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How to Win the Piracy War: Offer Premium Content at a Fair Price

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From 1999 to 2001, I was a reporter for MTV. com, with a nebulous beat that included everything from covering Eminem’s court dates (he had plenty of them in those days) to interviewing the likes of Green Day, Prince, and Don Henley about their latest releases. It ended up being more celebrity news than music journalism, but that era did include one meaty, consequential, ongoing news story that I was fortunate enough to cover regularly: the rise and fall of Napster, and the music industry’s flubbed response to large-scale piracy.

Even a copyright maximalist such as Prince -- who, unlike most other artists, goes so far as to regularly refuse to grant permission for others to cover his songs -- understood why fans turned to Napster instead of buying music. CDs had become so expensive, and albums were bloated with so much filler, that consumers didn’t want to shell out $18 for one or two songs they liked and a dozen that they didn’t.

The music industry’s solution, eventually, was digital downloads, in particular iTunes, which allowed consumers to purchase music by the track rather than by the album. That hasn’t saved the industry, and streaming services are worse for artists than iTunes or physical media, but almost every one of them (save for Thom Yorke and a few other holdouts) is on Spotify, however reluctantly.

The movie and television industry has mostly learned from the music industry’s mistakes, and instead of publicly prosecuting pirates in high-profile cases that turn consumer sentiment against them, rightsholders have instead embraced online delivery to one degree or another from the beginning, while going after pirates quietly. That’s because they realized early on what their counterparts in the music industry didn’t: however rampant it appears to be, piracy is still a relatively small problem, and the best way to combat it is by giving consumers access to the content they want, on the devices they want to watch it on, legally and at a decent price, especially now that DRM technologies are less onerous and invasive than they were even two years ago when I (misguidedly) called for their end.

A recent study by Irdeto suggests that the strategy is working. According to the study, 70 percent of adults in the U.S. “never” watch any pirated movies or TV shows. According to a presentation Futuresource Consulting’s David Sidebottom gave at this year’s Streaming Forum in London, that’s in part because services such as Netflix and Amazon Prime Instant Video give consumers access to a wide range of content at a reasonable price point -- about $8 per month.

At that price, a subscription to Netflix or Amazon Prime Instant Video is a relatively painless (for most consumers) add-on to their existing pay TV services, and both services offer enough content that they offer viewers a legitimate alternative to pay TV when coupled with occasional pay-per-title digital downloads and rentals.

As Sidebottom points out, consumers are slowly shifting from an ownership mindset to an access mentality; why pay $12 to own season one of Mad Men when you can watch it anytime you want, and on multiple devices, with Amazon Prime Instant Video? Even more to the point, why fool around with torrents and sketchy illegal streaming services when you can get most of what you want on the level and on the cheap?

Piracy is never going to go away, particularly among younger consumers for whom even an extra $8 a month might be too much and who are perhaps less worried about the privacy and security issues that go along with visiting sites and using services that traffic in pirated content. But as the research from Irdeto and Futuresource indicate, most consumers are more than willing to pay for the content they watch, and rightsholders are leading the way, rather than playing catch-up.

This column appears in the September 2014 issue of Streaming Media as "Winning the Piracy Battle."

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