Angry Birds CEO Explains How The Company Embraces Piracy

from the not-so-bad-for-the-business dept

I was in the audience to see Eliot van Buskirk interview Rovio’s CEO, Mikael Hed, on Monday morning at Midem, but with so much going on at the conference (and then traveling), I’m finally getting a chance to write it up. Hed made a point of telling music industry execs that not only was the music industry’s approach to piracy entirely wrong, he believed Rovio’s approach was much smarter: embracing the piracy. I’d heard that Hed made it a special point to make sure that the interview included a discussion on piracy — and brought it up two separate times during the interview — saying that the company was basically doing exactly the opposite of the music industry:

“We could learn a lot from the music industry, and the rather terrible ways the music industry has tried to combat piracy.”

He explained how the important thing for the future of Angry Birds was to keep building “fans” and that piracy can actually help with that. He noted that they were “embracing” pirates where they could, recognizing that it could help the company get more fans. Later, he noted that if there’s too much piracy, it’s the company’s own fault for not providing access to the game in a convenient enough manner. His comments went even further than the comments from his colleague Peter Vesterbacka a few months ago about how the company used counterfeiting as market research to figure out where to invest.

Either way, it seems clear that Rovio has taken to heart many of the points that we’ve discussed here about proactive ways to deal with piracy: by recognizing that it’s an opportunity, not a threat.

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Companies: rovio

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Comments on “Angry Birds CEO Explains How The Company Embraces Piracy”

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Robert Doyle (profile) says:

Re: Re:

The labels won’t listen because they recognize if they go down this road they are doomed. That is because there is a distinct difference between what Rovio does and what they do.

Rovio created the game. They are more than just the gatekeepers. The people most upset about piracy in Rovio’s case are probably the folks at Apple.

Likewise, if the labels actually created to content, they likely wouldn’t be as upset about piracy. They are just the channel, not the content.

Anonymous Coward says:

These guys are very lucky that they came up with a product that both had appeal in their intended marker, as well as outside. They are also very lucky that the public latched onto it, and took it to places that they could not have planned for.

Basically, it’s a firehose, and no matter what they do, they will look good. But this is the old blind mouse thing, as no matter what they do, they will get the cheese.

fogbugzd (profile) says:

Re: Re:

>>Basically, it’s a firehose, and no matter what they do, they will look good. But this is the old blind mouse thing, as no matter what they do, they will get the cheese.

In other words, “Sure this works for a bunch of angry birds, but it will never work for washed-up rock stars*.”

*Instead of “rock stars” you can insert “over budget movies” or whatever gatekeeper-warded group you wish to use.

Anonymous Coward says:

Re: Re: Re:

In other words, “Sure this works for a bunch of angry birds, but it will never work for washed-up rock stars*.”

Masnick’s Law strikes again!

Now we just wait for Stevens’ Corollary:

“Any time Masnick’s Law is invoked, there will be someone who doesn’t understand it chiming in about how Masnick didn’t invent the identified business model, and so it shouldn’t be called Masnick’s Law.”

Colin (user link) says:

Re: Re:

You’re right, it’s totally luck. It had absolutely nothing to do with them making a great product and following that up with smart business decisions. In fact, I think you’ve solved the mystery: the record labels are just really, really unlucky! They aren’t terrible at adapting, things just aren’t going their way!

Anonymous Coward says:

Re: Re: Re:

There are plenty of other games out there that are as good if not better. These guys hit on a formula (intentional or accidental, we are not sure) that happened to hit as a game. From that, it took off and turned into a merchandise bonanza, something I am sure none of them ever considered in writing the game.

What they got is a firehose of public acceptance and demand, and no matter where these guys stand, they will get hit with it. What they are doing now is entirely reactionary, attempting to stay riding the wave for as long as possible.

Pet Rock, anyone? It’s about the same thing, really. When the public gets bored, their t-shirts and stuffed toys will be bargain bin, and life will go on.

Do you honestly think they could do it again if they wanted to? I doubt it.

Anonymous Coward says:

Re: Re: Re: Re:

The part you are ignoring is they have a “firehose of attention” because they continue to find ways to make accessing and enjoying the game simple and easy. If they had locked it down and said 10$ to play and fuck off if you try to pirate it they would have never been able to saturate the market like they have. They embraced new forms of distribution and got as many people as possible to play the game for free, quickly, on their desired platform.

You are right they are riding the wave, which is the smart thing to do. Recording and movie studios are fighting the tide, which is often the point of this website. Go with the flow, embrace the tech, and listen to consumer demand NOT pretend its still 1989 and if you yell real loud with your fingers in your ear any tech that has come out since then will go away.

Anonymous Coward says:

Re: Re: Re:2 Re:

The part you are ignoring is that the game was free anyway, so “piracy” isn’t really the issue here. They only evolved to paid version and ad supported models later on (as they attempt to milk the cow dry before it dies of old age).

“You are right they are riding the wave, which is the smart thing to do. Recording and movie studios are fighting the tide, which is often the point of this website.”

There are so many difference here, that it is hard to know where to start. They aren’t “riding the wave”, that suggests planning and preparation. Rather, they were swept up by a wave, and by chance, they look great at the top of it. It wasn’t a plan… they are just riding it out until it collapses. It is a short term deal, where they make as much as they can because they likely will never hit it again.

An industry (music, movies, software, whatever) cannot just ride itself into the ground to appear “good” for a moment. Riding the wave is a short term mentality. Mastering the waves and coming up with a way to bob to the top of the waves without being swept away in them is key for longer term plays, and that sometimes involves fighting against the current to stay in place. It means that you only move with tech or demand to the extent that it improves your current position in the long run, not the short run.

That is why many delivery formats for music have come and gone, and the “industry” rarely fell for them, no matter how good they seemed.

Many consider the entertainment industry to be slow. It’s not slow, it’s just careful and doesn’t get caught up in the “technology of the week”. They haven’t selected many dead ends in the last 50 years (the last big one would be the large laser discs, which some in the movie world loved… everyone else smartly waited for the second and third iterations that brought us the CD and DVD).

Anonymous Coward says:

Re: Re: Re: Re:

That just shows that no matter what the market conditions are if you have a great product in your hands you will sell it.

Piracy in those cases are not a problem and in fact act as an enabler unlocking new markets, aside from functioning as a lighthouse to direct their efforts where demand is strong, you compete with free and win.

They can do this and don’t need to interfere destructively with other lower level of the market that they can’t cater to, they enable the other markets that they don’t intent to be in to be attended by others and that keeps their products in the minds of a lot of people and that translates to bigger sales.

Now when you try to exclude everybody from the market and control it absolutely what you get is falling sales I thought that was abundantly clear in the case of labels, that tried to ascertain absolute control over the market failed and were severely punished by the public for it.

John Fenderson (profile) says:

Re: Re:

I too was waiting for this kind of comment. Techdirt has presented numerous examples of people who have managed to make good money by addressing piracy in a better way, and each time the objection is made that there is something, somehow that makes that case an outlier that couldn’t possibly be reproduced.

It’s funnier with music though. Small musician does it? Well, it only worked because they’re nobodies. Big musician does it? Well, it only worked because they were already big.

The fact is that there is nothing special about Rovio that made this approach work, outside of them having an excellent and appealing product. That it’s a gravy train isn’t the cause of their success (although their approach to pirates may have helped it become a gravy train).

I know this because I’ve done the very same thing and none of my products were at the blockbuster level of Angry Birds. However, all of my products, even the ones that weren’t the most popular, have been profitable, and that they were pirated actually helped that be true.

Note to naysayers: I’m not saying piracy is good and should be encouraged. As a businessman, I’m neutral on that point. I’m saying that piracy is a permanent feature of the marketplace and there are ways to handle it that can hurt you and ways that can help you, and it’s better to choose the latter.

Anonymous Coward says:

Re: Re: Re:

You have to think though: Did they do good because they had a great plan and executed it, or did they just flop around blindly in the dark and hit one something by complete accident?

There are tens of thousands of other app style games out there, and most of the makers of them would love to make enough money to recoup the cost of the coffee they consumed writing them.

AB isn’t a “success model”, it’s just a happy accident.

Anonymous Coward says:

Re: Re: Re: Re:

Mostly execution partially luck. But go ahead and just write off all the smart moves and hard work they did to get that market saturation. Angry Birds isn’t a household name purely by luck and accident. But hey if you dismiss it you don’t get to learn from their success, your loss really. Just don’t try to write any laws to prop up your outdated model.

PaulT (profile) says:

Re: Re:

So, you’re saying that because they created a quality product with wide-ranging appeal, their success was inevitable? That because they spent their time innovating, making a good game and then selling it correctly, they made money? That if they had just created a mediocre game that was just a clone of a million other games out there, they would have had a much harder time? that they may have failed, and whined about “piracy” instead of correcting their mistakes?

By jove, I think he’s finally getting it!

Anonymous Coward says:

Re: Re:

It wasn’t like that originally. Used to be a for purchase game only. I believe part of “embracing piracy” for them is saturating the market with their own versions and make money off the adds. Like you say there is no reason to pirate the game because there are tons of different ways to get a free legit copy.

Gabriel Tane (profile) says:


hurr hurr sounds like Hed is drinking Maznik’s kool-aid.

Sorry… feeling plucky today. I like the fact that there’s yet another example (because, you know, it won’t work for everyone) of how you can turn piracy into a boon. And make a great success at it as well.

My example: Shared my copy w/ my two girls… Cost Rovio what? $20? $30? Now they both snatch up Angry Birds Merch wherever they can. Already paid Rovio over $100 last year alone.


fogbugzd (profile) says:

Re: Re:

>>This AB fad won’t last forever.

True. But in a real capitalist system no one is guaranteed that their innovation will guarantee a permanent profit stream. Too many people in the IP industry have an entitlement mentality that says “I used to make a lot of money, but I am not now. It must be someone else’s fault.” If you don’t innovate you loose. Unless, of course, you own Congress.

akp says:

Don’t be fooled. They’re just as aggressive about defending their IP as anyone else.

I was on the receiving end of a C&D for daring to post handmade Angry Birds homage jewelry on Etsy. The description was clear that we weren’t mass-producing, each item was handmade. We were still forced to take them down.

“Embracing piracy,” my ass.

Anonymous Coward says:

Re: Re: Re: Re:

This is true, if a company does not protect it’s IP the law clearly provides a case for abandonment.

No, it’s absolutely false.

TechDirt really has never discussed this subject.

As far as I know, this is true, and I wish Mike would set the record straight – as the amount of misinformation about it (such as your post) is staggering.

Josh in CharlotteNC (profile) says:

Re: Re: Re: Re:

This is true, if a company does not protect it’s IP the law clearly provides a case for abandonment. TechDirt really has never discussed this subject.

We talk about this all the time. Look up any story involving Monster Cable. Or the Kellogg’s toucan story. Or any story about a website. Most cases Techdirt covers involves a company overreaching far beyond what trademark law covers into situations where there is absolutely no consumer confusion. Monster Cable is not going to lose its trademark to abandonment if they fail to sue Monster Mini-Golf because there is no consumer confusion that the companies are related.

PaulT (profile) says:

Re: Re:

“I was on the receiving end of a C&D for daring to post handmade Angry Birds homage jewelry on Etsy. The description was clear that we weren’t mass-producing, each item was handmade.”

What does that have to do with piracy? You infringed on their trademarks, and attempted to profit from them by producing knock-off physical goods. That’s a totally different thing to piracy.

fogbugzd (profile) says:

>>Yay now let’s all go pirate Angry Birds to make his company even more successful!

If you try to pirate the game, here are some things to consider:

1) You probably don’t need to pirate it. You can probably play it for free using a Rovio approved channel. Rovio still makes money from the free version by selling advertising in the game.

2) From the user perspective, not all types of free are equal. In this case “free from Rovio” means that you have to put up with ads (so maybe not entirely free). On the other hand with a pirated copy I have to search out the game and then run a major risk of spyware. So the pirated version is not entirely free, either. It is possible to compete with free, because in the final analysis the authorized version of free is probably a better deal for both the user and the company than the pirated version of free.

3) If I do successfully pirate a safe copy of the game I have not really cost Rovio a penny because I most likely would not have paid for it if that was the only option. However, I might buy some AB merchandise or introduce the game to someone who will pay for it or use the ad-supported version. I might even get hooked enough that I go looking for “AB Seasons” or some other version of the game and end up playing a paid or sponsored version of the game. In addition, if enough people play a certain game it starts to get the attention of investors and other potential business partners. So even if you do go pirate the game you may make them more successful.

So you were correct.

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