Jan 31 AT 2:35 PM Edgar Cervantes 31 Comments

To pirate, or not to pirate… that is Rovio CEO’s question

hacker Image via: altemark with Creative Commons

We’ve seen the battles the music industry has fought against piracy. Surely, it is a gruesome war, and it not only happens with music. Piracy exists within all content and products; we see it very often in the Android ecosystem. We tend to look down on it, as it is considered stealing. But is it always a bad thing? Rovio CEO Mikael Hed does not think so.

We could learn a lot from the music industry, and the rather terrible ways the music industry has tried to combat piracy.Mikael HedRovio CEO

There’s no doubt that the Angry Birds creators would prefer customers buy apps and products legally. But they simply don’t believe it’s worth the millions of dollars and effort to fight against it. Mikael Hed made a rather controversial appearance at the Midem music industry conference in Cannes, talking about how badly the music industry has handled this business.

Piracy may not be a bad thing; it can get us more business at the end of the day.Mikael HedRovio CEO

In fact, Mikael claims Rovio sees the court route as a pointless solution, with the exception of times when pirated products are harmful to Rovio. But if such unofficial products are not harming the company’s image, Hed mentions it could work as a booster to create a bigger fan base. The idea seems weird, but look at it as “free advertisement” and it should make more sense. The company may not be making any money from pirated products, but more people playing and more people having Angry Birds plushies will make more people aware of the product. This creates a fan base that will help Rovio earn profit in the future.

We took something from the music industry, which was to stop treating the customers as users and start treating them as fans. We do that today: we talk about how many fans we have.

If we lose that fanbase, our business is done, but if we can grow that fanbase, our business will grow.Mikael HedRovio CEO

Undoubtedly, Rovio has a much different business than the music industry. We’re sure it hasn’t lost as much money, either. But this philosophy may be the answer for many companies out there, because we’re also sure Rovio hasn’t spent even a third of the money music labels have trying to fight piracy.

Mikael Hed mentions that they are in fact trying to avoid piracy in other ways. For example, as you may have noticed, they use their own apps as a channel to their store. This might drive more legitimate sells in the future. But they have found a way to use the “bad boys” to their advantage.

As for pirating, we suppose you can feel a bit less guilty if you’ve ever illegally downloaded a Rovio app. But we’re not condoning any type of piracy. These guys work hard at what they do, and we believe they deserve the few bucks they ask for.

We often see a reverse psychology effect. For example, I tend to be much more dedicated to any assignments when I know the assigner is a bit more open, because there’s some kind of bond created — like a thankful appreciation. That responsibility to do right, because you’ve been treated right. This could be something that Rovio takes seriously. What do you guys think? Should more companies adopt this philosophy? Would it simply bring more chaos?

Via: The Verge

Source: The Guardian

Hello, I am Edgar Cervantes. I am an avid Android fan, and keeping myself updated on the topic is part of my daily life. I will always work hard to give the best of me to our community of Android enthusiasts, and I am very honored to be part of this ship. Hopefully we can all enjoy sharing our knowledge and opinions!

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  • spazby

    I don’t believe in piracy…. if I find something worth the money, I buy it… If I think it is overpriced, I pass…

    • AsakuraZero

      exactly if people like your product they will buy it if not they would not as simple as that

      yeah there are some cheapasses but meh everybody ends buying something that they like.

      we just copy information not stealing it per se but some people just like to complain about some “ghost” loses of profit, and spend money in legal ways

    • Thomas Biard

      I concur. I have downloaded many-a-torrent but in the end, if I hadn’t of downloaded it, it would have never watched/listened to it. I certainly wouldn’t have rented it. If something appeals to me, I will buy it first because I enjoy it, and second because I want to support the creators.

      PS-I stopped downloading because I got caught seeding and was given the option to stop immediately for good or be sued…I took the cheapest option.

  • Jeff Pan

    Exactly – Hollywood need to understand this! If you give people a reasonably cheap way to stream/download movies, they would take it. !

    • aranea

      That’s my problem too. I don’t have cable TV so if I want to watch some HBO show I want an option to pay for it. If it doesn’t exist or if it’s way too expensive I either don’t watch it or… But with apps I either buy it or find a free alternative app.

      • tarwinia

        Exactly, if I could get just HBO, or even HBO in addition to the basic cable package then I’d be fine with it, but the fact that only eat for me to get HBO here is to get the premium cable package along with around 300 channelsvi don’t care about seems ridiculous. And even then it’s not even HD. To get HD I have to go up several tiers and end up getting 6 different HBO variants in addition to the HD one.

  • slg

    as hard times come around stealing goes up when the hard times aren’t so hard stealing goes down..,,,,,entertainment for the common man is just to dang expensive and all they want is to show the family a good time for a reasonable amount but 30$ and up for a family to go see a movie that is excessive…

  • Matt

    I remember when I first heard of Angry Birds. I thought it looked like a silly dumb game and would never have bothered to buy it..

    Someone posted a hacked version and I’ll admit I tried it..Fell in love with the game and bought it immediately and have bought all version since.

    • http://www.anthonydomanico.com Anthony Domanico

      you bought the free angry birds games? How does that shit work?

      • http://www.ndroidgamers.com B2L

        I think you’re also forgetting about the paid ad free versions.

        • http://mihai.discuta-liber.com/ tmihai20

          There are also the PC versions, which are still not present on Steam. I choose to pass if something doesn’t appeal to me, I buy games on sales (Steam FTW). If music could be bought as easily as I buy games on Steam and with the least intrusion from the labels, I would do it without hesitation. I guess that is why MegaUpload has been shut down (they wanted to launch Megabox, a site where artists would get most of the profits). I guess buying my first game on Steam 3 or 4 years ago made me realize that there is something better than piracy. Lots of publishers could learn a thing or two from Rovio, if a product is good, people will support you and they will buy it.

  • vid500

    I personaly think that the piracy doesn’t effect the real profit of good companyes, if I like an app I buy it and other I do not use. And I think that “piracy” does a great job for jung people, who with programs (PhShop,………) can learn to use them and when you use them in the future in your proffesion, you have to buy them. So the companyes has a benefit from it, they let you use it when you study and then have a dependent costumer. (and the student versions do not eaven get close to the profesional)
    the music industry just hasn’t the right aprouch to the changes made by the internet, thay have to realise that no one is prepered to pay if they produce crappy music. I buy music but just the songs I like. Why should you be forced to by a whole album, if just one song is great?

    A grat video from TED:

  • fatspirit

    Yes, products just have to be affordable for the target group. And Rovio knows how to do this. Mostly (:

  • Slith

    Pretty controversial that he is stating this publicly, but how obvious is that the music industry screwed themselves. Well Apple screws them pretty good as well.

  • McLovin

    During the Napster days I had plenty of music mp3s. But those were the days I actually bought more music than I had ever bought ever and since. Because I was exposed to more music I purchased more music.

  • baudelier

    To me piracy is a matter of convenience.

    I can’t remember the last time I fired up a music torrent, between
    Amazon MP3 and Google Music its One click to purchase and in less
    than 10 seconds I’m streaming my music.

    It’s the same thing with video. Between HULU plus, Netflix and, Crunchy
    Roll I’m covered. If I really like something I have Amazon Prime with its
    2 day Free shipping.

    It is simple. Make it convenient and people will buy, make people jump
    Through hoops and fear the almighty power of the torrent.

  • Xlythe

    I pirate. If I didn’t, I couldn’t justify spending the amount of money I do on the Market (40+ paid apps). Pirating lets me try new games/apps without putting down money first. There’s no 15min time limit counting down in the back of my mind, nor the hassle of a lite version that removes the features I want to try out. Even apps I haven’t bought yet, I recommend. And honestly, the DRM on the apps I have paid for annoys the hell out of me.

  • tarwinia

    That’s not reverse psychology.

    As for piracy, there are many reasons. One being that some products aren’t available in certain regions (a good example is Desert Winds and Qualcomm Game Command outside the US despite Qualcomm based devices being available worldwide). Another is the inability to pay online.

    Here in Mexico you can find bootleg cd’s and such everywhere. But I am guessing piracy went down a bit (I am not saying that a lot, but something is better than nothing) when itunes prepaid cards became available in music stores and convenience stores since people without credit cards finally had a way to pay for it.

    Then there’s curiosity, when people acquire something out of pure curiosity, the things they would never actually pay for. The hope in these cases is that if they like it they will go and buy it.

    Then there’s overpricing. I once bought a DVD here for about 40 dollars when it would have cost key about 12 bucks back in Canada. I still paid for it because I didn’t want to buy bootleg but it is still a ridiculous markup. There are times when I’ve gone to buy a cd and didn’t buy it locally because they weren’t available or just too expensive. I am full believer in supporting the artists/creators, so if those extra 20 or 30 dollars went to them then I’d be all for it, unfortunately it doesn’t go to them. In those cases I just ask people to bring me an (original) copy when they come visit.

  • Oskar Wismierski

    Soon, he will become a business guru of our times..

  • Avi

    Here’s the problem I have. I saw CacheMate for Root Users being pirated by the thousands and it bothered me. Then I realized that it was helping the app become popular and it wasn’t costing anything for people who weren’t going to buy it anyway (a terrible excuse and I still consider it stealing but it didn’t technically hurt my bottom line). Then I released Game On to the Market. The problem now is that when people pirate the app, and they are, it literally cost money. I pay for server space and when people don’t pay for the app and download from my server they are literally stealing money from me. It also costs me in the form of support. I have no doubt answered emails from people who pirated my apps. That costs me time and that’s not free. So the multi-millionaire CEO of Rovio may not mind piracy because his brand grows bigger, when people pirate my apps it literally takes money out of my pocket. If piracy meant I “only” made $10 million instead of $11 million then I wouldn’t mind either.

  • http://None Javier Bastardo

    As a open-source, information-sharing, privacy loving, liberty, freedom and openness supporter, I approve of his saying.

  • http://www.focuszonedevelopment.com Homncruse

    There is definitely something to be said about companies who treat all their customers like automatic pirates (e.g., Electronic Arts, specifically Blizzard). Treat me like a pirate from the start, and I will pirate from the start.

    You want my money, first you need my respect.

    You want respect, you respect me.

    You show me disrespect, you do not get my money. I don’t care if your product makes me daily sandwiches and folds my laundry. If you require me to jump through several activation and verification hoops every time I want to use it (even if they’re all automated, such as requiring 24/7 internet access), without a usable product if that otherwise-unnecessary requirement is not met (e.g., no offline play when traveling with my laptop), I will not enjoy your product. I will not give you money for your product. I will find ways around your measures. It’s cat-and-mouse.

    I’m not saying piracy is right. I’m saying that it happens, and while I have a disposable income and have no problems giving my money to companies who treat me with respect and develop quality products, a failure of one of those results in piracy (a failure of both is a product I wouldn’t want to use anyway).

    I went off on a little tangent, because while I love Blizzard’s games, I have not purchased Starcraft 2 and do not plan to purchase Diablo 3, no matter how much I look(ed) forward to them, because of their draconian DRM and frequent “phoning home” to verify your copy is legitimate. They treat every customer as a pirate. They have lost me as a legitimate sale BECAUSE they automatically assumed I would be illegitimate. For what it’s worth, I’m not running pirated versions either, but their policy is one sale (and the sales of most of my friends in my gaming group) they will not get.

    • dcds

      That reasoning is flawed, in my humble opinion.

      The only reason they take safety measures to check if you’re a pirate is because there are many pirates. No matter how wrong that reasoning is, that does not, I repeat: that does _not_ give you the right to pirate their applications and games. What we can do is boycott them, voicing our opinions. As always, two wrongs don’t make a right, and we should _fix_ the root issue, not create another one.

      However, those are much more difficult things to achieve. It demands effort and courage to stand up. Which ironically seems to be what you defend at the end. :-)

      Also, and much more important, what you describe at the beginning, and it is what many pirates defend, represents a break of trust. Fundamentally, you’re gaming and cheating on other people’s free will. No matter how powerful and mean, a company can — and should have — the ability to know, ___in advance___, the terms of their produced content. You can’t change the rules “after the fact” (post facto) to benefit you. Otherwise, eventually, given enough thrust, that ends up in a “war of everyone against everyone”.

      Point is: you just can’t decide by yourself, unilaterally, the value of a good that is the result of sweat and time of others. That’s the essence of what’s wrong with piracy. Ah, and the fact that it’s easy and doesn’t have any coercibility if you do it, which again proves the point that if we trust good wiil alone. :-)

      Same thing goes with stores: if you walk into any store (Best Buy, nice guy pharmacy in the neighborhood, whatever), there are going to be checks. There are alarms, there are counters… you pay them, they register your payment and they let you go. That’s a physical check. DRM is the equivalent of those checks, but virtual. The amount of checks you can submit yourself to is another story… consider nobody is doing a crime, if it’s too stressful, I just stop buying at such location.

      My grandmother told me the same thing, that before (20s, and I live today) she could buy meat at groceries without even paying, because the community was well known, and basically nobody cheated on the local guy. With time, things changed, and security checks became a necessity because people started to cheat. Mainly because people became more anonymous, therefore the coercibility (enforced by the community moral standards) went away. You can even escalate that example to the TSA and airplane security checks… many decades ago, people just entered the airport at the gate, with barely any security.

      Granted, there are much better ways to implement those virtual checks, but you got the idea.

      There will always be thieves. And there will always be security checks. Whenever you buy anything, you’ve always been treated as a potential thieve.

      About SOPA/PIPA, I think the TEDTalks guy nailed it: he is *NOT* advocating piracy (?). He is against the reversal of the burden of proof that worked very well in our western society, and that fostered innovation and the ability and trust of one to seek self-improvement (seeing the reward enforced by previously known rules).

      Finally, about piracy and revenue, I’d guess that small innovators and indies are the ones who suffer the most with piracy. Big companies can dillute the amount of piracy, and they also win by other means, including piracy (achieving lock-in of the industry with their own de facto standards, see: Microsoft Office/Windows). But indies seldom have that benefit. They generally escalate their business from small revenues until they become big (if ever).

      Just take a look at the horrible image that Android used to have until quite ago, compared to iOS (the preferred by indies also for that reason). Fortunately, that seems to be changing.

      • http://www.focuszonedevelopment.com Homncruse

        Thank you for taking the time to put together such a well thought-out reply.

        To be clear, I don’t condone piracy “because you can”. I do, however, condone counter-measures to circumvent draconian DRM if it causes issues with a product you *legitimately own*. For example, if I went out and purchased a game that needed to phone home every few minutes, even in “offline play” mode, I would and have applied various methods to circumvent that phoning home so that I can play the game while traveling without reliable or always-available internet access.

        Regarding your “physical check” argument with alarms and such, I’m not against a one-time activation either. I buy the product, I prove ownership once, and I’m good to use it as I please beyond that, because I’m trusted that I still own it. To use the physical analogy of the DRM described in the previous paragraph, it would be akin to going to the pharmacy, providing a presciption, paying for the medicine, leaving the store, then having to provide your prescription and receipt of purchase again every time you needed to take your next dosage – or worse, needed to present your prescription and receipt for the entire duration of your dosage. If the pills last 4-6 hours, you’d better hold keep those papers handy for the next 4-6 hours.

        Look at what Gabe Newell (Valve, Steam) has to say on the issue:

        “In general, we think there is a fundamental misconception about piracy. Piracy is almost always a service problem and not a pricing problem. For example, if a pirate offers a product anywhere in the world, 24 x 7, purchasable from the convenience of your personal computer, and the legal provider says the product is region-locked, will come to your country 3 months after the US release, and can only be purchased at a brick and mortar store, then the pirate’s service is more valuable. Most DRM solutions diminish the value of the product by either directly restricting a customers use or by creating uncertainty.

        Our goal is to create greater service value than pirates, and this has been successful enough for us that piracy is basically a non-issue for our company. For example, prior to entering the Russian market, we were told that Russia was a waste of time because everyone would pirate our products. Russia is now about to become our largest market in Europe.”
        Source: http://www.tcs.cam.ac.uk/story_type/site_trail_story/interview-gabe-newell/

        Basically, make your product fairly available and provide a quality service, and you will have a minimal problem with piracy.

        • dcds

          I agree 100%.

          I was talking about some points raised, not because I said you agree with it. As I said, you even said that at the end.

          Beat regards.

  • cb2000a

    I don’t condone piracy at all. Most movies and most music I could care less about and the rest I either buy or rent. Hollywood puts out so much crap these days and then they wonder why there are less people watching network TV or going to movies. I am not about to drop ten bucks on most of what the movie companies offer these days. In any case piracy is wrong and we all know it….whether we do it or not.

  • smeghead68

    If it’s worth the money i buy it if not i’ll pass. More often than not i’ll pass on movies as there is really very little in Hollywood these days that is worth the price they are asking.

  • jsweetser2

    In highschool (circa 1992-1996) and college (1996-1999) i pirated every game and software product i had, including my OS. There were two reasons for this: 1) I could not afford them, and 2) I was anti-establishment back then and even joined a certain group to help distribute and package the software back when you had to break up and zip them up into 1.89meg files so they fit on floppies.

    These days I have a job and some money to spend each week. I have matured and consider that someone else also has a job – the person who created the application; and thus I either buy it, or don’t. I don’t bootleg anymore. There are plenty of ways to get what you want cheaper (be patient, get it on sale, use companies like steam and amazon to find products at lower prices).

    In contrast, i also purchase very few things these days. It has to be high quality, made by a company i believe in, and also have favorable reviews by people i trust. I don’t NEED most of the stuff i WANT, so i simply pass. I don’t look down on pirates, i simply hope they come to the same conclusion that I did – “One day you might make a product that someone buys to keep food on your table”