Unauthorized Viral Marketing

There is a recent article in the NY Times about the threat to the movie industry of “digital piracy”. As is all too typical of modern journalism it argues from anecdote rather than data, and rather more unfortunately, as Mike Masnick from Techdirt noticed, its lead anecdote is spectacularly misleading. The NYT piece starts by noting that the anit-priacy efforts for last year’s movie Dark Knight were a miserable failure:

The campaign failed miserably. By the end of the year, illegal copies of the Batman movie had been downloaded more than seven million times around the world, according to the media measurement firm BigChampagne, turning it into a visible symbol of Hollywood’s helplessness against the growing problem of online video piracy.

It is no doubt true that Dark Knight was widely downloaded over the internet for free. However what the NY Times fails to mention is that Dark Knight was the largest grossing movie of 2008 and the second largest domestic (US) ever behind Titanic.

Given this commercial success could it not be the case that the downloads actually helped sales? In other situations this kind of downloading popularity is something that marketing executives and publiscists dream of because it is the heart of their “viral marketing” campaigns. The article goes on to note that many studios are now deliberately making shows available on line and mentions YouTube and other video sharing sites and notes that:

[M]edia companies are [...] losing the battle over illicit copies of full-length TV episodes and films. The Motion Picture Association of America says that illegal downloads and streams are now responsible for about 40 percent of the revenue the industry loses annually as a result of piracy.

This claim seems somewhat disingenuous. The revenue “lost” is a nominal sum arrived at by calculating what revenue might be obtained if every download were a $10 movie ticketor $15 DVD and ignores the obvious fact that people simply would not watch content if they had to pay $10 for it. Indeed giving stuff away for free (the time tested technique of the free sample used since the days of 1001 Arabian nights) is a highly regarded marketing technique and one that works remarkably well in the digital age. Monty Python recently created a dedicated YouTube channel where official copies of their output can be seen by one and all for free. This move caused considerable buzz (i.e. viral marketing) and the result is that their DVD sales increased by 23,000% at Amazon.

The NY Times says that some prefer to call movie/music piracy “digital theft”, pardon me if I suggest that actually it might be better known as “Unauthorized Viral Marketing”.