One of entertainment executives' favorite clichés is that "you can't compete with free", a comment that's little more than a cop-out. Rather than evolve their business models to compete with piracy, they just utter the line and throw their hands up. The statement's not only frustrating, it's also wrong, because whether they like it or not, they're already competing with free -- and, in many ways, succeeding. Every time somebody buys a movie ticket or a CD, the studios and labels have successfully competed with free. The challenge for these companies then becomes figuring out how to make money from those people who want their content, but don't want to pay for it in the current market. While groups like the RIAA, IFPI and MPAA try to resist the changing market through the courts or other brute-force means, some companies are actually embracing it. For instance, Electronic Arts didn't think that it would be able to sell many copies of its latest FIFA soccer video game in South Korea due to piracy, so it gave the game away, choosing instead to sell small enhancements to the game for small amounts of money. It's since sold 700,000 of the add-ons. Advertising offers another avenue for media companies -- even some record labels are licensing their libraries to companies hoping to build ad-supported subscription services. While many (or even most) of these efforts will fail, they'll lay the groundwork for the future of the entertainment and content business -- a future that doesn't revolve strictly around the direct sale of content. So just remember, the next time a big-media bigshot says "you can't compete with free", they really mean "I can't be bothered to try competing with free".
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