Writer David Gerrold Highlights Why Any Industry That Thinks File Sharing Is Bad Is Ignoring Customers

Business Models

from the indeed dept

Jeff Rife was the first of a few of you to send in author David Gerrold’s opinion piece on why industry’s fighting against unauthorized file sharing aren’t properly servicing customers. He kicks off the piece by making it abundantly clear that he does not, in any way, support the idea of unauthorized file sharing, but then points out the basic tenets of “marketing myopia,” where legacy industries focus on the product they’re offering, rather than the benefit they’re providing consumers:

After World War II, the government shifted many of its mail contracts from the railroad industry to the burgeoning airline industry. This was millions of dollars of revenue lost to the railroads. Because air travel was faster than trains, more and more people began to travel by air. As more people bought cars, and as the Interstate Highway System expanded, the railroads lost even more customers. The railroads still carry freight, but with the exception of a few high-density corridors, passenger rail travel in this country remains an intolerable mess.

This is because the railroad industry thought it was in the railroad business–they’re not. They’re in the transportation business. But they thought they were in competition and forgot about the possibility of partnership.

If the railroad industry had thought about providing genuine service to the customers, they would have partnered with the airlines. A train station can exist in a city center, an airport can’t. They could have established transportation hubs, with trains delivering passengers from city centers directly to nearby airports. By making it more convenient to use trains to connect to planes, both leaving and arriving, they would have simplified travel.

This is, of course, a point that we’ve raised for years. Gerrold then applies it to the RIAA (again, something we’ve tried to do a few times as well):

This is the same mistake that the RIAA and the SMPTP are making today. They think they’re in the business of selling discs. They’re not. They’re in the business of delivering entertainment. And they’ve forgotten that. At least, their lawyers seem to have forgotten it.

This isn’t the first time the entertainment industry has made this mistake. Almost forty years ago, Sony started selling Betamax videotape recorders for home use. Universal and Disney promptly sued, claiming that home video recording would create the opportunity for copyright infringement and they would lose billions of dollars. The Supreme Court ruled against them. Under the fair use provisions of the copyright law, it’s legal to record media at home for personal use. Even if some people might use videotape machines for illegal purposes, that was not sufficient justification for denying fair use to everyone else.

After losing that lawsuit, Disney and Universal (and all the other studios as well) began selling their movies on Betamax and VHS tapes, and later on DVD. Videotape sales became an enormous market for the studios and eventually DVD sales accounted for at least half, often more, of a film’s total gross income.

From there, he highlights another point that we’ve mentioned multiple times: if there’s “piracy” going on for your products, it generally means that you — as a content producer — are failing to provide what your fans want. Not serving your customers needs, because it goes again the product you sell is a recipe for failure. Going one step further and suing your fans for working hard to access the content they want is even worse. As Gerrold notes:

The only people who can benefit from that are the lawyers.

If your business model is more focused on benefiting the lawyers than your fans and customers, you’re doing it wrong.

Filed Under: business models, david gerrold, economics, marketing myopia