David Bowie seems to understand the value of strategic leaks. Weeks before his latest album was slated to be released, his entire album was streamed online for free. Subsequently, pre-orders topped the iTunes pre-order charts in 34 countries as a result of this deliberate leak (photo credit: Mark Jeremy, flickr)
By Oon Yeoh
The Internet has made it easy for file-sharing of software, music, videos and e-books to happen. Despite various attempts by companies to stop the free-flow of copyrighted material, file-sharing is still rampant. But it need not necessarily be bad for the companies concerned.
You would think big software companies like Microsoft would view piracy with nothing but disdain. After all, over the years the company has probably lost revenues in the billions of dollars due to lost sales of its software. Yet, Microsoft founder Bill Gates is able to adopt a glass-half-full view of it.
“Although about three million computers get sold every year in China, people don’t pay for the software. Someday they will, though,” Gates told an audience at the University of Washington in 1998. “And as long as they’re going to steal it, we want them to steal ours. They’ll get sort of addicted, and then we’ll somehow figure out how to collect sometime in the next decade.”
Yes, piracy has caused lots of lost sales but it is precisely because of rampant piracy that Microsoft’s Windows and Office software is as dominant and ubiquitous as it is today. So, there is a silver lining for software.
But what about music? David Bowie seems to understand the value of strategic leaks. Weeks before his latest album was slated to be released in March this year, he allowed the entire album to be streamed online for free.
The thinking obviously was that people who got to hear the album would buy it. The strategy paid off handsomely. Pre-orders for his album, The Next Day, topped the iTunes pre-order charts in 34 countries as a result of this deliberate leak.
If you think Bowie’s positive experience was an anomaly, think again. Robert Hammond, a researcher at North Carolina State University, who had analysed more than 1,000 albums leaked onto BitTorrent (a popular file-sharing system) between May 2010 and January 2011, found that, in some cases, piracy actually helped album sales.
According to Hammond’s analysis, albums that were shared before being officially released tended to sell more copies than expected. This is especially true for well-established artists. “If you already know the artist, you’re just downloading to make sure it’s not a clunker – if you like it, you’ll still go out and buy it,” Hammond said. “My results suggest that streams will not cannibalise sales.”
Guess what, it’s true for videos too. If you’re a fan of the TV series Game of Thrones, there’s a good chance you saw a downloaded version. After all, it’s the most widely pirated TV show in the world, with an estimated four million illegal downloads per episode.
Yet, you don’t see its director David Petrarca fuming over this. At this year’s Perth Writer’s Festival, he told an audience that piracy doesn’t actually hurt the show and in fact, helps it because the show survives on social commentary generated by the cultural buzz surrounding it. And this happens because so many people are downloading the shows.
By now you probably won’t be surprised to hear that piracy can also have a positive impact on books? One of the biggest surprise best sellers in recent years was a satirical children’s book (aimed at adults) entitled Go the **** to Sleep, which became a bestseller even before it was published in June 2011.
Before the book’s publication, a pirated PDF version of the book began circulating in peer-to-peer networks. The exposure resulted in huge pre-order sales of the book, sending it all the way to the top of Amazon’s bestseller’s list.
The harsh reality is that piracy is going to happen whether we like it or not. Instead of fretting over it, companies should find innovative ways to benefit from it. Although giving free access to your content may seem like a dubious way to make money, Internet industry guru Tim O’Reilly put it best when he said that obscurity was by far a bigger threat to most content creators than is piracy.