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Can impulse buys beat online piracy and save newspapers?

August 09, 2013|By Jon Healey
  • The Comcast Corp. logo is seen on the exhibit floor at the National Cable and Telecommunications Association Cable Show in Washington, D.C., in June.
The Comcast Corp. logo is seen on the exhibit floor at the National Cable… (Andrew Harrer / Bloomberg )

Here's an assumption underlying many a Big Idea online: If you make it easier for people to act on their impulses in a way that benefits your business, they will.

A good example of this is Comcast's reported anti-piracy initiative. And my hunch is that it might explain Amazon founder Jeff Bezos' $250-million purchase of the Washington Post.

Variety's Andrew Wallenstein reported this week that Comcast was trying to build support for a different approach to online piracy than the content industry's new "six strikes" Copyright Alert System. That system -- developed by representatives of the film, television, music and communications industries -- sends progressively stronger warnings to broadband customers whose accounts are used to download unauthorized copies of movies, TV shows and songs.

Comcast's alternative, according to Wallenstein's sources, would detect when someone was downloading a bootlegged video or audio file. It would then push a pop-up window onto the user's display, offering an authorized version of the file from an online retailer.

One very good thing about the proposal is that it tries to monetize piracy rather than banning it. The former is difficult, the latter is flat-out impossible. So kudos to Comcast -- which owns NBC, Universal Studios and several other copyright-holding heavyweights -- for seeing the opportunity that piracy represents, not just the threat.

There's no shortage of potential drawbacks. If the system only looked at downloads and ignored streams it would miss a large and growing percentage of the piracy. The library of authorized material is a fraction of what's available in bootlegged form. A system that relies on internet service providers to determine whether a downloaded file is infringing on a copyright invites all sorts of problems with false positives, such as the infamous YouTube video of kids dancing to a segment of a Prince song. And Comcast's proposal raises the question of where ISPs would steer people to purchase authorized versions of the stuff they're pirating -- would they give their customers a wide range of choices, or steer them to their partners' sites?

The most important issue, though, is whether the people who download illegally do so because they want free content, or because they're accustomed to getting their digital goods that way? Comcast is betting that a certain portion of the market falls into the latter camp, and they'll be willing to pay for legitimate copies once they're introduced to such sites or services as iTunes, Vudu and Spotify.

I'm sure there are folks who would be happy to pay for what they download, particularly when they see how good some of the services are. But I'd be surprised if most illegal downloaders felt that way. Some do so because the content simply isn't available legally. That's typically the case for a new Hollywood release, for which the home video "window" doesn't open until months after the studio has spent tens of millions of dollars marketing the film. And some people download bootlegged content because they're not sure they'll like it, so they aren't willing to pay for it upfront.

Part of the battle for copyright holders is overcoming that (unjustified) sense of entitlement among Internet users. Copyrighted works aren't like other consumer goods -- there's no guarantee of satisfaction, no promise of a refund if you don't like what you see or hear. The music industry can take a try-before-you-buy approach because people tend to listen to the songs they like over and over. Not so in Hollywood, where one viewing is often enough even for good films.

Nevertheless, Comcast is onto something here. If ISPs can offer people a legal alternative to a film or song at the moment that title has caught their fancy, they'll at least be making the pitch when it's most likely to be successful. And even if only a fraction of the broadband users bite, that's all incremental revenue.

Which brings me to Bezos and the Post.

A huge problem for newspapers is that advertisers are shifting dollars to other platforms they consider more effective -- e.g., Craigslist for classified ads or paid placement in Google searches for local retailers. But newspaper publishers are in a unique position, both to generate interest in something and fulfill it. Some of those opportunities are obvious, such as offering downloadable versions of movies and DVDs reviewed by the paper. Others remain to be fleshed out, such as how local restaurants might integrate the right kind of offers into features in the food section.

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