Angry Birds CEO Explains How The Company Embraces Piracy
from the not-so-bad-for-the-business dept
I was in the audience to see Eliot van Buskirk interview Rovio's CEO, Mikael Hed, on Monday morning at Midem, but with so much going on at the conference (and then traveling), I'm finally getting a chance to write it up. Hed made a point of telling music industry execs that not only was the music industry's approach to piracy entirely wrong, he believed Rovio's approach was much smarter: embracing the piracy. I'd heard that Hed made it a special point to make sure that the interview included a discussion on piracy -- and brought it up two separate times during the interview -- saying that the company was basically doing exactly the opposite of the music industry:"We could learn a lot from the music industry, and the rather terrible ways the music industry has tried to combat piracy."He explained how the important thing for the future of Angry Birds was to keep building "fans" and that piracy can actually help with that. He noted that they were "embracing" pirates where they could, recognizing that it could help the company get more fans. Later, he noted that if there's too much piracy, it's the company's own fault for not providing access to the game in a convenient enough manner. His comments went even further than the comments from his colleague Peter Vesterbacka a few months ago about how the company used counterfeiting as market research to figure out where to invest.
Either way, it seems clear that Rovio has taken to heart many of the points that we've discussed here about proactive ways to deal with piracy: by recognizing that it's an opportunity, not a threat.
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Filed Under: angry birds, business models, embracing, mikael hed, piracy
Companies: rovio
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Google can make you a millionaire dump labels and studios and ask Google how to do it.
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Community
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Too bad the labels won't dare listen to him.
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Rovio created the game. They are more than just the gatekeepers. The people most upset about piracy in Rovio's case are probably the folks at Apple.
Likewise, if the labels actually created to content, they likely wouldn't be as upset about piracy. They are just the channel, not the content.
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Basically, it's a firehose, and no matter what they do, they will look good. But this is the old blind mouse thing, as no matter what they do, they will get the cheese.
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Was not disappointed.
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In other words, "Sure this works for a bunch of angry birds, but it will never work for washed-up rock stars*."
*Instead of "rock stars" you can insert "over budget movies" or whatever gatekeeper-warded group you wish to use.
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Now we just wait for Stevens' Corollary:
"Any time Masnick's Law is invoked, there will be someone who doesn't understand it chiming in about how Masnick didn't invent the identified business model, and so it shouldn't be called Masnick's Law."
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What they got is a firehose of public acceptance and demand, and no matter where these guys stand, they will get hit with it. What they are doing now is entirely reactionary, attempting to stay riding the wave for as long as possible.
Pet Rock, anyone? It's about the same thing, really. When the public gets bored, their t-shirts and stuffed toys will be bargain bin, and life will go on.
Do you honestly think they could do it again if they wanted to? I doubt it.
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You are right they are riding the wave, which is the smart thing to do. Recording and movie studios are fighting the tide, which is often the point of this website. Go with the flow, embrace the tech, and listen to consumer demand NOT pretend its still 1989 and if you yell real loud with your fingers in your ear any tech that has come out since then will go away.
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"You are right they are riding the wave, which is the smart thing to do. Recording and movie studios are fighting the tide, which is often the point of this website."
There are so many difference here, that it is hard to know where to start. They aren't "riding the wave", that suggests planning and preparation. Rather, they were swept up by a wave, and by chance, they look great at the top of it. It wasn't a plan... they are just riding it out until it collapses. It is a short term deal, where they make as much as they can because they likely will never hit it again.
An industry (music, movies, software, whatever) cannot just ride itself into the ground to appear "good" for a moment. Riding the wave is a short term mentality. Mastering the waves and coming up with a way to bob to the top of the waves without being swept away in them is key for longer term plays, and that sometimes involves fighting against the current to stay in place. It means that you only move with tech or demand to the extent that it improves your current position in the long run, not the short run.
That is why many delivery formats for music have come and gone, and the "industry" rarely fell for them, no matter how good they seemed.
Many consider the entertainment industry to be slow. It's not slow, it's just careful and doesn't get caught up in the "technology of the week". They haven't selected many dead ends in the last 50 years (the last big one would be the large laser discs, which some in the movie world loved... everyone else smartly waited for the second and third iterations that brought us the CD and DVD).
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This is more insightful than you think, and probably not in the way you intended.
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yeah, this whole internet fad will run its course soon, no need to get onboard.
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Piracy in those cases are not a problem and in fact act as an enabler unlocking new markets, aside from functioning as a lighthouse to direct their efforts where demand is strong, you compete with free and win.
They can do this and don't need to interfere destructively with other lower level of the market that they can't cater to, they enable the other markets that they don't intent to be in to be attended by others and that keeps their products in the minds of a lot of people and that translates to bigger sales.
Now when you try to exclude everybody from the market and control it absolutely what you get is falling sales I thought that was abundantly clear in the case of labels, that tried to ascertain absolute control over the market failed and were severely punished by the public for it.
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And as for the mouse analogy, it falls apart because, in the case of the MAFIAA, the mice have found a door to the cheese, instead of going over their bridge, and losing some cheese in the process.
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It's funnier with music though. Small musician does it? Well, it only worked because they're nobodies. Big musician does it? Well, it only worked because they were already big.
The fact is that there is nothing special about Rovio that made this approach work, outside of them having an excellent and appealing product. That it's a gravy train isn't the cause of their success (although their approach to pirates may have helped it become a gravy train).
I know this because I've done the very same thing and none of my products were at the blockbuster level of Angry Birds. However, all of my products, even the ones that weren't the most popular, have been profitable, and that they were pirated actually helped that be true.
Note to naysayers: I'm not saying piracy is good and should be encouraged. As a businessman, I'm neutral on that point. I'm saying that piracy is a permanent feature of the marketplace and there are ways to handle it that can hurt you and ways that can help you, and it's better to choose the latter.
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There are tens of thousands of other app style games out there, and most of the makers of them would love to make enough money to recoup the cost of the coffee they consumed writing them.
AB isn't a "success model", it's just a happy accident.
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There were tons of people playing music, so The Beatles were just lucky.
Or maybe it's a quality project and people are rewarding them?
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By jove, I think he's finally getting it!
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INB4
Sorry... feeling plucky today. I like the fact that there's yet another example (because, you know, it won't work for everyone) of how you can turn piracy into a boon. And make a great success at it as well.
My example: Shared my copy w/ my two girls... Cost Rovio what? $20? $30? Now they both snatch up Angry Birds Merch wherever they can. Already paid Rovio over $100 last year alone.
Win!
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What can the RIAA/MPAA learn from that example?
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True. But in a real capitalist system no one is guaranteed that their innovation will guarantee a permanent profit stream. Too many people in the IP industry have an entitlement mentality that says "I used to make a lot of money, but I am not now. It must be someone else's fault." If you don't innovate you loose. Unless, of course, you own Congress.
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If not, hopefully they'll realise that any lost sales have nothing to do with "piracy", but their own failure to deliver an equally compelling product.
We shall see...
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/amidoingitright?
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I was on the receiving end of a C&D for daring to post handmade Angry Birds homage jewelry on Etsy. The description was clear that we weren't mass-producing, each item was handmade. We were still forced to take them down.
"Embracing piracy," my ass.
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This article makes clear they go after people that try to profit from their IP, not people who download it personally and don't then resell it.
Its clear in my mind your experience matches exactly with what they are saying as highlighted in this post.
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Did they follow up or did you take the jewelry down and they left it at that?
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As far as I know, this is true, and I wish Mike would set the record straight - as the amount of misinformation about it (such as your post) is staggering.
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We talk about this all the time. Look up any story involving Monster Cable. Or the Kellogg's toucan story. Or any story about a companysucks.com website. Most cases Techdirt covers involves a company overreaching far beyond what trademark law covers into situations where there is absolutely no consumer confusion. Monster Cable is not going to lose its trademark to abandonment if they fail to sue Monster Mini-Golf because there is no consumer confusion that the companies are related.
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What does that have to do with piracy? You infringed on their trademarks, and attempted to profit from them by producing knock-off physical goods. That's a totally different thing to piracy.
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2) Reddit would like to have a word with you.
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If you try to pirate the game, here are some things to consider:
1) You probably don't need to pirate it. You can probably play it for free using a Rovio approved channel. Rovio still makes money from the free version by selling advertising in the game.
2) From the user perspective, not all types of free are equal. In this case "free from Rovio" means that you have to put up with ads (so maybe not entirely free). On the other hand with a pirated copy I have to search out the game and then run a major risk of spyware. So the pirated version is not entirely free, either. It is possible to compete with free, because in the final analysis the authorized version of free is probably a better deal for both the user and the company than the pirated version of free.
3) If I do successfully pirate a safe copy of the game I have not really cost Rovio a penny because I most likely would not have paid for it if that was the only option. However, I might buy some AB merchandise or introduce the game to someone who will pay for it or use the ad-supported version. I might even get hooked enough that I go looking for "AB Seasons" or some other version of the game and end up playing a paid or sponsored version of the game. In addition, if enough people play a certain game it starts to get the attention of investors and other potential business partners. So even if you do go pirate the game you may make them more successful.
So you were correct.
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But I think both the music AND film industries could learn heaps more from you.
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