Wednesday, April 16, 2008

To compete or not to compete?

Here is Matt Mason's keynote speech at The Medici Summit last month in Scottsdale, Arizona, and one of the best videos I've ever seen on piracy. It's a good primer on his book, The Pirate's Dilemma, which deals with how to compete with and/or fight a swiftly emerging business model.

  • If the average person were sued for the maximum amount they were liable every day for copyright infringment—meaning photocopying, backing up CDs to your computer, remixing tapes, etc.—they would be liable for $12.4 million. Every day.

  • American foreign policy during the Industrial Revolution was to completely ignore international copyright and patent laws... which allowed America to industrialize quickly and cheaply.
  • Initially, innovators are branded pirates by their peers—Thomas Edison created the phonograph, which musicians hated because they thought it jeopardized their income. Since then, musicians have made more money off the record industry they could have ever made by only playing live.
  • When Thomas Edison first created his film projector, he charged a license fee to use it. Many filmmakers thought Edison's licence fee was too high, so they ignored the law and set up their own film community far away from Edison's lawyers on the West Coast... that film community we now know as Hollywood. (The leader of these rogue filmmakers was William Fox, of 20th Century Fox.)
  • To compete with Chinese software pirates, Microsoft offers their software for only $3.
  • When pirates encroach on your market, the question is: do they add value? If they do, then you must then ask yourself, what business are you really in? What is your product? For example, Apple doesn't sell music or movies—they sell convenience.

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