You Compete With Free Because You Have To

from the welcome-to-the-marketplace dept

One of the frustrating things in discussing intellectual property issues around here is that every time we suggest a company is making a mistake in its business model, such as by treating its customers as criminals, someone steps up to yell at us for "defending piracy." That's not true at all. We do not, and will not, defend piracy in any form. What we will do, however, is note that most attempts at fighting the piracy are wasted effort that is bad for business and often alienating to legitimate customers. That has been our point all along. Piracy is in the market place and it's simply a fact of the market.

There's increasing evidence to suggest that the best way to "fight" it isn't to lock everything down and limit your legitimate customers, but to change a business model and provide a compelling offering at a reasonable price that people want to pay for. Over time, we've discussed numerous examples of how that works. The simple fact is that some amount of piracy is a market reality -- and there are two strategies to dealing with it. One is to try to fight it directly and lock everything down. That's the path the recording and film industries have chosen, and it hasn't done much to help at all. The other is to admit that not only can you compete with "free" by offering something of value, you can often use the "free" stuff for promotional value -- leveraging that aspect that others in the industry see as a weakness. It's always good to see when companies at least recognize this market reality. Take, for example, this quote today from the head of an Israeli company: "The goal of the world is to beat the Chinese. They don't care about intellectual property. We have to develop something that will take two to three years to copy." In other words, he's recognizing that the market reality is that you have to compete where some element of the market simply won't respect intellectual property laws. That doesn't mean it's impossible and you shut down, but that you adapt to the market and figure out ways to compete anyway.

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  1. identicon
    P Matiure, 13 Aug 2007 @ 6:41am

    Cultural policy to blame on piracy

    When I suggested that the solution to piracy was that musicians should sell their own music I thought I found the culprit with their nap down,but tell you what the crime seems to be magnifying every minute.Now I am back on the drawing board.I think I am now redirecting my bullets towards Cultural Policy makers. Do we have it?If there, what does it say?Is it protecting the artist.What about Culturo-polical issues? Are they addressing the issue of piracy.Surely we can not afford to have great musicians like Oliver Mutukudzi of Zimbabwe crying fowl over the selling of his unreleased album which he recorded in SA.This clearly shows the magnitude of the seriousness of the issue.We upcoming artist are now hunting with salt in our pockets.We do not know whether we will enjoy the fruits of our hunt alone or with hyenas.Please let us dialogue over this issue.The scholars,artists,sponsors,non-governmental organizations and governments, lets protect our respected celebrities' intellectual properties.

    By P Matiure (University Of Kwazulu-Natal)

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