To Boost Its New Crappy DRM, Hollywood Tries Giving Away Free Movies

from the free-sometimes-isn't-worth-the-cost dept

We're always told that the reason there's so much piracy out there is because "people just want stuff for free." This isn't actually supported by the facts, because we see people pay when they can get things for free all the time. And, similarly, we know that those who often get the most free stuff, also buy more. In other words, price may be one component of why people buy -- and free may be an appealing price -- but it is hardly the only component in how people make their decisions on obtaining content. One of the key issues, for many, is the freedom and or convenience in how they can make use of said content -- an area where DRM solutions take away value from the end-user (which, by definition, lowers the price that the average person is willing to pay).

Given all that, there's something rather amusing about Hollywood's new pitch for its Ultraviolet platform. As you may recall, this is the kinder, gentler DRM for video content that the industry has been pushing. It does let you watch content on multiple devices (within limits), but it's still DRM. And, as such, it's no surprise that the reception to UltraViolet has been somewhat lukewarm.

In order to deal with that, the movie studios are trying something different: giving away free movies. Yes, there's something somewhat bizarre about Hollywood using "free" movies as the incentive to get people to buy into their Ultraviolet DRM, which is meant to get them away from the "free" movies they were getting through unauthorized means. While it may attract a few people, it seems likely that the industry is going to (once again) discover the point that many of us have been making for ages. It's not just about free. If free comes with massive strings -- such as annoying DRM -- it's just not going to attract that many people. If they were strategic thinkers, perhaps they'd finally realize that it's not just about free, but about the overall package, and then maybe they'd stop making the overall package so annoying all in an effort to stop some people from accessing the same content... for free.

Filed Under: convenience, drm, free, price, ultraviolet

Yet Another Study Shows You Can Compete With Piracy

from the more-convenience,-availiability,-and-better-pricing dept

We've been saying it for years, and plenty of past studies have supported the assertion as well, but yet another report -- this time based on a survey in Denmark -- shows that those who regularly download unauthorized works online would actually prefer to use legal services, but are frustrated by the lack of convenience, choice and availability. The survey results did not directly have them complain about price, but when asked what would reduce infringement, price was a major variable. In other words: offer a reasonable service that is convenient, useful, not limited and which is reasonably priced, and you'll convince a lot of people that it's more worthwhile than infringement. We've certainly seen this in some areas already, but truly convenient and reasonably priced services are still hard to find for the most part. It would be great to see more competition and more innovation in that space -- and reports like this suggest it would actually be good for everyone -- including the copyright holders. Oh, and for the record, this report (also like tons before) show that those who infringe also tend to buy plenty of content as well.

Filed Under: authorized services, compete, convenience, payment, piracy

Digital Distribution: Exchanging Control For Convenience

from the all-your-digital-purchases-are-belong-to-us dept

Digital distribution can be a good thing, eliminating shipping, packaging, printing, storage, etc. and allowing instantaneous order fulfillment. Unfortunately, it has its downside, especially when digital products are tied to "walled gardens." The possibility always exists that the product you purchased, for all intents and purposes, never really belongs to you. We've seen it previously with Amazon's decision to suddenly remove purchased e-books from customers' e-readers.

Stuart Campbell at Wings over Sealand has another example of this unfortunate byproduct of digital distribution: the fact that you don't own what you've purchased. This means that at any time, for nearly any reason, the product you paid for can be rendered completely worthless.

In the case of iTunes, customers are not entitled to refunds on purchases, with the product in question being treated much in the same fashion as opened software, DVDs, etc. in brick-and-mortar stores. Once you've opened (installed) the product, it's yours forever, no matter how terrible it is.

"According to the iTunes Store Terms of Sale, all purchases made on the iTunes Store are ineligible for refund. This policy matches Apple's refund policies and provides protection for copyrighted materials."

In Campbell's case, the product in question isn't actually a bad piece of software, unlike the many clones and scamware inhabiting app markets. By his own account, he purchased and enjoyed the game (Touch Racing Nitro). After he purchased it, the developer (Bravo) went through a series of price adjustments, trying to find a sweet spot, ranging from £1.19 - £4.99. When this failed to make the impact on sales, Bravo offered a few free trial periods before marking it all the way down to 69p, which moved it back into the top 10 for a short time.

It's at this point that things get ugly.

Last October the game went free again, and stayed that way for four months. Then the sting came along. About a week ago (at time of writing), the game received an "update", which came with just four words of description - "Now Touch Racing Free!" As the game was already free, users could have been forgiven for thinking this wasn't much of a change. But in fact, the app thousands of them had paid up to £5 for had effectively just been stolen.

Two of the game's three racing modes were now locked away behind IAP paywalls, and the entire game was disfigured with ruinous in-game advertising, which required yet another payment to remove.

Campbell's paid-for software suddenly became indistinguishable from the free version, despite his having anted up for the game months ago. He fired off an email to Bravo, asking the developers to explain their reasoning for removing previously paid for content and asking these same paying customers to pay up again in order to return the game to its previous state.

He received a reply a day later from Ana Hidalgo, Bravo's "Social Media Manager":

"Hi!

Thanks for contacting us.

I'm really sorry about that. I knew that this could happen. The team had no option but to do that.

We're not trying to make money from people who have already bought the game like you did. It is not an excuse, but only 4% of the 2MM downloads have been paid ones. Unfortunately, Apple doesn't provide with any methods to know when an user has paid or not for an app. We just want to monetize the game from that 96% who are enjoying the game for free. Our goal is to monetize them via advertisement. We understand that this is annoying for the players that have paid for it.

Yes, maybe we could have released a LITE version, but if we release a new free version, we couldn't monetize near 2 MM free downloads we already have. And why we have 96% free downloads? A very bad old decision.. We've begun a new phase at Bravo Games and we definitely need some revenues from those downloads.

At the moment all our efforts are focused in new projects. When we finish those projects, we'll evaluate the possibility of adding new content to previous games like Touch Racing Nitro.

I regret to hear that you never buy another of our apps."

For all the supposed "entitlement" game fans have attributed to them constantly, nothing quite matches the entitlement "radiating from Sra. Hildalgo." For starters, if a developer feels that making an app free was a "mistake," it only compounds its errors when it starts taking it out on paying customers, especially when those customers number in the thousands.

If 96% of those were free downloads, that means that a whopping 80,000 people who paid money for Touch Racing have just been screwed. If we assume an arbitrary but reasonable average price of £1.19 (the second-lowest App Store price tier at the time most of the sales were made, though the app has cost at least twice that much for most of its life), that's just short of £100,000 that Bravo have extracted from consumers for what is in effect a "Lite" demo version of the game.

Imagine if the rest of the world worked this way. Imagine you went to Tesco and bought three boxes of Corn Flakes on a "three-for-two" offer, only for a Tesco employee to turn up at your house one day a month later and confiscate not only the "free" box but also the second one that you'd actually paid for. There'd be riots, or at the very least a long court backlog of assault cases and battered workers. Yet apparently, for videogames it's the dynamic economic model of the future.

Campbell is, unfortunately, right. Digital distribution puts control of purchased products completely in the hands of the developers and the distribution service. There are some game developers who would love nothing more than to go to 100% straight digital distribution, not only for the previously mentioned savings, but to allow them to retain complete control of their products. A fully digital distribution disguises DRM as a facet of the service (constant online connection, some or most content inaccessible offline) and helps eliminate the used game market which seems to rank very slightly below straight-up piracy in their minds.

Whatever pluses there are for the consumer are greatly negated by these factors. Any dispute between the distributor and the developers puts purchased products in the firing line. Should a developer suddenly pull out of the walled garden, customers may find themselves without support or updates for their purchased products, or worse yet, find themselves without functioning products.

Campbell has adjusted his tactics accordingly:

WoSland is a pretty wily consumer, and currently has eight apps sitting in its iPhone's "update" queue which are never going to get those updates, because the "update" in question is in fact a downgrade, removing functionality and/or adding ads. We've deleted many others altogether for the same reason.

Of course, this is far from convenient. Once you run into this situation, you're left with the choice of allowing all updates (even those that downgrade your software) or tediously updating all of your apps one at a time after verifying that said update won't remove functionality. Hardly ideal.

As he points out, console owners aren't so lucky. Most updates are forced, giving you the "choice" of updating or not playing your purchased game. And it's not just games and apps. As referenced above, e-books readers have been victims of distributor meddling in the past. Users of "services" like Ultraviolet and the "drive your DVD to the retailer to rip it to the cloud" may find their copies bricked if these services are shut down or (more likely) get caught in the middle of a contractual dispute.

If it's all about "control" with gatekeepers and walled gardens, digital distribution is playing right into their hands, turning what should be an advantageous situation for everyone involved into little more than a mixed curse.

 

Filed Under: apps, control, convenience, payment, scams, updates

An Open Letter To Content Creators: One 'Pirate' Explains Why He Infringes & How To Get His Money

from the the-power-has-shifted dept

We launched our Step 2 discussion platform last fall, just before the whole SOPA/PIPA fight heated up. It was just the first part of a much bigger planned program to better engage the wider community around here, with more parts rolling out as we move forward. The timing was interesting, and while we had intended to feature more content from Step2 on Techdirt early on, the SOPA/PIPA debate took precedence. However, even without us constantly tending to Step2 -- or even mentioning it -- over at Techdirt, a group of you took to it and have built up some interesting discussions. I wanted to highlight a few of the discussions there you might have missed over the past few months, starting off with one of the most popular ones on the site: An Open Letter To Content Creators from user Bobbi Smith, explaining "why he pirates." It's a long open letter, but if you want to understand the mindset, it's an important read for content creators.

I'm sure some will -- quite incorrectly -- try to summarize the point as one of entitlement, but if you read the details, it's actually quite the opposite. It's the story of someone who's sick of the sense of entitlement from big entertainment providers -- those who want you to pay top prices for mediocre content -- and then expect you to come back for more. If there's one key theme running through the discussion it's that control has shifted. The big gatekeepers used to have full control of the market, but now there's been a massive market shift: to the consumers. Smith isn't arguing that he "just wants everything for free" or that he feels entitled to things for free. Actually, he makes it clear that he willingly pays for things all the time -- when the content makes him "happy," when the offering doesn't try to limit him and when the price is reasonable.

If you read the full thing, you'll realize that the article is not a defense of piracy. It's an argument for how content creators can do better -- something that we've been seeing more and more content creators figure out. Content creators who understand this letter will recognize that it's not about piracy so much as about how to satisfy a market and make money doing so.

Filed Under: convenience, piracy

Why People Pay More For Access To Infringing Content

from the the-way-they-want-it dept

It's kind of funny to see the entertainment industry make totally contradictory statements about cyberlockers and usenet access providers in talking about infringement. On the one hand, they complain about how it's "impossible to compete with free" because "pirates just want everything for free." But, at the same time, they whine about how cyberlockers and usenet services often charge people for access, thus making them commercial enterprises who (according to the industry) "profit from piracy." But those two things seem somewhat contradictory. If people who engage in unauthorized file sharing only want stuff for free, then why do they pay these providers to get access? And if it's impossible to compete with free, then why does it look like these services have successfully done so? Correspondingly, why doesn't the industry open up its own competitors?

All of this comes to mind as Glyn Moody points us to an "open letter" that Mark Goodge wrote to UK Culture Minister Ed Vaizey, in response to Vaizey's statement that the blocking of access to Newzbin2 wasn't a big deal, because users should simply go to services that offer "legal access to movie downloads at reasonable prices."

However, as Goodge points out, he knows people who pay more for access to Usenet than it would cost to pay for a competing legitimate offering. And the reason is because their infringing activity has nothing to do with just "wanting everything for free," but wanting more convenience, more selection and fewer restrictions:

The reason people will pay for Usenet+Newzbin is that they want to be able to obtain movies in a format that suits them, not a format which suits the provider. They want to be able to download them and watch them whenever they want, not have to be online in order to stream them (assuming, of course, they’ve got enough bandwidth to stream movies anyway). They want a download service that gives them the same ownership and flexibility as buying DVDs. And they want to be able to obtain the movies they want to see without artificial geographic restrictions.

So, apart from the fact that it simply isn’t true that services such as Lovefilm are a suitable solution, it’s pretty clear that there’s a whole untapped market here for legitimate online purchase of movies via download. People are willing to pay, and willing to pay a fair amount -- provided that what they get in return is what they want.

At the moment, the only people making any money out of this market are those involved in infringement. As long as the movie industry maintains its outdated business practices and carries on treating its (potential) customers as the enemy, that’s how it will stay. Blocking Newzbin may result in a short-term drop in the number of people getting movies via Usenet, but it won’t lead to an increase in people getting them via legitimate means until there are suitable alternatives which provide the same level of convenience and functionality.

Contrary to popular belief, most people who “pirate” movies are not doing it for financial reasons. They’re doing it simply because nobody is offering them a product that they want to buy.

In other words, they're happy to pay... if only the industry would offer it to them in the manner that customers want. This isn't a surprise. For years, studies have pointed out that those who infringe really tend to be unserved consumers, who aren't getting the offerings in the form that they most want it. Smart companies realize that this is a form of (free) market research, and look for ways to better satisfy their customer base.

Tragically, the entertainment industry instead looks to politicians and the courts to block consumers from doing what they want, and then pretend it's for consumers' own good.

Filed Under: access, content, convenience, infringement
Companies: newzbin

Actor Explains Why He Downloads Unauthorized Content... Including Movies He's In

from the it's-just-more-convenient dept

Captain Kibble was the first of a whole lot of you to send in actor/comedian/writer/etc. Peter Serafinowicz's explanation for why he downloads unauthorized copies of things... including his own movies. The basic answer is convenience, but also a shifting view on media consumption. He does pay for some stuff, but only when it's equally convenient or, as many have called it, "better than free." It's worth reading the whole thing, but there are a few key snippets. He notes that there is definitely promotion value in having the content up on file sharing networks -- and notes that with his own show, obscurity is a much bigger threat than "piracy":

The visibility argument certainly makes sense for my short-lived BBC show. I'm revamping my website right now and my web team asked me if I would like them to hunt down and put and end to the torrents and RapidShare links to The Peter Serafinowicz Show, which was recently released in the UK on DVD. I said no because the show is still relatively unknown and I'd like as many people to see it as possible. In fact, I've used the torrents myself when I haven't had a copy to hand.

Much of it is already up on YouTube. If people like it enough they'll want to buy, to own, the DVD, which has lots of great extra stuff, but the DVD isn't even sold in the USA. The freely available content serves as a calling card for me, and for the other cast members and writers, hopefully enabling us to produce more hilarious stuff for the world's discerning comedy fans.

Another point he makes is that it's often the content providers own fault in making it so ridiculous difficult to legally get the content he wants to watch. He lives in the UK and is frustrated about TV shows getting to the UK much later, or other content that he can't legally reach at all from the UK. And sometimes, it makes no sense at all to him, so he just fires up BitTorrent instead:

I recently wanted to show my son Disney's classic Jungle Book and intended to get it on iTunes. Unfortunately, it is currently incarcerated within The Disney Vault. So I'm afraid I simply DL'ed a pixel-clear pirate copy which arrived in seconds. My moral justification for this? I once bought the VHS. It's your own vault, Disney!

He also sees how annoying the legally purchased versions of things can be:

"Ownership" is starting to change its meaning. If you buy a movie from iTunes you "own" the right to watch it on certain devices within certain constraints. When you "own" a DVD, you have the right to watch it whenever and wherever you want. However: you must watch ten minutes of promos, trailers and anti-piracy threats. I'll take the download, please.

Along those lines, he gets frustrated at ridiculous and unnecessary restrictions when he does by content -- restrictions that unauthorized copies don't have:

I own a physical copy of Anthony Lane's brilliant collection of New Yorker reviews, Nobody's Perfect. It's a heavy read (around 3 lbs.) and I wanted to get a copy for my iPad. I tracked down an ePub version of the book at the Barnes & Noble site, assuming, since iBooks also uses the format, that I could tranfer it to my iPad. Only the iPad doesn't read Adobe-encoded ebooks, not now at least. With the help of some sympathetic Twitter followers I then spent around ten futile hours installing Xcode and obscure Python scripts (not the funny ones) on two different computers in what seems to be the only method one can use to illegally decrypt Adobe ebooks. My moral justification for this? I've paid for the book twice.

Finally, he also has run into the ridiculousness of the recording industry. Earlier this year, we noted how insanely short-sighted it was of EMI to prevent embedding of the band Ok Go's viral music videos. Serafinowicz came across the same issue on a video he made for EMI, which he solved by releasing it in an unauthorized manner:

I recently directed the music video for Hot Chip's "I Feel Better." Contractually, the video had to be hosted on EMI's official YouTube channel, which disabled non-UK users from viewing it, limiting its audience by around 80%. Frustrated, I put it up on my own YouTube channel with no region restrictions, and at time of writing is just shy of a million views. EMI then remotely disabled embedding on my version, thereby limiting its audience again. If you're in the business of promoting a band, why would you want to stop people watching their promotional video?

It's basically the same story over and over and over again. People understand what's possible and what they can do with technology, and the industry keeps wanting to restrict what they can do, because the industry doesn't know how to deal with it. But that's never going to stop people. Once you understand what technology enables, why would you ever purposely limit yourself? The various content industries have so many chances to get this right, and every time they get it wrong -- to the point that even the folks who make their living from these industries are beginning to question the strategic aptitude of those in charge.

Filed Under: business models, content, convenience, file sharing, peter serafinowicz

NBC Universal Admits Defeat; Returns To iTunes

from the about-time dept

NBC Universal keeps realizing after the fact that making it more difficult to find your shows is never a winning strategy. So, almost exactly one year after refusing to re-sign Apple's iTunes contract, claiming that it wanted to charge higher prices, it appears that NBC has realized that it needs Apple and iTunes more than Apple needs NBC. Among the various announcements coming from Steve Jobs at the Apple press event this morning, the most interesting may be NBC Universal's capitulation and return to iTunes. For years, people have been explaining to NBC that the more places and ways it makes its content available, the better, but NBC has struggled with that concept, preferring to control every aspect of its shows. At least it's starting to step back from that position.

Filed Under: convenience, itunes, videos
Companies: apple, nbc universal

Convenience Matters: People Will Still 'Pirate' Content That Is Available For Free In Less Convenient Packages

from the stating-the-obvious dept

About a year ago, some commentators were positively shocked that tons of folks still got the latest Radiohead album via BitTorrent rather than the band's own pay-what-you-want site, which allowed people to get the music for free. However, the real point (which many seemed to miss) is that the reason people will often access the content via unauthorized sources isn't just because it's free, but because it's more convenient and doesn't require leaping over annoying hurdles. Plus, for many, it's a single interface and a single source for all the content they want.

So, it should come as no surprise at all that plenty of folks are still downloading unauthorized versions of TV shows that are available in authorized streams for free. First off, downloading the content lets users watch the content when and where they want -- and allows them to archive it or watch it on other devices. Second, it's just a lot more convenient for many users to get the content that way.

Once again, it looks like the entertainment industry got hung up on that whole "free" bit, when that's hardly all there is to the equation. Just because they put something up for free doesn't mean they've effectively competed with the alternatives. When the alternatives offer more and better "features" and much greater convenience, the "free" part is only one of multiple selling points. Simply putting content up for free without matching those other features means that plenty of folks are still going to get the content elsewhere. Rather than fighting it, it's about time companies learned ways to use this to their own advantage.

Filed Under: authorized, convenience, free, piracy

Making Content Convenient Creates More Value Than Locking It Up

from the time-is-money dept

Megan McArdle sings the praises of Amazon's digital media strategy, noting that she can now get her music, movies, TV shows, and books all from one company and have them all neatly organized and made available to her. Amazon's digital store is convenient because it remembers which content she's purchased and allows her to re-download any of it on demand from anywhere (Update: Some readers are pointing that while you can re-download Unbox movies and Kindle e-Books, you can't re-download music from Amazon's music store. My apologies for the error.). That means that she doesn't have to worry too much about preserving individual media files; she just needs to remember her Amazon ID and Amazon takes care of the rest. One thing she doesn't note, though, is that while the MP3s are DRM-free, the Kindle books and Unbox videos are still crippled with DRM. That means that if she ever decides she dissatisfied with Amazon's service, there may not be an easy (or legal) way to take her content with her. And precisely because she's putting all of her digital eggs in one basket, it will be particularly painful if she ever needs to switch services. As nice as some of Amazon's services are, I'm not personally willing to subject myself to that degree of lock-in.

Megan's observation also illustrates what's wrong with the common argument that DRM is required for subscription services. It is often claimed that without DRM people would just subscribe to a service for one month, download all the content they wanted, and then cancel. But this ignores the fact that people's time is valuable. Most people don't want to waste a lot of time organizing, transferring and backing up their content. I think Megan is pretty typical in wanting a single place in the cloud to store all of their media. If the price of a subscription service is reasonable, most people will find it more convenient to just stay subscribed and download content as they need it. Of course, you'll have a few people who play the download-and-cancel game, but a lot of those people would probably have downloaded their files from BitTorrent anyway, so it's no great loss. And at the same time, ditching DRM creates a lot of new value because it eliminates compatibility headaches and gives customers the peace of mind of knowing they can switch if they ever need to.

Filed Under: content, convenience, drm