Piracy – Demanding innovation?

The problem of piracy is omnipresent in emerging countries like India. If you walk though any major street in Bangalore you can see the obvious examples of piracy sales which include books, movie CDs, games and software. Global organizations see this as a problem. In my opinion, piracy is another opportunity which needs innovation to open up new market opportunities. This long debated, controversial item is very much part of life in a country like India. When a much hyped movie hits the box-office, the pirated version in form of DVD, can be bought off the streets at a throw away price within few days. Copyright is taken for granted, even though there are laws to prevent this issue. It might look simple to look at, but piracy has become an organized industry in India.

Piracy
Piracy in India

The software piracy rate is growing at double digit rate especially in the operating systems domain. Purchasing original version of Windows is almost unheard, as most PC vendors install pirated version by default. Security precautions and patch mechanisms that Microsoft applies are overridden by even smarter ideas. There are multiple questions and arguments can be applied to this: Are we are not giving due importance to original versions? Is it the way we are wired? Should the regulatory systems be blamed? Are we bad people? Not necessarily. The answer is simple — we are not ready to pay for anything upfront if it costs more than we can afford. In a country with per capita income is about 35,000 rupees, how can we expect anyone to pay 10% to purchase the original version of Windows or 1% to purchase original version of a book? At the same time we cannot ask the educated elite of the urban population to buy the original version because they have more disposable income. They constitute only 2% population, who also tend to go with the trend. Even if they buy original versions, it cannot be a viable business proportion for organizations.

In a different perspective, in my opinion piracy is another form of an opportunity, which needs innovative methods to address. More piracy means people want a particular product desperately, which serves their need. Just because they cannot afford or got used to it, piracy takes the center stage. Innovation in terms of pricing, business model & offering need to be applied. The focus should be given on how to make things easily affordable by taking ‘micro-consumers to micro-payments’ model. Let us take the example of Indian mobile service provides. They have pre-paid plans for as low as five rupees (micro-payment), which work out for a daily eager (micro-consumer). Now companies like Tata DoCoMo have innovated even further by offering one second pulse, which is much different from minute based rates. With the sheer scale in sales, mobile service provides are getting their profits. In fact India is the fastest growing mobile market in the world. If the rate plans are in thousands, it would have been used only by the elite resulting in a very smaller market.

Similar approach should be taken for other businesses like book publishing (on-demand customized prints at affordable prices), software (subscription model bundled with technical support & upgrade) and on-demand digital movies (finding out alternative delivery and recovery models using upcoming technologies like DTH). The cost of it should be as low as a customer what a customer pays for a pirated version. Then only it can make a viable business proposition. Organizations need to develop deeper knowledge of the nature of customers than educating the customers about piracy. Understanding customers and their needs has been successfully done in some businesses (like mobile service providers mentioned above) but there is still a huge market waiting to be tapped across industries demanding ‘customer centric’  innovation.

In conclusion, I would say piracy is another form of opportunity. But where is the innovation?

[MyBangalore] Link to original version of this Article

7 Replies to “Piracy – Demanding innovation?”

  1. I think Moser Baer has taken an interesting approach in this regard. They have bought the rights for old movies and are selling the CDs at a very cheap rate. I bought a 3 movies (60s and 70s Tamil movies) DVD for Rs.30/-.
    I also believe Chetan Bhagat’s book are sold at Rs.99/- mainly to combat piracy.

    Of course, this approach doenst work in many other cases, but lowering the price where possible does cut off the oxygen supply to the “pirates”. 🙂

    NWritings

  2. NWritings – While price is a definite factor to look at, certain other ways (delivery model, channels etc..) needs to be considered to offer a compelling value for customers.

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