Avast! There Be Pirates! Arg!

Last week I commented that companies and our government need to come to terms with their feelings on piracy. Our trade representative is holding up Russia’s membership in the WTO until (among other things I hope) they deal with AllofMP3.com – an illegal music download site that also happens to be the number one download site on the planet.

The trouble was aptly summed up by the head of ABC-Disney recently.

“So we understand piracy now as a business model… we don’t like the model, but we realize it’s effective enough to make piracy a key competitor going forward. And we’ve created a strategy to address this threat with attractive, easy to use ways to for viewers to get the content they want from us legally; in other words, keeping honest people honest.”

BING! BING! BING! We have a winner!

This is exactly the right approach to a really tough problem. If a competitor was selling the same product you are selling (say barbeque grills) and kicking your ass, you would either a) lower your margin to sell more units, b) differentiate your unit so people understand the value proposition, or c) find another way to compete.

Unfortunately, in the case of piracy, the competitor is literally selling your product, to someone that should, by all rights, be your consumer. But they aren’t. So what do you do? Do you sue your potential customer? Probably not the best way to build a customer relationship. You find a strategy to compete.

Kudos to ABC-Disney for figuring this out and approaching this from a rational business perspective.

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