Rewarding the Pirates

February 04, 2008
A thought by James Berardinelli

The following applies specifically to the MPAA and the computer game industry, but it wouldn't take much imagination to extend it to the RIAA as well...

If we're going to face reality, which is something the MPAA religiously fails to do, it's necessary to acknowledge that piracy is here to stay. Someone likened going after piracy sites (like The Pirate Bay) to playing a game of "whack-a-mole" - when you knock one down, two will pop up in different places. Yet the MPAA doggedly continues to pursue the impossible-to-succeed "stamp out piracy" approach rather than trying something different, like changing their revenue model to reduce the appeal of obtaining pirated material. Why? Because such an approach flies in the face of the MPAA's current greed-above-all mantra.

I've presented this statistic before but it's worth repeating. The average cost (manufacturing, royalties, etc.) of one DVD is about $2. It's higher for some titles and lower for others, but all are in that range. So if it costs $2, why does a heavily discounted disc sell for around $17? The retailer purchases it from the distributor at about 50% of list price. So if a DVD lists at $25, is getting it for $12.50. If they sell it at 30% off, the consumer is paying $17.50 and Amazon is getting $5. The studio, however, is picking up about $10 in pure profit. Per disc. This isn't capitalism; it's highway robbery.

One obvious approach to making a dent in piracy (not wiping it out - that simply won't happen) is to stop looking at DVDs as opportunities to fleece movie-lovers. There's no reason a DVD can't be sold for $10. With that price, the studio and would both collect about $4 each. Or, when it comes to downloads with the middle man eliminated, $6 is reasonable. But we don't live in a world where "reasonable" is in the vocabulary of those who have been blinded by green. "Greed is good," said Gordon Gecko, and he was right - until that greed results in short-sighted decisions that lead down the road to potential ruination.

But price isn't even the most insidious thing at work here. If I buy a DVD, that's all I have - a DVD. It's in nice case so I can display it on a shelf alongside my other DVDs. But I get one copy and one copy only. What happens if I lose the disc in a move or if I take it with me on an airplane and it is damaged as a result of today's "security measures" (which apparently involve 400-pound guerillas jumping up and down on suitcases)? Tough luck. The disc is copy protected so I can't make a backup copy. If it's lost or damaged and I still want it in my library, I have to fork out another $17.

If, however, I download the same movie illegally via BitTorrent, I have a clean copy on my hard drive. I can copy it to a DVD and watch it on my TV or my laptop. I can make copies whenever I want. There are no restrictions. If my DVD is somehow destroyed, no problem - just burn another one. There are a lot of benefits to this kind of freedom, even if I'm not considering giving a copy to anyone else.

So here's the situation. If I steal the movie, complete freedom is conferred upon me. But if I do the right thing and buy it, I'm stuck with a single copy that I have to guard carefully lest it become lost or stolen and I'd have to re-purchase it at the same price. Is there something wrong with this picture? Am I missing something? How is it that the legitimate customer is being penalized but the pirate is being rewarded? The MPAA would smugly answer, "That's why we have to stamp out piracy" without thinking that the real solution might be to remove the copy protection and allow DVD buyers to make copies of their movies.

The argument against this used to be that copy protection was necessary to discourage piracy. That's actually funny when you think about it. All pirates have sophisticated equipment that makes a mockery of even the most complex anti-copy software. So what's the point? The only ones being penalized by copy protection are those who don't invest in illegal anti-copy software. Once again, the law abiding citizens are the ones being punished. And the pirates keep laughing.

It's a similar situation with computer gaming. I'm one of those straight arrows who pays the going rate for a game I like because I want to support the men and women who invested their time and effort into creating something I enjoy. But the distributors have thrown in an annoying wrinkle. Although I have spent $40 on the game and have loaded it onto my hard drive, I still have to put a damn disc in the DVD drive every time I want to play it. So what happens when I move and I can't locate the original disc? (It's in that one box way up in the attic that didn't get unpacked.) I now can't play a game I legitimately purchased. This has become so ubiquitous in the industry that when I find a user-friendly game like GALACTIC CIVILIZATION that allows me to play without inserting a disc that I want to jump for joy.

However, if I go on-line and pirate a game, I don't have to worry about these restrictions. I can play the game without having to hunt for the disc and stick it in my DVD drive (which isn't working consistently to begin with - it's a six-year old drive on a six-year old computer). There are times when I get so mad at some of these companies that I can understand why some people would steal from them. But not with the makers of GALACTIC CIVILIZATION. For their simple act of friendliness, they can have my money whenever they come out with something new.

This is the way it is. The MPAA, the computer gaming industry, and the RIAA are so out of touch with reality that they don't realize how badly they're screwing the consumers they're trying to keep from running to The Pirate Bay. Yes, a new revenue approach will make a big difference, but here's another suggestion: consumer friendliness. The idea is to make the customer like not only the product but the producer (rather than like the product and hate the producer). Do that, and the desire to pirate will decline. It's only one step but it's an important one. But, cynic that I am, I doubt it will happen any time soon.

I eagerly await the next GALACTIC CIVILIZATION expansion pack.