Price policies: the best defense against piracy

Mar 9, 2013
Price policies and digital media usher in a new golden age, combating piracy and revolutionizing the entertainment industry.
Last month, Kevin Spacey delivered a lecture at the Edinburgh International Television Festival, discussing the new era of TV. Amidst a changing climate around traditional media, the actor presented a compelling argument about how digital media is ushering in a new golden age for TV. Spacey cited practical examples - series like Mad Men, Game of Thrones, Homeland, and Breaking Bad - which have attracted talent from Hollywood, an industry increasingly seen as addicted, reactionary, and misguided. Spacey's argument extends beyond TV, although that was the focus of his lecture. His points indicate that tools like Netflix are creating effective measures against unauthorized media distribution - a practice termed "piracy" due to the creation of a false, simplistic, and one-sided discourse. Netflix and Spacey are demonstrating to the industry that a smart and honest pricing policy eliminates the need for marginal markets. It's no surprise that Reed Hastings' company, based in Los Gatos (the same city where the Brazilian team was based for the 1998 World Cup), is making significant strides in the media industry.
Spacey's argument is simple: provide a quality product (like any of the series mentioned), offer it at a fair price through a straightforward platform like Netflix (or a cable channel like HBO), and people will prefer to watch rather than resort to unofficial downloads. The actor's reasoning, also the artistic director of the Old Vic theater in London, is brilliantly simple, as observed by Nelson Rodrigues.
[I've discussed this before](” target=“_blank” rel=“noopener noreferrer), and for those who have read this, I apologize, but there has been evidence for years, including scientific, that the "pirate" market is a problem of market failure, not legal failure. The 'corporatization' of the media market created markets with dominant or monopolistic leaders who, in turn, began to dictate their own price policies. Technology simply provided an outlet for a consumer base that had been exploited for years and is unwilling to pay R$30 to go to the cinema, but is willing to pay R$15 monthly for a Netflix subscription.
The Californian company represents a paradigm shift because it realized that realistic pricing policies would be profitable when the product scaled. If Netflix had been a Fox idea, it would likely be another digital gadget of the company today, concerned about not cannibalizing its own film market. Reed Hastings, the creator of Netflix, is doing just the opposite. He has achieved such growth that he is now transitioning from distribution and making strong strides in production (with excellent products like House of Cards). The cannibalization that Fox would have feared came anyway.
Thankfully, while Hollywood continues its regrettable decline, producing Spider-Men and Hulks that are too simplistic for a six-year-old with equivalent schooling, the best of cinema talent has moved to TV, where they are creating complex plots and characters and generating, as Spacey said, a new golden age of TV.
The Netflix episode should serve as an inspiration for the media industry to start considering the creation of services that are not legacies of traditional media models. Adaptations from newspapers and TV, purely and simply, have less chance of creating paradigm shifts like Netflix. Even the video platform, which has almost 30 million subscribers in the US alone, had a long evolution from its launch, but only achieved its current status due to a smart approach to its development. Other sectors that currently seem to be in an endless crisis - newspapers, news companies, and the like - may be sitting on their own solutions and not realize it.

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