Rewards, not lawsuits: A lesson in successfully combating online piracy

A lesson in successfully combating online piracy

Mention the Motion Picture Association of America (MPAA) or the Recording Industry Association of America (RIAA) on the Internet, and you’ll likely be met with a lot of angry people. That’s because the MPAA and RIAA are not known for their roles in creating great movies or music — an idea that feels blasphemous even to write — but for punishment of their members’ customers. The people and companies behind these groups are the same entities who sue music and movie fans into oblivion, and push for legislation like SOPA and PIPA. They are, in other words, the enemy.

This does not necessarily have to be the case. Yes, piracy is a problem, even if it does not cost the billions of dollars a year the entertainment industry claims. But there are other ways to go about combating it. The MPAA, RIAA, and software companies like Microsoft seemed to have realized this in the past two years or so. The outrageous lawsuits against individuals appear to have dwindled, but not entirely stopped. Instead, copyright-reliant industries are going after bigger fish, like Grooveshark and Google. Of course, they also push for legislation like SOPA, and trade agreements like ACTA.

Still, there is a better way — and the entertainment industry would do well to take notice.

Earlier this week, Jeff Keacher, an engineer and creator of image blur fixing software Blurity, posted on his company blog about a successful technique he used to prevent someone from stealing his product. Rather than warn, punish, or sue, Keacher did the unexpected: He offered the person a great deal.

After noticing that the same two registration codes were being used over and over, Keacher realized that people were trying to pirate Blurity. So after some deliberation, he decided to create an “Easter egg” that appeared anytime someone used either of the two codes. The Easter egg came with a simply message: If you’re “intent on stealing the software anyway,” here’s a promo code that “will give you 66 percent off a purchase of an actual key.”

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“That’s right: Not only would I call them out on their attempted piracy, I’d reward it,” wrote Keacher. “I figured it would be better to get some money from them, if possible, rather than no money at all.”

To Keacher’s surprise, the first time someone found the Easter egg, the would-be pirate not only paid for the software, “they did so at full price!” he wrote.

Keacher’s story got me thinking: Could such a tactic work for intellectual property industries on a large scale? The answer, says Keacher, is yes.

“Companies already practice this technique, called ‘price discrimination,’ on a massive scale,” Keacher told me via email. “The education discount program offered by Adobe is one example in which prices are discounted up to 80 percent. Although Adobe might couch the education discount program in altruistic terms, I think that the reality is that they know students will simply pirate the software if it’s way beyond their budgets. Adobe probably figures that it’s better to get some revenue from the students rather than none at all.”

Keacher admits that there are complications with this tactic. For instance, “honest users might feel penalized for being honest,” says Keacher. Furthermore, he says, there’s the question of how to “separate the people who will pay more from the people who will pay less, and do so without creating a bunch of unhappy customers.”

“Radiohead did an experiment a few years ago where customers could name their own price for a downloadable album,” says Keacher. “It was, in effect, a form of price discrimination. They did well with their experiment, but other groups have had mixed results trying to replicate it in the years since.”

As I see it, a large part of the problem with Big Entertainment’s overall strategy for combating piracy is that its players forget the people hit by their swinging legal hammers are fans. All it would take for at least a substantial portion of would-be illegal file-sharers to jump back to the right side of the law is a little respect for the fact that they are simply trying to consume their industry’s products. Don’t threaten the people who want to enjoy music and movies — reward them! Have some humility, as hard as that may be, and realize that it is you who should be convincing us that what you offer is worth our money. Fail that, and people will simply download what you create for free; if you don’t care about us, we don’t care about you. Around and ’round we go.

Of course, it’s not as simple as that, as Keacher explained. But I believe it would be wise for the entertainment industry to consider ways to employ price discrimination on a larger scale, just as Adobe and others have done. This is not a new idea by any means, but it may be a good one.

That said, Keacher believes the best solution is simply to offer a product so good that people would never think of pirating it in the first place.

“I added the Easter egg mostly for my own amusement, but now that I’ve seen it work, I’m more inclined to try similar initiatives,” says Keacher. “Piracy is going to happen. It’s an inevitability. But to quote [CornerBlue CEO] Arthur Chaparyan, ‘It’s about focusing on the product and making it so good that people want to pay for it.’ That’s my real goal.”

Lead image via mirana/Shutterstock