Keep It Cheap, Stupid: Psychology of the Pirate

Pirate

Despite the proliferation of paid media models, online piracy of copyrighted materials will continue, according to a new report from PwC. In its survey of 202 people who admit to downloading pirated media, the company found that of course the chief motivator is price, supported by their perception that "everyone is doing it." Curiously, PwC found that the many ad-supported sources of free media might be contributing to the legitimization of piracy because they blur the line between legitimate and illegally obtained copyrighted material.

Video is the big attraction. Among content pirates, 83% say they streamed TV shows in the last month and 69% streamed movies for free. Almost half (48%) had accessed a movie within a month of its DVD release. Apparently many consumers find even digital pricing too high: 68% completely agreed that the reason they were downloading content illegally was because the hard copy was too expensive, but 58% felt the same about the digital pricing. If content producers want to lure consumers away from piracy via pricing they will have to go lower than some of them appear to be planning. PwC found that these pirates were willing to pay a maximum of $3 for a movie and $1 for a TV show. Only about a third of these consumers worry that piracy might increase media costs. The physical disc is not an overwhelming draw, either, with 56% of this group feeling they didn't need a hard copy.

Media cheats do not seem particularly remorseful. The survey finds 81% plan to continue accessing unauthorized material in the next six months. The mobile platforms will only make this worse, since 40% say they plan to use these remote devices to access content, too. The fear of being caught (68%) is a secondary concern to having their computers infected by viruses (80%). The moral issue -- that they simply are doing something wrong -- seems to concern only 59% of pirates.

Figuring out a strategy to lure the media pirates away from their swashbuckling ways is a poser. The lure of free is hard to beat, especially when 58% say they want to be able to access content free and prefer an ad-supported model. Eighty-seven percent said they were willing to watch ads in exchange for free TV content, and 84% felt the same about movies. Rather than playing with pricing and packaging of individual media titles, content providers may have better luck (nominally) with a Netflix approach. Thirty-four percent of pirates said they preferred subscription-based models, and only 9% seemed to like the transactional approach of on-demand systems.

Of course PwC's report was not a survey of all consumers, so the actual size of the pirating population was not considered. But the fact that many of those who access copyrighted content learned about the sources from friends or family indicates the viral nature not only of piracy but the validation mechanisms people use to rationalize it.    
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6 comments about "Keep It Cheap, Stupid: Psychology of the Pirate".
  1. Jim Lillicotch from Lillicotch.com , February 16, 2011 at 2:02 p.m.

    If you digitize something you effectively increase the supply to infinity. Law of supply and demand says...

    People know and understand this. They want to (and will) support the actual artists, but won't be held hostage by the media companies and their obsolete business models any more.

    Copyright is so fundamentally broken that dumping it altogether is looking better than reform to me. I also believe young people who grew up with filesharing and the like, will lead the way.

  2. Chris Hedick from chrishedick.com , February 16, 2011 at 2:18 p.m.

    Jim makes a good point. It will be very interesting to see if the NY Times paywall can figure out a way. In my musings as a fantasy record label strategist trying to help the company survive I would do the following: seed the file sharing sites with bogus files of my content that have advertisements every 15 seconds. 15 seconds of Lady Gaga (or whatever you downloaded) followed by 15 seconds of ads for a closely related product. Then, have my own portal for music distribution where the cost per song is fifty cents and I don't have to share revenue with Apple's ITunes. Slowly you can train people that file sharing is annoying because it wastes time downloading bogus files and why bother when you can get it from the label directly for half a buck? Plus, with those in song ad impressions you might even move the numbers via an additional channel.

  3. Paula Lynn from Who Else Unlimited , February 16, 2011 at 2:43 p.m.

    Mindless adding charges adds up when the bill comes in. Hurt once shame on you; hurt twice shame on me. Individual pay a dollar for this, pay a dollar for that will cancel each other out of business. If you want subscription, more has to be offered for less. Otherwise, ar matey.

  4. Doug Garnett from Atomic Direct , February 16, 2011 at 3:34 p.m.

    Interesting theory, Jim. But we've lost all ability for artists to get a big push. Getting an artist noticed requires a massive PR effort and wild/crazy image preparation (like Lady Gaga or Katie Perry).

    That means the intermediary companies must invest huge bucks if an artist is to be noticed.

    My sense is that despite good declared intentions for the "freedom for the artist", the artist has become the loser in this fight.

    Copyright violation primarily hurts the original creators even if it's an indirect hurt.

  5. William Hughes from Arnold Aerospace , February 16, 2011 at 4:14 p.m.

    Reading all these articles about Piracy on the internet, I have come to the conclusion there are TWO kinds of Pirates. Most articles about Piracy concern those who Download material that has just been released, or material that has been illicitly placed on a site BEFORE it's Official Release. This is the first type of Piracy.

    But there's another kind of Piracy, and it concerns those who pursue material that was released a long time ago, but is not available today. Many Movies and TV Shows are Pirated because there is no LEGITIMATE way of getting them because the Studios REFUSE to make them available. There are a number of reasons why, these include ownership issues. Take for example the 1966 TV Series BATMAN. All indications are if it were to be made available on DVD it would be a Best-Seller. But there's a Problem: One Studio (20th Century Fox) made this Series, but after it was cancelled another Studio (Warner Brothers) purchased the BATMAN Trademark, which they now use for their own Productions. They demand that if the TV Series were released they should get a share of the Royalties. Neither Studio can agree on that share, so this series remains unavailable.

    Other Movies and TV Shows are not available because of Political Issues. Disney refuses to release the 1946 Movie SONG OF THE SOUTH because the setting of this Movie (Pre-Civil War Southern USA) upsets certain Minority Groups. Disney fears these groups would stage reprisals, such as Boycotts, if this Movie were to be released, so Disney keeps it locked up.

    So what's a person to do? Some people want copies of these two examples, and many others like it. Since the Studios refuse to make them available, those who want them simply turn "Somewhere Else" to get them.

  6. Jim Lillicotch from Lillicotch.com , February 16, 2011 at 5:33 p.m.

    "the artist has become the loser in this fight"

    I completely disagree. This is a wonderful time to be an artist. Almost anyone can produce things for a fraction of traditional cost. Warehousing and distribution costs are gone. Promotion can be done socially on the cheap (with hard work).

    Anyone can do it and be successful. I'm not saying give things away and pray. There are so many ways to make money, but it's up to the artist to figure it out, not the public.

    Some will be found and popular and some won't, but it's no different than before. How many have left their current contracts owing money? For every Lady Gaga there are a thousand wannabees. There are plenty of those who just get ripped off by their "great" contracts.

    It's the gatekeepers who are in trouble, not the artists.