Is Obscurity Worse Than Piracy?

Last month saw the International Day Against DRM, organised by Defective By Design (logo pictured above). The action was intended to highlight the perils of Digital Rights Management (DRM) technology. Companies such as Apple use DRMs extensively to control what and how their content can be shared between users. Defective By Design allege that DRMs restrict users’ ability to freely use their purchased movies, music, literature, software, and hardware in ways they are accustomed to with ordinary non-restricted media such as books and CDs. The group argues this poses a threat to innovation in media, privacy and the freedom of computer users. Defective By Design have 12,000 members, so one could be forgiven for thinking that this is a movement that has yet to take hold.

What was eye-catching however was the support of Tim O’Reilly, CEO of USD100m publishing company O’Reilly Media. (Inc. magazine calls O’Reilly the ‘Oracle of Silicon Valley’.) O’Reilly’s support took the form of an article on LinkedIn outlining why his company had eschewed DRMs and why he thought that piracy is a tax that…

…at worst may chip a few percentage points off the earnings of people who are already famous, but lift the visibility of everyone else.

To the ears of this conventional IP practitioner, who lives in wall-to-wall anti-piracy rhetoric, this is tantamount to blasphemy! But could Tim O’Reilly have a point? Mr O’Reilly has built an undeniably successful publishing business, so perhaps it is worth hearing him out.

Tim O’Reilly’s article revisits an essay he wrote 14 years ago and explores lessons that have helped guide O’Reilly Media’s strategy and fuel their success. What was this strategy? Lower the barriers to the spread of knowledge and then provide subscription access to a body of knowledge so large that nobody could possibly download it all, and constantly update it with new sources of value. He describes the lessons behind this strategy:

Obscurity is a far greater threat to authors than piracy. With several million books in print and 100,000 new titles added each year, where fewer than 10,000 of those books have significant sales, and each of these enjoy only a few months on the shelves of high-street bookshops, the vast majority of books are destined to linger in obscurity. The same applies to music and films. Lowering the barriers to distribution on the web is essential; it is good for artists since it gives them a chance to build their own reputation and visibility, and work with entrepreneurs in the new medium who will be the publishers and distributors of tomorrow.

Tim draws a distinction between the wholesale copying of illegitimate products and online filesharing by enthusiasts. But even with the presence of large-scale piracy, O’Reilly has found no abatement in sales of printed books. He also notes that estimates of revenue lost to piracy assume that illicit copies would have been paid for, and credit is never given for the legitimate copies that are sold when people upgrade from their illicit copies. O’Reilly Media have therefore opted to maximise exposure through all channels; they provide free information sites and open licenses to books to build awareness of products that otherwise would be ignored, and build brand loyalty by giving away products that can no longer be economically sold. Their most successful products are print/online hybrid, using multiple ways to present the same product to increase the overall size and richness of market.

O’Reilly’s ultimate lesson quotes Han Solo from Star Wars: “give the wookie what he wants.” Give it to him in as many ways as you can find, at a fair price, and let him choose what works best for him. DRM just seems to get in the way of the wookie.

The original version of this article was written for the IPKat by Ben Williams. It has been reproduced under a Creative Commons CC BY 2.0 UK Licence.

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