Angry Birds CEO At Peace With Chinese Counterfeit Merchandise

from the don't-get-mad-get-glad dept

Wed, Nov 2nd 2011 9:50am — Zachary Knight

Recently, Rovio CEO, Peter Vesterbacka attended the Disrupt conference in Beijing. At that conference he walked on stage clutching a bunch of counterfeit Angry Birds balloons. However, he was not angry. He was actually happy. Why is this? Because it showed him that his game is hugely popular in China.

Vesterbacka said that the increase in counterfeit merchandise has influenced Rovio's retail strategy:

There are a lot of Angry Birds products out there, but most of them aren't officially licensed. Angry Birds is now the most copied brand in China, and we get a lot of inspiration from local producers.

Right now, we've proven that there's demand, and we're going for 100 million downloads this year for Angry Birds, and again the same demand for the physical products.

The way we look at it is, of course we want to sell the officially licensed, good quality products, but at the same time we have to be happy about the fact that the brand is so loved that it is the most copied brand in China.

It's great for us to see the demand, and that's why we're building our own stores here. And actually we're building our first stores here, and not in Helsinki... We hope to have quite a few over the next 12 months.

This line of thinking really flies in the face of most content producers. While other companies are ranting, raving and trying to legislate counterfeiting out of existence, Rovio is working to compete against counterfeiters on their home turf. It recognizes that those who buy counterfeits do so because of an unavailability of the real thing. By bringing authentic merchandise to China, Rovio is hoping to increase its revenue and capture a market that is based around its properties. Not only that, but he even admits that Rovio is learning from those counterfeits, and getting "inspiration." It's a form of free market research, so that Rovio can understand ahead of time what consumers want... for free.

There's no reason why this will not work. The Chinese people want Angry Birds merchandise. Rovio is providing said merchandise. That is pure supply and demand at work. It's crazy that many other companies do not get that pure and simple lesson. Perhaps it's time for the CEOs and boards of directors of other companies to take a note from the Rovio playbook and put it into action. They might find a world that doesn't need poorly written legislation like PROTECT-IP/E-PARASITE or secret treaties like ACTA, but rather companies who listen to fans and provide them the goods and services they desire.

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Filed Under: angry birds, china, counterfeits, peter vesterbacka
Companies: rovio

52 Comments

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fogbugzd (profile), 2 Nov 2011 @ 10:05am

>>While other companies are ranting, raving and trying to legislate counterfeiting out of existence, Rovio is working to compete against counterfeiters on their home turf.

The fact is that all the ranting, raving, and draconian legislation isn't going to do a thing to put a dent in counterfeiting. And most important, even if it did have an effect on counterfeiting it would not help sales of authorized merchandise.

This isn't to say that counterfeiting is OK or should be permitted. It is saying that ranting, raving, and spending a great deal of political capital doesn't do a thing to help companies build profits. Counterfeiting does give failed executives an excuse for why their company is not making the expected profit, but the truth is that if a company is profitable then counterfeiting doesn't matter, and if it is unprofitable then stopping counterfeiting probably won't help.
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Anonymous Coward, 2 Nov 2011 @ 10:09am

Ahh, okay. So we should stop a US law because of consumer actions in China.

Got it, comrade.
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Jon Renaut (profile), 2 Nov 2011 @ 10:11am

Interesting IP question
Do the counterfeiters have any control over their own innovations that have build on Angry Birds? Clearly they're doing stuff that Rovio hasn't thought of, or Rovio wouldn't be looking to them for inspiration.

Could a counterfeiter then sue Rovio for copying the copies? Obviously the counterfeiters would have to admit to the original copying, but it might make for a really interesting legal ruling.
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Chronno S. Trigger (profile), 2 Nov 2011 @ 10:11am

It's easy...
It's easy to compete with piracy when you have a product that everyone likes. What about those poor souls who can't create something everyone wants, what are they suppose to do? How do you compete with free if no one is willing to pay initially. There ought to be a law.

/Sarc
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Chronno S. Trigger (profile), 2 Nov 2011 @ 10:14am

Re:
No, we should stop a US law because of company actions in the US.

Go it, comrade?
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Jari Winberg (profile), 2 Nov 2011 @ 10:28am

CMO, not CEO
Peter Vesterbacka is the Chief Marketing Officer of Rovio.
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E. Zachary Knight (profile), 2 Nov 2011 @ 10:32am

Re: CMO, not CEO
Interesting. Gameindustry.biz names him as the CEO and his Linkedin profile lists him as the Mighty Eagle. Will have to look more into it.
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E. Zachary Knight (profile), 2 Nov 2011 @ 10:35am

Re:
No.

We should stop a US law because it is completely useless to stop piracy and counterfeiting by design.

We should stop a US law because it will cause far more economic harm to the US and world economies than will be saved for content industries.

We should stop a US law because it is not the least restrictive means of achieving the goals of the content industry.

We should stop a US law because the content industries need to adapt.
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btr1701 (profile), 2 Nov 2011 @ 10:41am

Re: Interesting IP question
> Could a counterfeiter then sue Rovio
> for copying the copies? Obviously the
> counterfeiters would have to admit to
> the original copying, but it might make
> for a really interesting legal ruling.

There's a principle of law called "unclean hands" which is an equitable defense in which the defendant argues that the plaintiff is not entitled to obtain a remedy on account of the fact that the plaintiff is acting unethically or has acted in bad faith with respect to the subject of the complaint� that is, with "unclean hands". The defendant has the burden of proof to show the plaintiff is not acting in good faith. The legal principle on which the doctrine is based is that "those seeking equity must do equity" or "equity must come with clean hands".
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The Incoherent One (profile), 2 Nov 2011 @ 10:44am

Re: Re:
Freetarded, Pirate FUDmonger!
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The Incoherent One (profile), 2 Nov 2011 @ 10:44am

Re: Re:
Freetarded, Pirate FUDmonger!
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Anonymous Coward, 2 Nov 2011 @ 10:47am

Angry Birds
I actually had no interest in Angry Birds, until now, that is. I feel the need to reward Rovio for their foresight.
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bshock, 2 Nov 2011 @ 10:55am

let's go over this again
It's a fairly well observed phenomenon in human psychology that a person will tend to reject significant gain for himself if he feels that someone else will profit more in the process. In other words, Mr. A will tend to reject a situation where he makes $100 if he knows that Mr. B. will make $1000 from the same situation, in favor of a situation where he (Mr. A) makes only $50 if Mr. B's take is reduced to $10.

It's stupid and irrational, but by and large, that's how your species rolls. Capitalism isn't a zero sum game, but a large subset of humans play it as if it were.
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out_of_the_blue, 2 Nov 2011 @ 10:55am

Special case, already a big hit, and GREED hasn't grabbed this guy yet.
But GREED will grab him eventually, or at least the lawyers, ALWAYS does.

We aren't arguing over existing BIG HITS, Mike. You claim that your notions suit all cases. Here you're attempting to put over the general assertion that this one big hit shows can ignore infringement. But in fact AB rose in the /existing/ milieu, proving that the milieu is just fine, only need a hot product and some ordinary luck.

So, yes, this guy should just be ECSTATIC that he's riding a mere game to incredible actual wealth. I'm sure he doesn't care beans about "losing" some theoretical few yuan. That'll wear off when he gets used to being rich. Even Bill Gates was a techno-geek until he passed a threshhold and got used to having BIG money. -- And no, I'm NOT jealous or envious, I'm just stating FACTS that I regard as central to keeping "capitalism" civilized. Money changes everything, power changes personality. Saint Steve Jobs was an authoritarian behind his public person, yelling at employees when crossed. ALWAYS HAPPENS. It's like letting dogs get whatever they want, will soon rule the house.
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Anonymous Coward, 2 Nov 2011 @ 10:58am

Re: Re:
"We should stop a US law because it is completely useless to stop piracy and counterfeiting by design"

Unproven. Citation needed.

"We should stop a US law because it will cause far more economic harm to the US and world economies than will be saved for content industries. "

Unproven. Citation needed.

"We should stop a US law because it is not the least restrictive means of achieving the goals of the content industry."

Unproven. Citation neeeed.

"We should stop a US law because the content industries need to adapt."

Yup, adapt to everyone screwing you over.

Sorry Zack, but this is where you learn the difference between your OPINION and fact. You are incredibly thin on facts here, and strong on opinion. Repeating them doesn't make them facts, even if that is Mike has taught you to do.
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Anonymous Coward, 2 Nov 2011 @ 11:01am

Re: Re: Re:
Where are your facts?
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Chronno S. Trigger (profile), 2 Nov 2011 @ 11:03am

Re: Special case, already a big hit, and GREED hasn't grabbed this guy yet.
Translation: "It only works for the big guys."

Wait for it, the next article he'll be saying it only works for the little guys.
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Anonymous Coward, 2 Nov 2011 @ 11:05am

Re: Re: Re:
The government should just make licensing digital content easier for the public. Problems solved.
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Jay (profile), 2 Nov 2011 @ 11:08am

Re: Special case, already a big hit, and GREED hasn't grabbed this guy yet.
Hey genius, this article was not written by mike
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Anonymous Coward, 2 Nov 2011 @ 11:12am

Re: Special case, already a big hit, and GREED hasn't grabbed this guy yet.
You don't pay attention to who writes the articles, do you?
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Anonymous Coward, 2 Nov 2011 @ 11:15am

How does Rovio compete when the counterfeiters can do it for less? I'm not trying to poke holes here maliciously, just looking for a bit more insight into your thought process/how you think they should respond to market forces. Yes there is a demand, but they're not the only source of the supply and it's never just that easy.
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Anonymous Coward, 2 Nov 2011 @ 11:15am

Re: Re: Re: Re:
I am not claiming anything. Zack is. It's his "facts" you need to consider.
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Anonymous Coward, 2 Nov 2011 @ 11:38am

I am making a prediction for 12 months from now after Rovio enters the Chinese merchandise market...

Angry Birds CEO At War With Chinese Counterfeit Merchandise
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Jon Renaut (profile), 2 Nov 2011 @ 11:38am

Re: Re: Interesting IP question
Ahh, thanks for ruining my hypothetical with your fancy lawyer "facts".

Could the counterfeiters use it as leverage towards maybe a merchandising deal? If I understand you correctly, they still could counter-sue and COULD win, though it would be tough. There would be legal costs involved for Rovio, at least.
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E. Zachary Knight (profile), 2 Nov 2011 @ 11:42am

Re: Re: Re:
Why don't you prove that SOPA is needed. Nobody has done so. They only quote grossly inflated "losses" to piracy without any real context or verifiable methodology.
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E. Zachary Knight (profile), 2 Nov 2011 @ 11:43am

Re:
He would only be at war if he were suing his fans and attempting to get websites declared illegal and blocked. By entering the market and selling his own merchandise, he is competing. For that he is praised.
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E. Zachary Knight (profile), 2 Nov 2011 @ 11:46am

Re:
Because he has the real deal. If the price is competitive enough, people will opt for the real thing over the knock off.

But if he tries pricing it far above what the market can bear or is willing to pay, then he will fail.

For example, let's say the knock off stuffed bird sells for $5. He could theoretically sell his authentic stuffed bird for $10 and still get a large portion of the sales. However, if he tries selling it at $20, he will get far less.

I am sure he has done far more research into what prices the market will bear.
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Anonymous Coward, 2 Nov 2011 @ 11:50am

Re: Re: Re: Re: Re:
You claimed that his statements are "unproven", if you are now going to say that that is only your opinion, then that is fine, but accusations from an anonymous coward gives me no motivation to question Zacks statements.

In the game of proving the impact of piracy, only one side has provided peer reviewed and accepted studies on the topic. The other one has been shown to deceitfully inflate losses, and ignore the benefits of the current market.
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Perry K (profile), 2 Nov 2011 @ 12:00pm

not just in china
Here in Toronto's chinatown there's all kinds of Angry Birds merchandise. At first glance, none of it looks officially licensed.
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vastrightwing, 2 Nov 2011 @ 12:11pm

LOL reminds me of when
I used to work for a small manufacturing company that made printers and supplies for the electronics industry. One day I'm walking through a plant (MOTOROAL) in Singapore. I noticed they were using printing pads that were not ours. I asked why this was. The answer was, your company takes 4 weeks to ship and are very expensive. We found a local mfg. that makes copies of your pads for 1/2 and they can deliver them immediately. I understood and that was the end of that topic because I knew my company would never be able deliver supplies faster than 4 weeks due to the way they were, so MOTOROLA found a local solution. In this case, our own business was already taxed to its limit and the local mfg. picked up on the demand. That is the way it is. I didn�t want to bring this up to my company because I knew it would simply cause a relationship problem.
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Anonymous Coward, 2 Nov 2011 @ 12:30pm

Innovation
It seems to me that Rovio could use innovation to put the pirates at a huge disadvantage. Rovio could open stores in China on the same day they introduce a new character to their line up as customers flock (sorry) to their stores to buy the new bird. It will take the pirates some time to produce their knock-offs, and in the mean time Rovio will get the sales for items the pirates were selling. Unless the pirates resort to industrial espionage Rovio will always be in the driver's seat.

It seems to me that Rovio's CEO understands this, and that even if his company only gets 50% of sales now going to pirates its still money they didn't have before. I am not saying piracy is right, just that Rovio is going about it very wisely.
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Mike Masnick (profile), 2 Nov 2011 @ 12:50pm

Re:
How does Rovio compete when the counterfeiters can do it for less?

Never underestimate the value of being authentic and real. On top of that, Rovio can do certain bundles and tie-ins that no counterfeiter could ever do.
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Vincent Clement (profile), 2 Nov 2011 @ 2:02pm

Re:
Plenty of places to get 'free' music, yet, people pay money to buy music on iTunes. What is Apple doing right to get them to pay?
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hothmonster, 2 Nov 2011 @ 2:04pm

Re: Re: Re: Interesting IP question
I think the counterfeiters best bet would be to reach out to Rovio and see if they can get a deal producing/selling the official merchandise. Otherwise they simply switch to a new brand or try to undercut the official merch.
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Anonymous Coward, 2 Nov 2011 @ 2:05pm

Re: Re: CMO, not CEO
Someday I hope I can have Mighty Eagle as a job title
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TECHDIRT (profile), 2 Nov 2011 @ 2:32pm

anti american
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Anonymous Coward, 2 Nov 2011 @ 2:43pm

Re:
You see that is the beauty of it, they not being the only supplier of something.

It means they need to keep improving, it means they need to keep sharp.
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Anonymous Coward, 2 Nov 2011 @ 2:44pm

Re: Re: Re: Re:
The way to do that is to end copyright.
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Anonymous Coward, 2 Nov 2011 @ 2:45pm

Re: Re: Re: Re: Re:
Well the fact is there is no harm proven.
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ltlw0lf (profile), 2 Nov 2011 @ 3:30pm

Re: Angry Birds
I actually had no interest in Angry Birds, until now, that is. I feel the need to reward Rovio for their foresight.

If you have a job, and you value that job, then for the love of FSM, do not download and play angry birds. I swear, eight hours just simply vanished into thin air when I opened that game...Otherwise, it is the best time waster since Microsoft added Freecell to Windows (and minesweeper before that.)
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akp (profile), 2 Nov 2011 @ 4:19pm

Not all sunshine
I sell a very small number of handmade lampwork bead pendants made to look like the various Angry Birds.

I've sold a few, and none through my Etsy shop (where I do have them posted).

Etsy has removed my listings as a result of an email from someone at Rovio.

We reference the official game and company, and the beads are not mass-produced. So I guess it's ok if people mass-produce unlicensed Angry Birds merchandise, but if I try to make small-scale art from them and sell it, well..

I think I'll email him this article...
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Butcherer79 (profile), 3 Nov 2011 @ 2:39am

Re: let's go over this again
"It's stupid and irrational, but by and large, that's how your species rolls."
So what species do you belong to?
Take me to your leader, we come in peace, shoot to kill and other close encounter/star trek parody quotes.
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Butcherer79 (profile), 3 Nov 2011 @ 2:45am

Re: Eh?
While your post is undoubtably concise I feel it lacks in certain other area's, like:
Sentances
Reason
Hyphenation
Sence
Capitalisation

To list just a few...
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The eejit (profile), 3 Nov 2011 @ 5:42am

Re: Re: Re:
So satirical, it had to be said twice.
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The eejit (profile), 3 Nov 2011 @ 5:45am

Re:
BY powering the brand behind it. IT is a well-known phenomenon that people actually work up to the legitimate merchandise, but they need to start by buying fakes, when it comes to branded merch.
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The eejit (profile), 3 Nov 2011 @ 5:57am

Re: Re: Eh?
At least it's pithy, I guess.
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Leonardo (profile), 3 Nov 2011 @ 6:26am

Peter willl be most happay when China hackers copy his code and sell "Happy Birds" to gloabl consumers underming his brand strategy and paying Peter zippo.

Peter will be most happy then!
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nasch (profile), 3 Nov 2011 @ 8:31am

Re: Re: Special case, already a big hit, and GREED hasn't grabbed this guy yet.
I knew someone would bring out Masnick's Law on this one. I just didn't know it would be blue; I guess I gave him too much credit.
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Butcherer79 (profile), 3 Nov 2011 @ 8:44am

Re: Re: Re:
The word "should" as opposed to "must" would be the first indicator that this is an opinion based comment, and on an opinion based discussion board too, who would have thought it?!
His opinion is fact, in the sense that it's a fact that it is his opinion.
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IronM@sk, 4 Nov 2011 @ 9:10pm

Response to: Anonymous Coward on Nov 2nd, 2011 @ 10:09am
Slow clap.
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Anonymous Coward, 30 Jan 2012 @ 10:34am

u all suck
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mohammad keflee, 30 Mar 2012 @ 9:35am

Hat's up to Mr Vesterbacka
Peter Vesterbacka storms the world of sale and marketing with his new line of strategic thinking - adapting to the harsh reality of making money in the face changing business natures and cultures and the emergence of new economic superpower like China. Yeah, protectionism, exclusivity are words that make much sense in textbooks not a mere rhetoric in the real business world we are living now. This guy got balls!
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