Piracy as a market measure

We all know that the music industry has dramatically struggled with music piracy on peer-to-peer networks over the last few years and blame their revenue decline on all that illegal activity.  We now see that 25 million Americans download priated movies as well.

Here is the thing about piracy people just don’t seem to realize. Or maybe they are unwilling to discuss, or feel like they will get sued – I am not sure – but I don’t hear them talk about it.  What seems to be clearly missing from the equation is that when 25 million users download movies illegally, and 9 million users are on p2p networks at any given moment, downloading 32 billion music files a year, that is a huge huge huge market. 

But the record and movie industries say it tells you people want music and movies for free and they are all bad bad pirates. However, I would suggest that what it really says is that people are desperate for on-line delivery of content that is fast, flexible and nonrestrictive. What it really says is: unfilled market need. It doesn’t get much clearer than that. Even in the light of highly visible law suits, people continue to use p2p (+bittorrent) networks to get content. Demand, Demand, Demand.

So here is the solution: leave out the restrictions, add in value to the consumer and monetize that value. Once you do that, even if you only convert 10% of the “Demand” then you have a winner. 

Posted on February 2, 2007 in Market

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