why piracy is winning against the studios
Posted by Steve Woolf

On this week's show we talked at some length about the firestorm of coverage and conjecture surrounding the conviction of the Pirate Bay founders on charges of aiding copyright infringement in a Swedish court. Warners, Fox, Sony, and EMI led the fight and hailed it as a great victory.

They couldn't be more wrong.

Not only is activity up on sites like the Pirate Bay, but millions have been made aware of the case and have turned The Pirate Bay and its founders into symbols of a larger ideological fight. Since the case is being appealed anyway, it could be years before any action can be taken to shut it down.

I think the studios look at people who use the Pirate Bay website as thieves, scrambling for their wares any way they can to avoid paying for them. To them, this is no different from the Napster case of the 90's, and having seen what that did to the music industry, they are not about to let Hollywood fall.

Only it has already. Right around their ears. And they don't even appear to know it.

Before I get into why, I do think it's necessary to state that no artist deserves to have their work stolen, nor do the studios. In an ideal world, the rightful owners of entertainment should be able to distribute and earn revenue as they see fit, at whatever price they wish.

Of course, in an ideal world I should be playing centerfield for the New York Yankees, moving into my veteran years with a Hall of Fame resume and a fistful of rings. The message here is that we do not live in an ideal world.

The consumption of media has changed radically in the past ten years. We no longer understand the idea of purchasing physical media, waiting in lines, and managing our schedules around television programming. The world has changed, and we want our media when we want it, how we want it, and where we want it. Because the studios have failed miserably to anticipate the market, or even to properly react to it ten years into its evolution, they have been relegated to expensive and pointless courtroom battles that are merely staving off the inevitable.

So why does piracy exist? Are people really just thieves underneath it all? Of course not. People use sites like the Pirate Bay because it's available to them.

Think about that statement: it's available to them.

Corporate Titan sez: "Well, let's just shut down these sites, make the tools illegal, and continue doing business as if it never existed." Except you can't. Once the tools are out there, it's game over.

Consumers dictate the direction of the market, and in the last few years all we have seen, at every turn, is that consumers want what they want when they want it. Simple, right? But what we see from the studios, at every turn, is a reluctance to acknowledge that their fundamental business models have to be adjusted to fit the modern media landscape. They are attempting to milk the last dime out of physical media like DVD's, which is their right, but at the same time their attempts to be forward-thinking have been non-existent. From the ground up, studios need to look at the way rights are handled and rewrite the books to open up access so that they can deliver what the consumers are absolutely dying to have.

Think about that statement: absolutely dying to have.

Imagine for a second if legal entanglements around rights and territories did not exist. If you work in the entertainment industry it's impossible, I know. But indulge me. If just one of the studios decided that they would make every single movie, television episode, and song in their library available to consumers to watch or listen to at their discretion, there would be an explosion of demand. A pent up market would rush to the door of whatever entity was making this happen. This studio would be smart to charge a reasonable subscription rate to stream the media in superb quality to computers, televisions, and mobile devices for, say, $9.99 a month. All you can watch. Or if they want it piecemeal, sure, $2.99 to rent the movie. Consumers would even put up with tiered pricing. Recent hits could be $3.99.

Imagine if we saw that kind of leadership from traditional media. It would be utterly transformative. The technology exists to make it happen TODAY. I mean, I basically just described the iTunes store, didn't I? Further, we have yet to even see the consumer devices of the future that will make access to this kind of media ubiquitous. This is because of the snail's pace at which big industry is capable of change.

So, we know they won't change until they absolutely have to, until it looks like the last easy dime has been milked, until the fat lady has sung. And by that time three people in a garage someplace will have created a company that will put them out of business forever because they were too bloated and stubborn to devote a half a percentage of their annual marketing budgets into pioneering a new way of distributing their vast libraries of entertainment.

Game over.