When is a pirate not a pirate? The murky world of downloads
August 4, 2014
Do you have a dirty little pirating secret but are afraid of making it public for fear the authorities will come down on you like a tonne of bricks? Or do you even see it as a problem and therefore don’t know what all the fuss is about? Or, perhaps, you see piracy as a serious issue because you are one of the many businesses and artists who are affected by it.
Whatever your take on the piracy issue it is fairly big business and is, in itself, causing a significant amount of disruption to conventional business models. In this article I want to take a look at why some of those conventional business models are just not keeping pace and why it is that access to the internet through hand held devices is probably one of the leading root causes of piracy other than our very human desire to get something for nothing.
Firstly, some figures: who hasn’t heard of Game of Thrones? Well it may interest you to know that season four of the cult series has now gone down in history for the most illegal downloads sitting at more than 1 million. In fact, Australia and the city of Melbourne are largely to blame with 11.6% of the figure attributed to the island continent. Within 24 hours of the show being broadcast on US television screens more than 300,000 people were actively file sharing it and it didn’t matter that Foxtel made the show available faster or more cheaply – people flocked to file sharing sites in droves. Just to pick on Australia a little more the IP Awareness Foundation noted that about 25% of 18-64 year olds download or stream content illegally online.
But think about this, the cost of going to a movie cinema is perhaps one reason why people are turning to piracy. Australian consumer group Choice conducted some analysis by reviewing ticket prices across four countries. They found that the average cost of an Adult ticket in Australia was $12.80 compared to $7.40 in the US, $8.85 in New Zealand and $8.98 in Britain (prices are in Australian converted dollars). Where the rubber really hits the road is when an average family of four were to go to a Multiplex Cinema and be left $67 poorer for the pleasure ($18 each for an adult and $15.50 for a concessions / children).
Compare that to a family in NZ who would pay only $33 and the same sized family in the US who would pay $38.40. But wait that’s not all! Whenever you go to the movies you want some “treats” right? Well – the same research showed that a bottle of water cost $5.70 at one of the larger cinema chains compared to $2.50 if you bought it at the supermarket which means if you take all of those treats and tickets into account for an average four person family you may not have much change left from $100.
As one commentator pointed out to me the reason for the mark-up is to try and increase profit margins across the whole cinema going experience – that and increases in labour costs. Mind you the price has not deterred Australians from going to the movies because as the Bureau of Statistics has shown more and more people are going. So even though the price of the movie going experience is high is it a reason for why people are still downloading pirated movies?
The next example if the good old corner DVD store. People are also arguing that piracy is impacting on those business models as well – but are they? Or is it just time for the corner DVD store to close because its time has come? The reality is that you can now walk into a major supermarket or retail chain and often buy a DVD or Blu-Ray for less than $10. In fact, if you are prepared to wait then you could get what you want for less than $10. So, why not own it instead of renting it instead of being a member with a card to yet another business? But then let’s so you don’t want to buy it – around shopping malls and supermarkets, railway stations and street corners you now have kiosks where you can rent a DVD sometimes for less than $1. In fact a strategy for one large cinema chain is to diversify its income by setting up both kiosk and online rentals.
Then of course there are providers such as NetFlix and many others who offer bundled deals and then there are the telecommunications companies who are getting in on the act by not only bundling services together but now offering dedicated internet and streaming content. In fact, we have such a package in our household and I can tell you that we have rented 6 movies so far for less than $5 per movie and then just have a search on YouTube (as part of the package) if we want to watch art house. For a home phone, unlimited internet and access to more than 50 other television channels (other than free to air) we pay $69.95 per month.
But, does that explain why piracy is taking off? In one part it probably does because once you have unlimited download packages then there really is no barrier to downloading whatever size you want or from where.
But the real game-changer in town probably isn’t the prohibitive cost of going to a movie or the cost of accessing the internet coming down it has a lot more to do with the accessibility and one reason that could explain why piracy is up is there are people who have a tool that allows them to watch anything they want so long as the device is charged up and ready to go. Yes you guessed it, the game-changer isn’t that very human trait of believing we have obtain something for free or the disruption occurring in traditional business models of cinema and movie companies it’s the fact that we now have smart-phones, laptops and iPads that allows us to pretty much watch what we want.
In fact here is a number that will really blow your mind! According to BI Intelligence by the end of 2013 it was estimated that 6% of the global population would own a tablet, 20% will own a PC and 22% will own a smartphone. How often have you been on a train, a bus or a plane and noticed that pretty much everyone around you has ear-phones in? As you can see in this graph there is a reason for that! The growth of mobile devices has been incredible.
Of course, to go along with the rise in smart devices we have come up with another idea – let’s give people access to greater amounts of storage. By way of example I have three storage devices no bigger than a remote control that sit on the book case in my office each with a terabyte of storage. It’s like I have the space so now I need to fill it right?
So here we are back at the beginning of the article – why is it that piracy is such a huge thing and is it plausible that by providing access to tools to enable people to do what they want is the problem as opposed to the conventional thinking that it’s all about the cost of content in today’s traditional business models?
Certainly the artists who sell music should be angry because many who is the subject of illegal downloads are not the massive global stars with access to endorsements! But, is that excuse enough to tap piracy on the head? Or should there be a change in conventional thinking about how the music industry operates? The big question being are we blaming the wrong things because it’s easier to blame pirates for pirates sake or are we yet to truly grapple with what is the biggest problem – how do you solve the problem of human beings wanted to get something for nothing.
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