L.E.K.’s Frack Shares Piracy Estimates
By Chris Tribbey
Bill Frack, managing director of L.E.K. Consulting, has both good news and bad news for the media and entertainment industry.
His firm estimates there are 42 million people in the U.S. who pirate content, amounting to a billion pieces of content that are being illegally viewed. The good news? Nearly 95% of those people pay for content as well.
Those “dual consumers,” as Frack calls them, “One of the key things to being successful is understanding your customer, and to understand this problem, you have to know the customer,” Frack said, speaking at the recent Content Protection Summit, produced by the Content Delivery & Security Association.
Those who steal content can be broken down into segments, Frack said: they may be sensitive to the cost associated with purchasing what they want, or they may want to just build up their library of content. There are those who don’t think stealing content is wrong, but there are also those who do it simply because it’s convenient. There are hard-core content enthusiasts who’ll do whatever it takes to get what they want. And there are those who just do it on occasion.
“These segments … vary on the number of movies they watch,” he said. “They vary by their motivations.”
A cost-sensitive pirate may be part of a low-income family and “who may not have enough income” to get what they want, Frack noted. They may not like stealing, and they tend to give up more easily when confronted with barriers to pirating content.
They’re night and day different from people like the library builders: young, urban professionals who grab what they can because they can, not because they can’t afford it.
What may have been most frightening among L.E.K.’s findings was the 36% who responded in the affirmative that piracy was “no big deal,” a younger set of “consumers” who look at it as the norm, want it now, don’t feel guilty and basically say “why not?” “The irony is, it’s a very big deal,” Frack said. “The question for the industry is when they get older, get money, will they move over? The [results of the] music industry says don’t bet on it.”
Content owners and distributors won’t be able to convert everyone in those groups into legitimate consumers, but there are a number of things media and entertainment companies can do, Frack said. Protect what you own the best ways you can, while keeping a content pirate’s motivations in mind when offering content legitimately. Many occasional and convenience pirates won’t spend more than a minute fighting security measures to get something.
“As you think about your strategies, whether they be anti-piracy tactics or new services, you’ll find convenience comes into play,” he said. “Pirates are people like us. They’re not Jack Sparrow. They’re regular movie fans.”
Frack’s data — while certainly disconcerting for anyone in the business of being paid for their work — has some humor behind it. Instead of focus groups, L.E.K. started with one on one interviews with those who steal content, and from that conducted their survey.
“You get pirates in the room, it’s a very strange dynamic,” Frack said. “They start swapping secrets with each other on how to bypass the latest technology.”