Recently I've seen a lot of debate about the role of piracy on the internet. I had decided not to write a post about it until I saw a post by my friend on his blog, http://www.connor-g.com/2012/01/25/piracy-its-not-the-problem/. While the majority of his post is accurate, I feel like it is missing a major piece of the puzzle.
Piracy is a big problem.
There is no other way around it. When you have people free riding on a system, it impacts the system and can lead to a Prisoner's Dilemna. If users see others getting things for free, they have little incentive to pay for it themselves which ultimately leads to no money for content creators.While anti-piracy laws do shift the incentives, they are hard to enforce and thus are not really effective. The issue is that piracy probably cannot be solved by legal forces nor can it be solved by a blatant hatred of the Old Media companies. While I disagree with Chris Dodd's sentiment on the SOPA protest as an abuse of power, I do agree with his analysis that Silicon Valley and Hollywood need to meet to talk about piracy.
New content models, specifically the idea of leasing content as opposed to owning it, will probably be what saves Old Media and bring profits to both Silicon Valley and Hollywood. Netflix and Spotify are the two most notable example of this model. By subscribing to their streaming services, you essentially lease content until you discontinue your subscription. By leasing the content, individuals can't distribute it as easily and you have services that are legal and easy to use. The issue with these services is that as they become successful, the Old Media companies want either more money which makes the service unprofitable or stop releasing their library and try to create their own service. As we have learned with premium cable channels, premium content needs to be bundled in order for users to pay for it. The average user is unlikely to pay for each "channel" individually. If they were willing, it would still be helpful to have a master account through Netflix and Spotify to manage all of the payments.
Ultimately, the issue of piracy and content is a difficult and confusing issue that will take many years to resolve. I think that putting blame on either Silicon Valley or Hollywood is unproductive and won't lead to the necessary cooperation between both industries that will ultimately make people want to pay for content.