Why Hollywood Is So Dumb About Piracy (Part 2)

advice, Hollywood

Hollywood © by Cynthia_x

A few people seemed confused by my last post on why Hollywood is wrong about piracy, so I wanted to clarify a bit.

I’m not suggesting anyone get rid of distribution. I am suggesting that piracy is not the threat Hollywood is making it out to be.

It’s best practices in many industries to give away a certain number of copies of your books or songs or images for free – because the more eyeballs that see it (or ears that hear it) – the more money it makes in the long run. This might appear counterintuitive to the kind of corporate executive who manages intellectual properties like commodities – who believes that media should be sold and managed like the goods on the shelves at Walmart. Reduce shrinkage. Prosecute shoplifters. Spend a fortune on traditional advertising, but show no one the actual product til they buy.

However, selling TV and movies is very different from selling a 24-pack of toilet paper. People are going to talk only so much about consumer goods like toilet paper – in person or online – no matter how good your marketing is. But people want to talk about culture. That’s one of the main things we talk about – we identify with what we like, we reference culture to signal we’re part of the gang who likes Bon Iver and Game of Thrones and Annie Hall, we use stories we saw in movies, TV or books to help us make sense of the chaotic mess that surrounds us in our own lives – we enjoy telling each other about what we’ve seen. It’s part of the fun of being human.

And Hollywood wants us talking about their shit. Because out of ten people – if two of them are talking about a movie they saw, the chances are far greater that the other eight may go buy a ticket. Or pay somewhere else down the revenue stream.

But to get more people talking about it, you have to seed the storm cloud a bit. They’re starting to catch on – like when they put Portlandia’s season premiere online before it aired and ratings in key demos jumped 81%. But that kind of thinking needs to extend across the entire industry, not just TV, which is used to giving its shit away for free.

Piracy achieves the same effect, though less formally. If Hollywood were to formalize the practice – legitimize piracy, make downloading titles fast and easy and inexpensive, none of this would be a problem. And yeah, certain distribution arms might have to change to accommodate this, but distribution always has to change to accommodate new technology. Outdated industry models will wither and die in the face of new technology and new consumer preferences. This is what market pricing is all about – letting consumer demand set prices. And if that’s readjusting prices downward, resetting what could be seen as a speculative bubble so that inflated movie budgets have to go away and huge marketing campaigns are replaced by good word-of-mouth buzz, then so be it. The industry will be healthier for it.

4 thoughts on “Why Hollywood Is So Dumb About Piracy (Part 2)

  1. You’re basically advocating a return to emphasis on broad word of mouth which, as a marketing strategy, was rightfully abandoned.  The reason it works (and is a good idea) in the case of screeners is that those industry people have clout with respect to average consumers because they help determine what movies get press.  But broadly applied, it’s an unreliable strategy.  It’s tough to connect these cultural considerations you cite with the bottom line, and I’m not clear how you’re doing that here.  It’s “good” to have average consumers talking about your movie; obviously no one would dispute that.  More people will pay to see it.  But it’s better to take the hit of a decreased audience who pays than an increased one who doesn’t.  (To that extent, I dispute the conclusion you draw from those two scenarios you compared in the previous installment.)

    I’m not saying piracy doesn’t sometimes help sell movies.  Or even that it detracts from ones that do sell (if the numbers about Avatar, etc. are to be trusted).  I might download a blockbuster I saw in theatres, or purchase a DVD after having pirated it and liked it.  But I still don’t see why you think it makes good business sense to pursue consumers who behave in these ways rather than trying to shore up as much of the paying market as you can.

    1. Dear Hector,
      I respect that it sounds like you know what you’re talking about, but like others, I think you’re mistaking what I meant to be a broad point for a prescriptive point.
      I’m not saying that piracy should replace studio marketing. That idea is laughable of course. I’m just saying it’s not the scary evil the studios are making it out to be, and in fact, is probably mostly good, if not great for their bottom line.

      I don’t think the two choices will ever be between “decreased audience who pays” and “increased audience who doesn’t.” I think the differences will happen in degrees, but there will always be a majority of the market who pays. Look at when Radiohead released that album for free online — they still made money off that same album. From people willing to pay for something they knew they could get for free.

      I don’t think “shoring up the market” ever makes sense when you’re talking about ideas, intellectual property, culture. I think if that’s your commodity, you want it to spread as far and wide as possible and the money follows. There are countless bloggers who have provided examples of this in the market which I frankly don’t have time to run down.

      Thanks for stopping by —

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