Book: Matt Mason. The Pirate's Dilemma: How Youth Culture Re-invented Capitalism. Free Press, 2008.
From the publisher:
"The Pirate’s Dilemma tells the story of how youth culture drives innovation and is changing the way the world works. It offers understanding and insight for a time when piracy is just another business model, the remix is our most powerful marketing tool and anyone with a computer is capable of reaching more people than a multi-national corporation.
Do we fight pirates, or do we learn from them?
Ideas that started within punk, disco, hip-hop, rave, graffiti and gaming have been combined with new technologies and taken to new heights by the generations that grew up under their influence. With a cast of characters that includes such icons as The Ramones, Andy Warhol, Madonna, Russell Simmons, Pharrell and 50 Cent, The Pirate’s Dilemma uncovers, for the first time, the trends that transformed underground scenes into burgeoning global industries and movements, ultimately changing life as we know it, unraveling some of our most basic assumptions about business, society and our collective future.
As a result people, companies and organizations are now struggling with a new dilemma in increasing numbers. As piracy continues to change the way we all use information, how should we respond? Do we fight pirates, or do we learn from them? Should piracy be treated as a problem, or a solution? To compete or not to compete - that is the question – that is the Pirate’s Dilemma, perhaps one of the most important economic and cultural conundrums of the 21st Century." (http://thepiratesdilemma.com/about-the-book)
"I just finished watching a video of Matt Mason - author of "The Pirate's Dilemma" - giving a talk that more or less covered the topic of his book.
First of all, Matt really gets it. He really does. He is looking a piracy as reflective not of a failure in the legal structure, but failure in companies' approach in their own market. I hate to put too much of a commercial/free-market spin on this, for what
I'm going to connect it with is at times orthogonal to that perspective, but he's right when he says that pirates:
- identify gaps within and outside the existing marketplace
- may do damage, but carry valuable information in their actions
- can often harness the collective consciousness of their audience and turn that into social change
He primarily draws on pirate radio in Europe, but connects it with the record industry, fashion, etc. The solution he proposes to combat piracy is to either (1) fight it when appropriate, or (2) compete with it and treating it as a real (if illegitimate) force. To compete, companies should learn from where pirates are adding value to their product, where they are increasing a products recognition or brand value, and identifying advantages in selling convenience and experience." (http://www.swarmingmedia.com/2008/04/the_pirates_dilemma_and_opport.html)
Excerpts from an interview with Pat Parsons:
" So if you’re saying this is a dilemma that could affect all of us, are we then all potentially pirates?
The way we use these new ideas and technologies is changing faster than our laws can keep up, and doing something as simple as making a photocopy or recording your favorite TV show can technically make you a pirate in the eyes of the law. The Pirate’s Dilemma isn’t just about how we respond to pirates downloading or copying whatever it is we make or sell, it’s also about how we respond to new laws and restrictions taking away freedoms we have long enjoyed, laws which increasingly making it harder for us to build new businesses and organizations. In the book I never use the term ‘pirate’ negatively, I see many pirates as innovators and in some cases, defenders of democracy that should be celebrated and encouraged.
I called the book ‘The Pirate’s Dilemma’ and not ‘The Pirate Dilemma,’ because I see no difference between us and them. Illegal pirates, legitimate companies, and law-abiding citizens are now all in the same space, working out how to share and control information in new ways. The Pirate’s Dilemma is not just about how we compete against pirates, and how we treat them, it’s also about how we can become better by recognizing the pirate within ourselves.
You mentioned that you use Game Theory to explain this problem?
I studied Economics and Economic History at The University of Bristol, but had never used my degree in any practical way in my career before. The reason the title ‘The Pirate’s Dilemma’ made so much sense to me (my buddy Frans came up with it) was because as soon as I heard it, I began to think of the problem as a Prisoner’s Dilemma. I don’t get into any heavy econometrics, but when companies are working out how to respond to pirates, and if they should compete with them, it often seems that they’re damned if they do and damned if they don’t. But it’s not a classic Prisoner’s Dilemma – companies who compete will always be a better off in the long term than those acting only in their own self interest to preserve the old business model.
If pirates are in a market place long term, what they’ve actually done is created a new space - a new business model. If a legitimate company’s only response to this is protesting with lawsuits and persecuting their customers, the real problem is that they no longer have a competitive business model. It only makes sense for those companies to learn to compete with pirates in this new space, or risk going out of business altogether. Persecution of your customers and refusing to work in the newly created space is unsustainable - the demise of the music industry has proven that.
How did you come up with the idea for the book?
I grew up in London obsessed with youth culture, and was a DJ on a few of the pirate radio stations that created and nurtured so much great music in the city. For me it was always fascinating how this system worked so well. Consistently, support from pirate DJs would send unknown artists to the top of the pop charts and pave the way for new music scenes to evolve into sustainable industries. We were creating new markets, new cultural spaces. Over the years I worked at some of the world’s best-known ad agencies, media companies and major record labels and saw many good ideas work their way up from the street into the boardroom. As the founding Editor-in-Chief of RWD, I used my experience in both worlds to grow the magazine into the UK’s largest urban music title, and one of the country’s coolest youth brands. In 2004 Gordon Brown asked me to work with him on a campaign to help inspire entrepreneurship amongst other young people in the UK, and Prince Charles presented us with the London Business of the Year award. That made me realize quite how seriously the link between youth culture and innovation was being taken. After moving to New York City in 2005, I realized somebody needed to write a book about all this." (http://thepiratesdilemma.com/about-the-book/q-a)
Interview with Strategy-Business:
"Mason’s premise: Thanks in great part to the Internet, piracy is becoming more firmly established in our culture and economy. Consequently, it is incumbent on every industry — not just media and entertainment — to come to terms with that reality or at least to try to understand how piracy delivers value, in order to compete with or perhaps even benefit from it.
S+B: In your book, you quote the co-chair of Disney as saying, “Piracy is just another business model.” What does that mean?
MASON: Look at the DVD pirates on Manhattan’s Canal Street. They release films on DVD for US$5 just as Hollywood releases the films in theaters. That business model is in direct opposition to the way Hollywood set up the system. Hollywood’s model depends on exclusive release of films to theaters, followed months later by a DVD release. Yet despite the activity of the pirates, the summer of 2007 was Hollywood’s biggest ever, with movies taking in $4 billion at the box office. That doesn’t add up; if piracy is such a problem, then you would think it would have a negative impact on the box office. Hollywood has simply refused to acknowledge the idea of simultaneous release because they’re so worried about the effect it will have on theater revenues. But according to the evidence, movies in the theater and movies on DVD are two different products. That tells me that if Hollywood accepted the presence of the pirates’ business model, as Disney’s co-chair seems to have, the movie companies could actually learn how to compete with them.
Every company is capable of having its business model turned upside down by piracy, but every business is also capable of competing with that model. The people I refer to as pirates in the book are all people who use information in really unconventional ways. So rather than thinking about how we can stop piracy, let’s consider how we can come up with better ideas by thinking in the same way as the pirates.
S+B: You have said that there are going to be more and more instances of companies encouraging us to share, use, and disseminate information and content more freely. But why should companies be willing to allow people to share?
MASON: The kind of boundaries that used to exist in capitalism are breaking down. Capitalism used to be about whoever owns the means of production calls the tune. Now, it’s about the quality of the ideas you produce. It’s about creativity. That fact is causing a shift whereby companies are reluctantly starting to compete with piracy because they have to. As more people do that, I believe the benefits of making content more freely available and working out other ways to make consumers pay for it are going to become more obvious.
But this shift won’t be easy. Ten years ago, all of the major music labels knew they could sell music online, but they didn’t want to — it wasn’t in their interest. It took an outsider, Steve Jobs, to force the labels to act together and agree to do this. But now, Jobs and iTunes are in the same boat. A licensing model in which people were charged a small fee each time they listened to a song, for instance, would suddenly put iTunes in a much more competitive marketplace. And the notion of licensing copyrighted material would disrupt a lot of other incumbents, even the new ones. It would be really bad for Google, for example, which makes its money by collecting and disseminating other people’s information and putting its own ads around it. But in a licensing model, Google would have to pay for that information, too." (http://www.strategy-business.com/li/leadingideas/li00066?pg=0)
"Mason completed a degree in economics and economic history at the University of Bristol in the U.K., worked for Atlantic Records in the press department and in advertising at Saatchi & Saatchi, and then founded the urban music magazine RWD (pronounced “rewind”). His first book, The Pirate’s Dilemma: How Youth Culture Is Reinventing Capitalism (Free Press, 2008), examines how interconnected cultural pursuits such as piracy, hip hop, remixing music to make new songs, graffiti, and open source have transformed how we think about using and reusing information." (http://www.strategy-business.com/li/leadingideas/li00066?pg=0)