A Simple, Sane and Legitimate Way To Monetize Piracy

By now it is all over the place that Pirate Bay has lost its lawsuit with the authorities regarding their enablement of internet piracy. But this will neither ensure that piracy will end, nor that artists won’t find another way to monetize their efforts beyond the meager rewards the entertainment industry offers.

I have no quibble with the fact that piracy is bad. What I do have a problem with is the fact that, on the one hand, organizations like RIAA are happy to sue the pants off file sharers—citing ever declining numbers in their business—while, on the other hand, they refuse to see that not everyone who is using P2P has price point zero as the only acceptable price range.

At present, Pirate Bay’s trackers are supporting over 22,387,439 seeders and leechers over IPv4. (There is a much smaller number on their IPv6 network.) That is a huge number of people who are acquiring content. To be precise, 22 million of them in one go. And we are not even counting the users on the other networks.

If the entertainment industry only sees this as an opportunity to sue 22 million people and get a dollar off each of them, they deserve to die the painful death they are undergoing. If they can see the 22 million as a live and kicking market, they deserve to live and live well.

For those who argue that piracy is free are sadly mistaken. Every download is paid for at some point in the chain. If you do it at the office, it is your company that foots the bill. If you do it at home, you pay for it with your DSL/cable bill. There is no ‘free’ in the equation here. There is already value attached to a download even when you are leeching off a torrent. The only problem is neither the content creators nor the distributors get paid. So who does?

The telecommunications giants that provide your bandwidth and connection are the ones who profit. As sneaky as that is, it is not their fault either that people use torrents and P2P to get their media. The fact remains that there is no simple, sane and legitimate way to consume content at a reasonable price at the moment. The entertainment industry has always refused to embrace innovation on that front.

Instead of de-incentivizing piracy by making non-pirated content freely available, they try to keep prices as high as possible to maximize their margins and hold on to the days of glory days of CD and cassette tape sales. They should open their eyes to the fact that this new reality will work in their favor if they play for scale. The average person probably does not download more than 30 songs a month on the internet. Why is it impossible to address their needs at a flat rate which would make it easier for everyone to understand and legitimately participate in the process.

You don’t need to monetize all 22 million users connected to Pirate Bay to make this work. Just a quarter of them would be 6.5 million users in a month. Those users shelling out $5 per month for 30 tracks, without direct rights management is worth about $32.5 million in monthly revenue, or $390 million in annually. I am playing easy with the numbers here, but my point is this: there is a massive business opportunity here which is being ignored.

Piracy is really not news. It has been around before the internet was created and it will continue as we plunge headlong into the digital era. What the entertainment industry must recognize is that they need to change their business model. Everyday they spend chasing people in court with victories that result in a minor blip on the global piracy radar is another day they are losing in saving their livelihoods.