Tuesday, October 09, 2007

Piracy is Good....er

What am I saying?

A couple of months back, I bought an audio CD of Unnale Unnale, a popular Tamil flick, from Music World at Spencer's Plaza. Though the music was supposed to be good, we could not enjoy as some fault in CD and the player could not play it.

Recently, my friend gave me 'Cheeni Kum' VCD to watch. Same problem! The quality of the print was bad.

On the other hand, the pirated DVDs that I have bought at the Burma Bazaar equivalent in Anna Nagar have never given me trouble. And the choice of the titles is fabulous. The shopkeeper is also honest with you and informs whether the print is good or not.

Why would I go and buy original titles if I get a decent pirated stuff in the market at a cost which is almost one-fifth of the cost of an original.

Oh oh! I am educated. I am bound to follow rules and regulations. Respect copyright laws.

And oh yes, the companies spend loads and loads of money to create (software, movies, music etc). How can some dirty operator harvest the crop while they have toiled so hard?

I am sorry folks. But I am not alone. Millions and millions of people around the world are with me when they buy pirated stuff. There could an entire system which might be protecting the piracy industry.

As a marketer, is there learning?

Let us re-learn Market Segmentation. Wikipedia describes Market Segmentation (http://en.wikipedia.org/wiki/Market_segment) as a process of dividing a market into distinct subsets (segments) that behave in the same way or have similar needs.

Let us take an example. An original title of a movie may/would costs a consumer about Rs. 250. In the Burma Bazaar market, it will cost him/her only Rs. 40 (in some cases Rs. 50). What is surprising is that the piracy industry seems to know more about segmentation. There is a normal print then there is Gold bit. Of course, gold bit costs more than the normal print. Fulfill your customers needs based on affordability and preference seems to be the underlying point.

Can record companies take a leaf out from piracy industry's book? The Fortune at the Bottom of the Pyramid: Eradicating Poverty Through Profits by CK Prahalad is all about this.

Instead of fighting such a hard loosing battle against piracy, why can't companies just reap the benefits by serving a market (which in actuality is a very large market vis-à-vis the market that they get to serve in the current paradigm)?

I am not sure about the numbers but am pretty confident that the number of people buying pirated movies and music is much much much much...higher than those who shop for original prints.

I am also confident that this is workable model.

To illustrate, a music company should create two sets of labels. One, which costs about Rs. 20 or 30 or even 50. The other, should cost Rs. 300 or whatever sum the company thinks is appropriate.

The difference?

The formats. The difference between hard cover edition and paper back. Rs. 20 (or so) CD could be in a format which is in compressed format. The Rs. 300 CD should be in a format that provides the best quality. Say the difference between mp3 and WMA. Let connoisseurs pay for the quality they want. Let others buy what they would like to afford.

In the end, the marketer has a much larger market to serve and can increase revenues. I am sure that production, with automation and computerization, is not a concern or an issue.

The upside is also that the market channel already exits. While the upend products could still get sold in Landmarks, Odysseys, and Music Worlds, leverage Burma Bazaar style shops to push your lower priced products.

I am also baffled as to why Tamil film industry (or for that matter any industry which is highly regulated) wants to keep their releases boxed to theaters for long time. Why are not the producers willing to explore the opportunity of reaching out to audience through other markets?

Today, movie going has become an occasion. Theaters charge a bomb and rightly so. They provide an experience and charge for it. A family of four might end up spending upwards of Rs. 500 to watch a movie. Not so feasible even for an upper middle class family (if they are cinema-crazy which many families are).

Don't they know that despite all their efforts, Sivaji DVDs will still be available in the market, on day one?

I am not sure how this would work for software industry but there might be some learning for them, too.

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