Why we should thank, and hate, Pirates

Mar 22, 2010 by Dan Taylor    2 Comments    Posted under: Music, News, Technology

The Crime

Matthew Chow, a member of the infamous “Rabid Neurosis”, or RNS as they were better known, has been found ‘not guilty’ by a jury of his peers. Chow was on trial for the charge of ‘conspiracy to commit criminal copyright infringement’. In other words…Digital Piracy Yarrrrrr!

According to the federal indictment, authorities claimed that RNS was the world’s largest music piracy ring. Between [at least]1999 and 2007, Chow and co-conspirators illegally uploaded thousands of copyright-protected music files, which were provided by music industry insiders. In 1996, RNS released their first file, Metallica’s Ride the Lightning (Yes, this WAS one of the bugs up Lars Ulrich’s ass), and finished their 11 year run with Fall Out Boy’s Infinity on High. The group’s most notable claim-to-piracy-fame was the early leak of Eminem’s Encore album.

Federal authorities charged Chow with one count of conspiracy to commit copyright infringement, which carries a maximum prison sentence of five years, and a $250,000 fine. Moreover, Chow could have been ordered to pay restitution to the RIAA, the only named victim in the crime.

“I am relieved by the jury’s verdict and I am grateful to my attorney for his hard work,” says Chow. Houston attorney Terry W. Yates, who represented Matthew Chow comments, “We encountered some extremely complex factual and legal issues in this case. The jury was very attentive during the trial. Their verdict was just.”

In total, six members of RNS were charged with offenses. Patrick L. Saunders was charged on Aug. 14th, 2009, and plead guilty. James A. Dockery was charged on Sept. 8th, 2009. Adil R. Cassim, Bennie Glover, Matthew D. Chow, and Edward L. Mohan were all charged on Sept. 9th, 2009. Only Chow and Cassim were found not guilty. The remaining four pled guilty to copyright infringement charges, three of which turned state’s evidence and testified for the government in the Houston trial.

Lessons learned

Sooooo…what can we learn from this? There’s a number of things (both right and wrong) going on in this mess. I often wonder Karlheinz Brandenburg had any idea how his work might effect the lives, carriers, criminal records, of thousands and thousands of individuals. My thoughts on piracy are this: Find me a computer in this world that doesn’t have at least one pirated line of code on it, and I’ll find you a box to ship it in, because it’s gotta be factory fresh.

I’m not saying that I support music or software piracy, but rather – accept that they are here, and rapidly becoming, if not already, ingrained in our daily lives. I think we all know by now that Musicians aren’t making any money from record sales. The upside to this new economy is that Musicians are making money the old fashioned way, by going out on the road, playing shows, and earning it.  In fact, there are a number of bands that have already embraced this philosophy, and have given away their music (think Coldplay, Radiohead, NIN), and let’s not forget about The Grateful Dead and Phish, who for years, have allowed legal taping and trading of their live performances.

Likewise, the video game industry has been (and will perhaps always be) fraught with disc pirates. The solution? One small company in Korea decided to start giving games away, and charging one small piece at a time. The result? Microtransactions and social gaming as we know them today.

The positive way to look at the entire RIAA and copyright laws, etc. is that yes, it’s going to happen. However, that doesn’t mean that innovation and competition can not drive a better mousetrap. In a way, we all owe pirates a debt of gratitude. In another way, I blame them for the $75 ticket price, and $0.99 for a digital sword.

Pirates. Yarrrrrrr!

EA says, “Go ahead…Pirate it.”

Jun 24, 2009 by Dan Taylor    4 Comments    Posted under: Games, Technology

Certainly not a statement you’d normally hear from a top executive of one of the worlds’ largest games publishers, and certainly not from the man at the top, CEO John Riccitiello.  But low and behold, that’s exactly what he’s done. “By the way, if there are any pirates you’re writing for, please encourage them to pirate FIFA Online, NBA Street Online, Battleforge, Battlefield Heroes…” he revealed in a recent interview with IndustryGamers. “If they would just pirate lots of it I’d love them. [laughs] Because what’s in the middle of the game is an opportunity to buy stuff.”  In other words, what Riccitiello’s saying here is that the pirated disc is now more like the gravy and silverware, whereas the meat and potatoes of the title are contained online.

Now certified as a genuine success for EA, the Sims 3 was leaked weeks before the game saw store shelves, and included a note inside the file not to connect the game online.  The same note encouraged people to buy the game if they liked it.  Now call me cynical, but there’s something in the back of my mind that just screams ‘guerilla marketing’.  If that is in fact the case, I stand and salute you EA.  Well played.  Even Riccitiello is willing to give a comical nod to the concept, stating, “You identified our secret marketing campaign!  That was a very large scale – concentrated on Poland and China – demo program.”  Demo or not, it put the new title in a lot of hands, and generated one heckuva buzz that couldn’t be bought.

While the Sims 3 physical disk does include anti-piracy measures, a large portion of the game isn’t even on the disc.  Upon installation, users are presented with the proverbial ‘flip the switch to bring this badboy online’ option, upon which they then must download a massive 3gb ‘update’ in order to obtain the full experience. “A huge amount of the gameplay is an overlay for the community, where you are sampling assets created by other people. So for the pirate consumer, they don’t get the second town, they don’t get all the extra content, and they don’t get the community,” Riccitiello explained.

If any of this is ringing vaguely familiar, let me remind you of one tiny little giant coming out of Korea a few years back, Nexon.  Software piracy was, and continues to be a huge issue in the Asian market.  A few years back, a few crafty publishers took a wild and crazy idea, and made it a (rapidly becoming) global phenomenon: the free-to-play model.  In other words, publishers were sick of seeing diminishing revenues, all the while the word of mouth success of their titles were going through the roof.  The problem?  Piracy.  The solution?  Give the game away, and charge for access and/or items to be used within the game.

EA seems to be adopting, at least in part, a similar credo.  The Sims 3 is all about creating, downloading and purchasing new virtual items, something that fits in quite well with this theory, and it’s been all but confirmed that the NoCal giant has plans to turn the Tiger Woods golfing game franchise into a subscription based product.  Also, note that Riccitiello casually applauded the pirating of FIFA Online, NBA Street Online, Battleforge, and Battlefield Heroes – all free-to-play titles.  How does a gaming company lose money pirated free games?  They don’t.

“I’m a longtime believer that we’re moving to selling services that are disc-enabled as opposed to packages that have bolt-ons…. So the point I’m making is, yes I think that’s the answer [to piracy].” Riccitiello told IndustryGamers. “And here’s the trick: it’s not the answer because this foils a pirate, but it’s the answer because it makes the service so valuable that in comparison the packaged good is not. So you can only deliver these added services to a consumer you recognize and know… So I think the truth is we’ve out-serviced the pirate.”

Is EA about to just start giving games away and go 100% free-to-play/microtransactions?  I highly doubt it, as their physical disc-in-a-box sales are still thriving, but what this does signal is the first major US based player to actively step up to the plate, acknowledge microtransactions as a viable and successful business model, and unabashedly take steps forward in this direction.  If this method is even half as successful as it’s been in the Asian market…well, let’s just say EA’s current stock price of $20.84 a share could be one heckuva value.