Disney-ABC gets a wakeup call: piracy identifies market opportunities

Kudos to the Anne Sweeney at Disney-ABC for seeing content sharing and piracy as something more than lost dollars. In an interestingArs Technica article, she notes:

"So we understand piracy now as a business model," said Sweeney in a recent analyst call. "It exists to serve a need in the marketplace specifically for consumers who want TV content on demand and it competes for consumers the same way we do, through high-quality, price and availability and 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."

When you start thinking this way, the goal becomes offering a more compelling product than file-swapping networks can provide, rather that attempting (for instance) to sue the users who like your content. For ABC, this has meant launching their own streaming media player and providing shows like Lost and Desperate Housewives online only minutes after they air.

I would take issue with her use of the term piracy in this context; what she's really talking about is content recording and sharing, and some of that is actually fair use of copyrighted material, as was acknoweldged by the US Supreme Court in the famous Betamax court case. But her point is still valid: piracy identifies market needs that aren't being filled. That's free market research. And anyone who pursues piracy with lawsuits instead of products to fill those needs, no matter how much the law is on their side, is losing the battle for the consumer's hearts and wallets.

The article concludes with what I consider to be a terrific less for everyone in the content business. ABC has 16 million reasons to pursue the legal content downloading market with products that satisfy the consumer rather than sue them:

While it's hard to compete with free, it's not impossible—witness the success of iTunes in both music and TV shows. You just have to offer a compelling product at a reasonable price that is simpler to use than the alternatives. When ABC introduced its own shows into iTunes earlier this year at $1.99 a pop, it sold more than 8 million of them without damaging its TV ratings at all.

Technorati Tags: ABC, Anne Sweeney, Disney, iTunes, Marketing, Piracy, TV