Friday, May 19, 2006

Pirates and the Second Tier

Arrr! There be pirates! And today, we be talkin' music pirates.

There's been a lot of jibber-jabber from all sides about what kind of stand any given media should take on piracy. Some people think piracy is not bad, some people think it is outright theft, and a lot of people can make sounds like a motorboat if they bleeble their lips.

Me, I'm of the opinion that what you think about piracy is totally irrelevant. There are pirates. They will steal your stuff. If you encrypt it, they will tear the encryption apart. Three days is what a popular piece of media has if it is pirate protected.

You have three options:

1) Make your sales to non-pirates. Minimal protection that pirates can break without any trouble, but everyday joes will be okay with. iTunes does this.

2) Make the majority of your sales in the first three days. More and more AAA games are relying on this. It's viable for certain kinds of content: news, stock reports, etc. Music and games really aren't really a time-sensitive media, though, so...

3) Use the pirates.

My favorite option is the third option.

What you do is give away your first-tier product. Or, if more suitable, encourage people to steal it. The Grateful Dead, for example.

This first-tier product is what people commonly think of as a product. It might be a song, or a search, or a game. The point is to get it to be as ubiquitous as possible.

Then you have a second-tier product. This is a product which is intrinsically linked to the first product, either emotionally or algorithmically. This is what you sell.

The Grateful Dead didn't sell music: they sold concerts. Google doesn't sell searches: it sells advertising on those searches. Webcomics don't usually sell comics: they sell add-on bits like posters and collections and limited-edition crap.

When it comes to pirates, they are essentially sources of attention. Get them to use your stuff, and if it's decent, their eyes are now on you. Then you can leverage that attention, either making the would-be pirates pay for additional services or by finding people who want to connect to those would-be pirates.

So, music industry. If you were the music industry, and you were simultaneously me, what would you do?

How about iTunes? Pretty good stuff. Music sold cheap. Listen for free to radio stations. Pirates take it, but that's okay. What about this add-on:

Dollar ratings.

Pay a dollar, rate a band or song. This changes its ranking, its likelyhood of showing up at the top of the searches, in the radio streams, and what the quotes which pop up in the corner when you go to their sub-page say.

You think Spears sucks? Pay a buck, tell the world. You think Kenna rocks? Pay a buck, tell the world. Change what other people hear by paying the coin.

And when a song gets too popular? A self-correcting feature as people pay a buck to rate the song down and say, "I've heard it a million times!" Extra cash.

I can think of a few bands I would pay to rate, and I'm a hard case.

Anyhow, I think it's an awesome idea.

5 comments:

Darius Kazemi said...

Except then Britney Spears' label spends $2 million (pocket change) to skew her ratings.

A Nakama said...

People are more than happy to give their opinion for free. To pay to give your opinion, though? It'll probably work, but it wouldn't be wildly popular.

In terms of the music, I find this schema to be more feasible, in that users are asked to pay what they think the song is worth.

There's an entire book about this sort of thing.

Craig Perko said...

Darius: And that's different than now how, exactly? It would be interesting to see which wins: people who hate Spears, or her ten-million-dollar budget.

Nakama: I would be surprised if it failed on a popular music portal such as iTunes. People really love giving their opinion.

Amusingly, the more it fails, the more worthwhile it becomes to spend that dollar because your voice is louder in the silence.

"Pay what you think the song is worth" works great for personalities. A lot of webcomics do that, and several of them make a significant amount of cash. But it's not good for giant corporations, even good ones like Google. Corporations don't inspire as much sympathy and, therefore, don't get as many donations. :)

Duncan said...

It's not the donations, it’s the incentives. I, too, recommend reading Freakonomics. To reduce piracy (I wish people would stop saying that they will stop it, they won't), you have to change the incentives that they face.

For instance, the positive incentives to steal music are low cost, and a large selection of popular works. There are actually more negative incentives, if you care about the quality, the source (viruses and spyware), and the limited selection. But people feel justified because so much has been written about how little the artists really get from the music that is sold, and how bad the publishers are. They see themselves as justified, in a Robin Hood sort of way.

If you get the book, read the example of the Daycare that instituted late fines. It was meant to deter parents from coming late to collect their children, but instead had the opposite effect. It increased the number of parents who came late to pick up their kids. By paying (because the fines we reasonable), they felt it was okay to show up late.

They have to make buying feel good, and stealing feel bad. And they have do it without making the pirates feel justified.

Craig Perko said...

Okay, guys? Chances are, I've bought more copies than all of you combined, since I give them away. I'm also up to date with their blog.

"For instance, the positive incentives to steal music are low cost, and a large selection of popular works. There are actually more negative incentives, if you care about the quality, the source (viruses and spyware), and the limited selection."

Speaking from a, oh, definitely-not-a-pirate-nosiree standpoint, those negatives are obsolete arguments. A pirate can find high-quality versions of any song that's sold more than a hundred CDs.

As easy as on iTunes.

Spyware comes with the purchased songs, unfortunately. It's one of the big reasons I don't use iTunes or Sony players: I have to go to the trouble to break the protection before I can move the song somewhere useful. This is especially awesome with the Sony device my mom purchased, since she was recording her own music and it had this awe-inspiring glitch where it refused to allow her to take the music off the fuckin' device. It automatically stamped it as copyrighted and illegal to distribute.

Yeah. Fuck Sony.

"But people feel justified because so much has been written about how little the artists really get from the music that is sold, and how bad the publishers are. They see themselves as justified, in a Robin Hood sort of way."

Yeah, that's definitely true. Not that I would, uh, personally know or anything...

"If you get the book, read the example of the Daycare that instituted late fines."

Worse, it didn't return to the original state when they cancelled the fines: the parents continued to be assholes.

But I don't see how that applies, here...

"They have to make buying feel good, and stealing feel bad. And they have do it without making the pirates feel justified."

Hmmmm... you are talking first-tier products. I'm talking using your first-tier products specifically to get attention you can leverage for your second-tier product.

If you do that, you want your product to be distributed for free - even if you do charge for it. The more that gets distributed for free, the more second-tier product you sell. This is a very successful approach, if your first-tier product can be replicated easily.