to work on my iPod, my linux pc, my windows partition, my phone, my hacked Nook Color, or whatever other devices I may have now or acquire in the future. If you only want me to be able to access the content I've paid for on "up to" x number of my devices, using only your proprietary software that only runs on Windows or MacOSX, then you can fsck off.

Jake (formerly Riposte3) said...

Oh, and to echo what Ruth said:

Baen also found out that when they put free ebooks up as a "the first hit is free" thing, that sales of both the dead tree versions and the paid ebook sequels (and/or the author's other works) went up, and piracy of the original works once they left the free section didn't.

The benefits of treating customers like adults, indeed.