Why Enterprises Lose Customers to Piracy and The Simple Strategy to Stop It

Just the other day, I tried to download a free episode of a new science fiction television series that streaming services were offering on their websites.  Instead, I was greeted with a message:

“Isn’t Available In The Country or Region You’re Currently In.”

It turned out that the free episode is only available in selected countries.  It wasn’t available where I lived so I couldn’t download.  There is no way for me to watch the free episode of the new series, unless I get it from a vendor selling pirated videos. 

Pirated videos are illegal.  Downloading movies, TV shows, and computer applications without permission from their owners are against the law and penalties await those who illicitly sell or possess such stuff or what is otherwise called intellectual properties. 

Intellectual property piracy, however, thrives because:

  1. They are readily available especially when the original stuff isn’t;
  2. They are much cheaper, as in a downloaded movie can cost less than a US dollar. 

Countries have cracked down on piracy to the extent that courts have penalized culprits and confiscated their assets.   Legitimate online streaming services offer themselves as alternatives for pirated media by providing access to original content at reasonable subscription prices.  Spotify and Netflix, for instance, have become very popular platforms for offering a wide expanse of music and video content at quite attractive subscription rates. 

Yet, the underground economy of intellectual property piracy flourishes.  The piracy business operates openly in shopping centres and in the internet.  People looking for newly released movies, new television episodes, and the latest software applications can find them easily from vendors, either in-person or virtual. 

Intellectual property pirates download illegal content via under-the-radar websites with the help of boosted internet connectivity.  Despite the low prices, the income from selling to a large market of buyers comes out profitably for pirates.  Downloading is fast such that interested buyers can get the newest content in real-time.  If someone wants a video, a song, or a software app that’s not available from legitimate sellers at his or her location, he or she can get it, fast and cheap from pirates. 

A similar scenario applies for popular brands of products.  Newly released name-brand cosmetics for example are bought from their home countries and then sold by independent sellers in places where licensed or exclusive dealers have yet to set up shop. 

Independent but unauthorized sellers bring in new models of laptop computers, tablets, and cell-phones while licensed dealers lose revenue opportunities as they wait for their allocations of new models to arrive from the original manufacturers.    

When there’s demand for new products, it would be common sense for the creators to distribute them as fast as possible to waiting consumers. Unfortunately, they do not.  They invest in only so much capacity that doesn’t immediately cover all locations.  They brush off waiting buyers and threaten pirates with legal action if their creations are copied illegally. 

But many buyers are willing to take the risk to buy illegally pirated products.  Sprightly sellers would ignore the possibility of prosecution.  They’d ship in what they can from source countries where new products are available and sell them to where buyers would be eager and able to pay.

Independent sellers would sell at higher prices if demand is strong but many would resort to razor thin margins that would make them comparable to the original prices of the creators.  For example, sellers have been found selling Apple products at margins almost unnoticeable in comparison to those from authorized dealers. 

Legitimate streaming services have almost no additional cost to distribute their content world-wide at a moment’s notice.  It is curious that they would still withhold distribution to countries with sure buyers that would opt for originals versus having to buy from pirates. 

The way to beat intellectual property piracy is to simply and swiftly distribute to where the demand is.  The price of not doing so is the loss of market share to underground competitors who will pick up the slack and profit in their absence.   People will buy from pirates if the content is available and they want it now. 

Consumers will not care about how much creators invest in their content and the ramifications of illegally procuring pirated products.  They also won’t wait for creators to sell original content if the pirated products are on hand and almost equivalent in quality. 

Piracy is an option when original products aren’t available and the demand is there.  The easy way to beat piracy is for enterprises to sell their wares everywhere where there would be certain demand.  Warnings about criminal prosecution for piracy can instil fear but it won’t be scary enough for impatient customers to opt for illegally channelled products. 

The technology is there.  The networks are there.  The available capabilities are there. Enterprises just have to plan and direct their products to their markets, make their money, and beat the pirates in their own game. 

Published by Ellery

Since I started blogging in 2019, I've written personal insights about supply chains, operations management, & industrial engineering. I have also delved in topics that cover how we deal with people, property, and service providers. My mission is to boost productivity via offering solutions and ideas. If you like what I write or disagree with what I say, feel free to like, dislike, comment, or if you have a lengthy discourse, email me at ellery_l@yahoo.com ; I'm also on LinkedIn: linkedin.com/in/ellery-samuel-lim-40b528b

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