< How to Beat Pirates

Transcript

Friday, April 08, 2011

BOB GARFIELD: This is On the Media. I'm Bob Garfield. Last week, former Senator Christopher Dodd, the new CEO of Hollywood’s trade group, the MPAA, declared film piracy to be the single biggest threat to his industry. On Monday of this week, the music industry’s trade group, the RIAA, asked a court to reinstate a 675,000-dollar verdict against a student in Boston who was caught sharing 30 music files online. And today, Michael Gallagher, head of the video game industry’s leading trade group – actually, we're not quite sure what Michael Gallagher was up to today because although computer games are theoretically as easy to pirate as any other kind of digital media, the video and computer game industry, as a whole, seems a little less caught up in antipiracy zeal. Robin Walker is a game developer for Valve Software, one of the more successful computer game publishers. He says that, at least in his industry, combating piracy doesn't mean criminalizing filesharing. It means offering a better product than pirates can.

ROBIN WALKER: I think it’s looking at the things that pirates are providing and asking yourselves how you can provide something better than that. So, to pick an example, if you purchased a product from us, we're going to continue working on that product after we've released it. We're sort of making that initial purchase of the product significantly more valuable over time. And so, if you somehow manage to get it for free initially but not in a way that lets you plug into that system, you know, that’s going to be a big hassle for you as you continue to try and figure out how to get each of those incremental improvements over the next few years for free, as well.

BOB GARFIELD: Now, do you charge for the game and then that’s the last transaction, or is that like owning a subscription that you continue to pay for as the game automatically updates itself?

ROBIN WALKER: We don't charge for the ongoing updates. You know, one of the things that are interesting as you look at the Internet, in general, and its impact on media, it’s created what we call “network effects.” If we take action one day that somehow brings another 50,000 or 100,000 people to the game, all of our existing customers just got happier. Their game literally just got better. And so, we sort of focus on not necessarily trying to figure out how to get more money out of you specifically, but how we can use you as a valued customer to attract more customers.

BOB GARFIELD: And that’s particularly true because it’s a multiplayer online game, right? So the quality, at least in theory, is measurably better, the larger the pool of players is, right?

ROBIN WALKER: Absolutely, but I think the Internet makes that somewhat true of almost all forms of media. You know, if you’re a fan of something, whether it’s music or a movie or something, there are - there are other people on the Internet who are excited, are fans of the same thing, and that there’s sort of value to you in finding them and creating something of your own that shows you’re a fan of that, and all those kinds of things, that it’s possible to build a business around it.

BOB GARFIELD: All right, now I notice that you have figured out a way to separate your growing number of users from their money and to do so in a way that discourages piracy. Tell me about that.

ROBIN WALKER: We also put our products in retail. One of the other things we kept finding was that we had some customers who had already bought the product from us who were starting to send us kind of strange emails, like, do you guys have a tip jar or something like that, where I can – you know, I sort of feel guilty about the amount of free content I've got from you in the last couple of years, I'd like to give you some more money. So we created a system which allows you to purchase additional stuff that you can use to customize your character and sort of show that you’re a fan. But to us they're all just specific implementations of solving this core problem, which is when people like something, they want to be able to show they like it, and one of the best ways you can do that as a customer is to send some money at it.

BOB GARFIELD: Our producer P.J. Vogt is himself a huge fan of Team Fortress 2. In addition, he’s extremely impatient and a, a total loser.

ROBIN WALKER: [LAUGHS]

BOB GARFIELD: And, as a consequence, instead of painstakingly accumulating power in this game, he buys it retail from - you. [LAUGHS]

ROBIN WALKER: Right.

BOB GARFIELD: And he couldn't do that you he didn't have a licensed version of Team Fortress 2, right?

ROBIN WALKER: Absolutely, yeah. And, again, it’s one of the reasons why being a legitimate customer has higher value than being an illegitimate customer. He also gets to play with all the other legitimate customers. So, you know, the decision he makes is validated to some extent by the other people who care about it, as well.

BOB GARFIELD: Well, you know, that sounds like a very pragmatic philosophy. It’s not one embraced by the recording industry or Hollywood who have, you know, engaged in wholesale lawsuits against pirates. You know, I'm wondering if your model has any applications to other kinds of content that is easily pirated online.

ROBIN WALKER: If you look back at the time when the sort of piracy of music started really taking off, one of the things that I think was a key component of that was that fundamentally the service provided by the software tools people were using to pirate were better tools than the legitimate tools in a world that allowed you to find music that you might like. And I think the success of things like iTunes has shown that when those legitimate tools come along and they catch up, that, that they succeed, as well. I think customers are fundamentally honest.

BOB GARFIELD: Uh, have you been drinking? I mean, iTunes does well, but it only captures about, you know, some small percentage of the download market, like maybe 1 or 2, and the other [ROBIN WALKER LAUGHS] 98 percent worldwide is stolen. I mean -

ROBIN WALKER: I have been drinking. [LAUGHS]

[BOB LAUGHING] Obviously, I'm much more aware of our space than other spaces, but to us it’s a pragmatic problem. You know, it’s not something you solve by taking philosophical attitudes towards what’s piracy and what’s not and what’s right and what’s not. You attack it much more at a - what can we work on that will result in the most value generated at the end of the day.

BOB GARFIELD: Robin, thank you very, very much.

ROBIN WALKER: No problem. Thanks for talking to me.

BOB GARFIELD: Robin Walker is a game developer for Valve Software.