Unmet customer needs fuel piracy

I have recently read and had debates on whether the piracy is stoppable or not. For most people, piracy represents the "ultimate competitor", the unbeatable force in the media and digital content industry, and it's true that in many countries (think Eastern Europe, Russia, and most of Asia), it is simply not viable to set up local distribution, with such a rampant, on-the-street digital forgery.

My view is that there will always be, no matter what technological, legal barriers to piracy nor commercial incentives to buy, a percentage of people who will prefer to pirate and illegally consume digital content, which then, through the magic of group dynamics and mimicking, convince a larger, less die-hard share of people to join in those activities.. The crux is: how does one control and, when possible, reduce such percentage to a negligible one?

If we take the music distribution industry, they are now suffering from the series of mistakes they made in the 90s and early 00s - that is to consider the CD medium as the sacred and unique way of distributing music. That and their late concern for fairer prices (both towards the end-customers and the artists) have indeed contributed to the overall decrease of music sales.

However, just look at what Apple has been doing for a year with its iTunes Music Store: by shifting the paradigm of how to distribute music, they have created a new wave in which tens of competitors (Sony, Real, Walmart, Microsoft...) are now trying to get their marketshare. Such a new delivery channel is far closer to actual customers' habits and demands. Of course you will not stop all the downloads on the P2P networks, but for most people, having a perfectly encoded and labeled song in one click for 0.99$ overcomes the long searching, waiting and disappointments occurring in the illegal download channels.

The same can now be seen with videogames, as some companies (like French start-up Boonty) now offers instant paid download and online renting of games. Just as will be doing Valve with their Half Life 2 game (well, when it is eventually released!).

The only (but substantial) downside is that each content provider is fighting for its own Digital Right Management (DRM) techniques and thus create a customer lock-in that is not always desirable: as of today, I can't play a song bought on Sony Connect on my iPod. And Real's attempt has actually backfired to them, creating more flame and criticisim than actual praise over their Harmony technology, which enables crossovers between digital players and different protection techniques (like Apple's).

As a natural optimistic, I see that as a natural pre-chasm crossing phenomenon (to borrow Geoff Moore's terminology), and we'll hopefully see some consolidation and unification in the coming years (or months), as more and more consumers and content providers jump on the (digital) bandwagon.

PS: could Apple make the next generation of iPods in color, like the mini? I mean, 40GB in your palm is cool, but 40GB in blue (or pink, if it's your inclination) is cooler :-)

Comments

[night passage]

I think DRM should not be used at all, if a buy a CD I can rip it and play it on my PC, on a portable device and in my car (I have to burn a CD-ROM of Mp3s for that). I expect to do the same when I download (and pay) a song.