Stealing Milk

A friend once shared with me the following short anecdote in relation to marriage, said he “Why should I buy the cow when I can steal the milk for free?”. This anecdote also seems to make a lot of sense when you place it in the context of the recent discussions around the Stop Online Piracy Act. This is a topic that I have spent a lot of time thinking about of the last few months.

This is not a new issue. As I reflect back, piracy or copyright infringement has been an issue that has faced the entertainment industry all my life. For me I remember dubbed movies on video cassettes (which were rubbish quality). Even music on cassette tapes, place a piece of cellotape over the holes and record all the music that you wanted from tape to tape. Push a few buttons and boom music to share with friends. Everyone could have the latest music, either from brought tape or off the radio.

Technology and the Internet now present more challenges to the entertainment industry. It’s no longer groups of friends who share music it’s the world via peer-to-peer and torrent type file sharing sites and technologies. It’s a massive challenge to the entertainment industry because millions of dollars of profits are being lost every time a song or movie is distributed through these networks.

Case in point is the Kim Dotcom and Megaupload case being put to the test here in New Zealand. Should the mainly US based entertainment companies be able to shape, exercise, and enforce the law on their terms as it seems that the new SOPA laws will give them power to do? See the link at the bottom of the page to hear the best explaination that I have heard thus far about the SOPA law, it’s given by Joe Rogan UFC presenter and former Fear Factor guy.

One view that has been expressed is that the entertainment industry has been happy to take money from paying customers for years without really innovating much in this space. Sometimes innovation is forced onto an industry. The Internet has already disrupted almost every other industry why not this one? If an incumbent is too lazy or slow to innovate where does the burden of responsibility lie? In almost every other industry the fact is that you must innovate or risk the possibility of dying slow death.

Is this an opportunity.

Absolutely. In my mind it is an opportunity to change your business model, change distribution, change pricing. Change something. Do it strategically, don’t be brash. For example offer digital downloads of a movie two weeks after it’s theatrical release in that country. Sell the digital copy for $7-$15 and allow the digital file to be viewed 3 times within the following week before it expires from the downloaders’ device(s). Dropping the price point and adding some rules around usage (that are enforced by technology) would be appealing to most downloaders who would rather watch a high quality version of the movie. I believe that this would increase profits (i.e. more people paying for downloads) and allow for innovation.

This really falls inline with other articles on this blog, I firmly believe that products and services need to align with user needs and expectations’. Businesses, organisations and industries need to factor in the experiences and expectations of their customers when developing and designing products and services. Perceived value engenders loyalty. If you show your customers that you care about them, they will show you love, and rave about you.

So getting back on track, don’t make people (your potential customers) want to steal your milk, innovate so they won’t want to.

Word. (At around 16m 30s into the interview)


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