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
    JackAlias, 8 Aug 2006 @ 8:42pm

    You already answered your own question. The missing part is possibly your not fully understanding what is behind the idealisic, or diabolical, as you said idea that information wants to be free. For one, I don't think many people actually think that information has actual needs, and or wants, and two I would recommend some reading on the topic, such as HACKERS, by Stephen Levy, which is a fine read, and goes into a lot detail on the history of computing, and the ethics that are related to information technology, or the many online resources, and THE HACKER ETHIC by by Pekka Himanen, Linus Torvalds, Manuel Castells, or any of the stuff by the Swedes at Pirate Bay, or any Swede really. Also I would suggest trying hard to put away pre-concieved notions while you look into that, it will be difficult psychologically becuase you have so much personally invested in being able to make a living in the areas of Business and IT. Try to pretend that the idea of information being free wouldn't put you out of a job. Not because it won't, but so you can think clearly on the subject.

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