Piracy is just a business model

…said the Disney Co-Chair Anne Sweeney at the Mipcom festival.
I find this quite a refreshing statement compared to the standard RIAA/MIAA stance. They keep insisting on theft, crime, punishment and so on which only seems to create more piracy and distance the customers.
Maybe a better approach would be to compete with piracy in quality, availability and price.
Let’s have a look at what that might look like.
Pirated content is often using the latest video and audio compression. This results in a 90 minute movie in DVD quality being below 800MB, often with 5.1 channels audio and optional subtitles.
With TV shows, the pirated content can often be in high definition if the source was HDTV as well.
It will be hard for a legitimate service to compete in terms of quality. The target should be to at least match the quality of pirated content.
The biggest issue for legitimate content providers will be how to apply copy protection without reducing the quality of the content.
The current digital rights management (DRM) solutions are very restrictive and result in the user renting content instead of purchasing and owning (see an anlysis of Amazon Unboxed).
I for one would accept an invisible/discreet and user specific watermarking but I can not accept DRM solutions where I cannot use the content on any device I choose or where the content can become unusable after a certain amount of time or if the original provider, God forbid, goes out of business.
TV shows are available as pirated content a few hours after their first official broadcast. DVDs are available as pirated content just a day after their official release.
This is especially valuable to potential customers from regions where the broadcast or DVD release is delayed by up to a year due to region restrictions.
Legitimate content could become superior to a pirated version by being available at the same time as the broadcast/DVD release or even better, a symbolical amount earlier.
Having one single reliable and secure location (shop) to get legitimate content is a great advantage instead of searching various more or less obscure areas of the Internet.
Here pirated content clearly has an advantage by being for free which is a difficult price level to compete with.
A few online services have however shown that users are willing to pay for content if the other criteria above are met.
Paying the same amount (or more) as for the physical version of the content just doesn’t make sense to the end user.
Especially since the digital version is often crippled by various digital rights managements solutions decreasing the perceived quality and thus value.
The controversial MP3 online store AllOfMp3 has a very low price point ($0.20/song, $2/album) and while their prices may be unrealistic for other service it should be noted that user are willing to pay!
Summarising the options above one must admit that at the moment it looks a bit bleak for legitimate digital content.