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(originally published by Booz & Company)


We Are All Pirates

But this shift won’t be easy. Ten years ago, all of the major music labels knew they could sell music online, but they didn’t want to — it wasn’t in their interest. It took an outsider, Steve Jobs, to force the labels to act together and agree to do this. But now, Jobs and iTunes are in the same boat. A licensing model in which people were charged a small fee each time they listened to a song, for instance, would suddenly put iTunes in a much more competitive marketplace. And the notion of licensing copyrighted material would disrupt a lot of other incumbents, even the new ones. It would be really bad for Google, for example, which makes its money by collecting and disseminating other people’s information and putting its own ads around it. But in a licensing model, Google would have to pay for that information, too.

S+B: Have you tried to adopt content-sharing ideas in your own work?
MASON: I’m talking to my publishers about giving away a free e-book version of The Pirate’s Dilemma, which I think would be a really great marketing strategy and would actually help us sell more physical copies of the book. But they’ve been very cautious about doing that because it’s a huge change for them in terms of how they think about what they sell and what they do. In fact, book publishing is a really good example of the pirate’s dilemma. From the author’s point of view, the threat really isn’t piracy; it’s obscurity. Two hundred thousand books are published every year, and the average book sells 500 copies. Against those odds you need as many people reading your book as possible. One of the best ways to do that is to give away an electronic copy in the hopes that people will read it and talk about it, and that it will generate a buzz that leads to the sale of physical copies.

When authors offer free versions of their books, one of two things typically happens. Either people like the book and the pirate copy helps sell print copies or people don’t like the book and so they don’t pay to download it or buy the print version. What is lost by downloading a free version of the book?

Paulo Coelho, author of The Alchemist, recently said that he had been leaking his own books to BitTorrent (a peer-to-peer downloading site) behind his publisher’s back, and that this had been helping him sell books. He has since created a Web site where his books can be downloaded for free. In Russia, after he made a Russian translation of The Alchemist available on his Web site, Coelho went from selling 1,000 physical copies of The Alchemist a year to selling 1 million copies of all of his books within three years. Now he sells 10 million books a year in Russia.

S+B: Are there any industries that you believe are adapting well to the threat from piracy?
MASON: Yes, the fashion industry. In 2006, Congress began considering extending copyright protection to fashions — which had never before been protected — to try and bring them more in line with European laws, which are designed to protect smaller companies from having their designs stolen immediately by large retailers. Yet even during this reevaluation it was universally accepted that piracy is literally how the fashion industry innovates. Because people are able to copy the 3-D design of garments, they can create trends. And because those trends can be disseminated so quickly and the new rapidly becomes old, we have seasons in fashion. This allows the fashion industry to sell more clothes than if individuals could protect their designs for a long time and trends lasted a couple of years rather than a couple of months. The problem now is that copying is happening so fast in fashion that people are losing sight of the original.

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  1. From Major to Minor,” the Economist, January 10, 2008: On the trials and tribulations of the music industry.
  2. Kal Raustiala and Christopher Sprigman, “The Piracy Paradox: Innovation and Intellectual Property in Fashion Design (PDF),” Virginia Law Review, vol. 92, no. 8, December 2006: Another legal take on the issues surrounding the legality and value of copying — this one concerning the fashion industry.
  3. John Tehranian, “Et Tu, Fair Use? The Triumph of Natural-Law Copyright(PDF),” University of California Davis Law Review, vol. 38, no. 2, February 2005: An in-depth analysis of the long history, legal merit, and social value of the concept of “fair use.”
  4. The Pirate’s Dilemma Web site: Information about Matt Mason and his book, including a useful Weblog on issues pertaining to intellectual property, copyright, and piracy.
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