Piracy – Engine for Innovation?

The industry recently saw a wonderful essay on piracy written by Robbert van Ooijen, who has just graduated on Internet music and music piracy as the master of New Media & Digital Culture at the Dutch University of Utrecht.

The essay calls to learn from piracy, and this is why. A few days ago, the US government has prepared another list of the “notorious” world markets for copyright violation and counterfeiting, compiled from complaints of copyright owners. This list can be useful for businesses, online services, and maybe even the entertainment industry itself – as a valuable source for innovation.

The problem is that when people talk about piracy practices they can often see only its negative sides, regarding it as stealing and unfair competition. However, there is another side of piracy which shows it as a useful source for market insight, a creator of new markets, and even an inducement for innovation.

First of all, piracy practices can be used for market insights. For example, Napster revealed the massive demand for online, digital music, demonstrating a desire to have access to digital high quality recordings, a wide selection of music, and a user-friendly service – which none of the existent legitimate services at that time could offer. Later, Napster helped establish a new market for Internet music, the most obvious legal example being the iTunes Music Store which proved that people were also willing to pay for online music. Finally, piracy formed an inducement for legal, innovative business models like streaming instead of file-sharing (remember YouTube?) – it is now becoming a common activity offered by lots of legal services.

As you can see, originally piracy practices and services could eventually evolve into legal businesses – even Napster tried to accomplish this but unfortunately failed. As for YouTube, it initially had struggles with pirated videos but finally closed a deal with royalty collecting societies and music labels. Another good example is Grooveshark, a popular streaming music platform, which is often considered as a pirate service, but is currently trying to make the transition from a semi-legal service to a legitimate one.

So, why can’t pirate services be regarded as an engine for innovation? Perhaps, if piracy practices were regarded as a source of innovation rather than just a negative thing then industry could actually benefit from piracy cultures.

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