Valve Exec: Pirates Are Just Underserved Customers

from the and-then-you-see-the-opportunities dept

We've had a ton of people submitting this, so figured a quick writeup is in order. Jason Holtman, the director of business development and legal affairs for Valve, was speaking a video game conference, when he noted: "Pirates are underserved customers." This is a point that plenty of folks have been making for a while, but having an exec at a company like Valve make it is important. But, even more important was his next sentence:
"When you think about it that way, you think, 'Oh my gosh, I can do some interesting things and make some interesting money off of it.'"
This past weekend at the MidemNet conference (on which I'll be writing much more), I heard a few music industry folks say something at least somewhat similar to the first part of the comment: talking about how they had to learn to bring "pirates" back into being legitimate customers. But, then they missed that second part. As one attendee said, the music industry execs kept freaking out about how much money they will lose, while ignoring how much money there is to be made.

Filed Under: jason holtman, pirates, underserved customers
Companies: valve

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  1. icon
    PopeHilarius (profile), 11 Jun 2009 @ 12:05pm

    Re: Pirates are underserved customers.

    @Michael Long

    I think a lot of these arguments get muddled by using morality-laden words like 'fair'. There's nothing right or wrong about any price. But .99 cents for a song -is- too high (economically, not ethically), because the marginal cost of delivering me that song is $0*.

    So no one needs justifications/rationalizations you put forward (though people do, of course). The simple fact is downloading a digital product incurs no cost to the producer. Any prize above zero is artificial, and economics tells us it'll have to come down. There's no morality here, it's just the way the market'll go. You can't charge money for something that's actually free, in the long run.

    * Actually infinitesimally above zero, factoring in electricity, bandwidth and other frictional elements.

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