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This is just a real observation.

Your observation is correct, but I'd interpret it differently: The answer should not be to ban MegaUpload. The answer must be to provide legal services that are at least as convenient as MegaUpload.

There's a huge market of people who pirate content not because they're unwilling to pay for it, but simply because it's either impossible or extremely inconvenient to get legally.

The point I'm trying to make is....shifting the pain point. In this example itunes has been shifted past a particular persons pain (time/cost) point to be a convenient legal solution. Good point on the non availability in certain regions. At least my experience with itunes is that they are improving the service to lower that pain point in those areas too. You could not get certain content in canada a while ago, so the alternative was to find it on other sources, but as itunes adds more content in more other regions, this pain is reduced and it becomes the convenient service more and more.

I give that arrangement until your friend realizes he can only shift his content onto 5 devices, at which point his content is lost forever. Or when his hard drive crashes and he realizes he can't re-download tv episodes.

Personally, I value my money too much to spent $100 to "rent" tv shows. My pain point is being able to own the things I buy. Until then, it's bittorrent until the bluray comes out, then buying that.

But this is just a threshold issue. What does the difference in cost have to be for you to rent vs buy. Let's say it's $60 to buy a season of a show on hard media that you can watch as many times you want and yes, you own something that will collect dust for a life time. Perhaps you can resell it, but that just means your initial cost was lower and you in a sense rented it for the difference in price for that time period. Now if the cost to rent is say $20 for a season would that be worth hassle free experience of the content? How about $10, $5? At some threshold the value vs cost starts to make sense.

He absolutely can redownload TV episodes if he bought them from iTunes. Same goes for Music, Apps, Books, but not movies.

That's not a fair characterization of iTunes' restrictions. You can use purchased movies and TV shows on up to five computers, and ten 'associated devices', but Apple TVs don't count towards the ten. The content is never 'lost forever', you can always deregister one or (even if you no longer have access to them) all of your devices to register a new one.

[edit: you can also - although this is fairly recent - redownload an unlimited number of times to registered computers, devices or Apple TVs]

You could not get certain content in canada a while ago

Canadians should be so lucky. You still cannot get most content in most of the world. No Netflix, no Hulu, no Pandora. iTunes has a meagre selection, and that which is eventually released here, comes half-a-year late and overpriced.

I'm Australian, but this experience is shared by most people who live in not-the-US. The content industry still has a world of distribution failings to address before their customer-hostile anti-piracy flailing becomes justified.

While there is a large black market of people pirating content, it is unclear as to whether that market would be willing to enter the legal market at any price point.

Improving the distribution system is not a source of explosive growth, rather, it is I disagree with your assertion that the content industry is requisite for mere survival industry. There's no potential for explosive growth because piracy is an income problem, not an internet problem. Cracking down on file-sharing sites will not solve the problem because the illegal activity merely shifts elsewhere. Improving distribution systems will not solve the problem because free is still cheaper than not-free.

Improving distribution systems will not solve the problem because free is still cheaper than not-free.

I disagree. Yes, there are many people who pirate because they can't or don't want to pay. But I believe there's an equally large group of "casual pirates" who only do it for content that they can't (easily) get otherwise at all.

This latter group may be relatively small in the US because you have a whole range of online content providers (NetFlix et al). But it is definitely huge in europe and other countries where said services are not available or only in crippled form.

I wrote something about this http://kristopolous.blogspot.com/2012/01/why-pirate.html

I understand what you are trying to say, but strongly disagree. iTunes is ridiculously easy to setup and use. Paying cable + DVR box is ridiculously easy to pay for and use. People are just incredibly selfish and feel entitled to free stuff.

A few select services (Netflix, Steam, uhh that's it?) are more convenient than piracy. Piracy rate on a $1 iTunes games is often 50 to 90 percent. It doesn't get any cheaper or easier than that.

You see, I live in country where iTMS is available since maybe two months (Poland). Since then, I've spent some money on music - maybe $20 or $30, but I don't think that really matters - and that was the first time I actually paid for music. Before that, there were few times that local start-ups tried to fill this gap in this market, but they inevitably failed - mainly because they content sucked, but also because it was inconvenient as hell.

You see - that thing is happening all over again with TV Shows and Movies. As far as I know, there's no legal way for me to watch latest episodes of shows that I like. There just isn't. I would be happy to pay $5 or maybe even $10/month and be able to stream HD episodes to my PS3, without having to deal with eztv.it, RSS feeds, rtorrent and all this crap. I really would. But I can't. I simply can't.

Now, for movies it's another thing - I think I can buy/rent movies from iTunes, but they're just too expensive, compared to what movie ticket or DVD costs - Apple (or any digital-media store that I know of, for that matter) doesn't adjust their prices to different markets (hell, they even show prices in Euros, which we don't use!) - and unless something magical happens to our economy, I doubt it'll ever take off over here.

If something is too expensive for you to afford that does not mean you are entitled to receive it for free.

Unless it's digital.

I agree, but that also means you can't consider that as lost money for the legal offer.

Nothing in the original article, my reply, or this entire sub-thread has made that claim or attempted to argue anything of the sort.

Well, except there's lots of content not available on iTunes and friends or only with ridiculous delays. I'm just not waiting 6 months for a movie for no obvious reason when the torrent is a mouse-click away.

When there's no kindle-compatible version of an ebook I want (which sadly happens more often than not) then I grab the torrent.

It may be ignorant and "illegal", but I consider it voting with my wallet.

I can't say I feel bad about it because I happily do buy the content when and if they let me. My first stop for media is always iTunes, amazon and various local eBook sites, and I'm glad every time I don't have to resort to searching a torrent.

I'm sure I'm not the only one with that "shopping strategy".

So you're only willing to spend money when it's convenient. How noble of you. That's not voting with your wallet. That's called being selfish.

Cry me a river, I still call it voting with my wallet.

"I'm just not waiting 6 months for a movie for no obvious reason when the torrent is a mouse-click away."

You could also try really hard and find better things to do with your time. It's just a movie, not dialysis. You won't die if you don't see it RIGHT NOW.

I'm not convinced. Are you sure about that not dying part?

> The answer must be to provide legal services that are at least as convenient as MegaUpload.

One thing that makes this hard in reality is that ANY service where people have to pay means people have to SHOP. Which means they have to make decisions about what entertainment products to buy, and at what price. And since these are "experience goods" you can't judge them until you've paid for them. In my book, that means means this particular type of "shopping" REALLY sucks.

So the fact that "shopping-just-sucks" (and especially for experience goods) is the TRUE friction that any hypothetical as-easy-as-Megaupload services need to overcome. A big draw of Megaupload (I say this never having heard of it before this week) is you can consume whatever you want and there's no downside to a bad choice.

So I'm not sure how any alternative service avoids the Shopping For Entertainment Products Sucks Syndrome unless they get some reasonably-priced all-you-can-eat plan that makes a lot (80%?) of commercial content available under one roof.

Netflix and Hulu are working on that problem. Anyone know why Netflix has such a crappy selection?

Content distributors are maximizing the profit from their products. Licensing them to streaming services before sales from Blu-ray/DVD level off would be lost money. A hit movie BR/DVD release will easily make $5-10 million/week selling half a million or more copies each week. Netflix can barely offer that to license a movie for its millions of subscribers for a year -- they're only charging $8/month per person after all and that has to pay for rights to every movie in the library.

Once they do get to the point where it makes sense to license the movie again, Apple might pay extra for an exclusive so they won't license it to Netflix too, or vice versa. You can expect streaming libraries to suck in certain ways, like time between movie release and streaming rights, for a long long time -- until consumption patterns change on a large scale -- because that's what maximizes profit.

I don't see any reason why media companies don't offer their content on subscription. You wouldn't have to shop then. You just pay your 10 or 15 bucks a month, and you can watch whatever the content provider releases.

"my friend" would be happy to have BBC content on subscription, but all "he" is left to do is use easynews.com subscription for downloading. He would be happy to pay that to the content owner instead. But the content owner doesn't want that.

I think an easy answer to the "shopping sucks" problem is to sell them cheaply. If I can buy one episode of, say, House of Lies for $1, I'll give it a try and if it sucks, it didn't cost enough for me to care. This is more or less what AllofMP3 did, and it was great - the music was cheap enough that I'd happily take the risk of some of it being crap. It's similar to Apple's App Store as well, for that matter.

I think this might be one reason Spotify is so successful.

This isn't a morality tale. This is the story of someone who was willing to pay in either case simply giving his money to the entity that made accessing the content easiest.

When Megaupload disappeared that entity became iTunes. The moral of the story is, if there is one, that the legal services are getting close, but they haven't quite made it yet. There is room for improvement, but reason for hope.

  > And especially if the service pays the uploader
  > based on how popular the stolen content they
  > upload is.

This should be reworded. As I understand it, they weren't limiting payment to only users with stolen content. It's just that the stolen content was probably the most popular.

I'm curious how this affects the overall economy, not just the studios. What would your friend have spent that money on otherwise (obviously a Mega account was a lot cheaper)? Who is now $100 poorer because iTunes+studios are $100 richer?

Hmm, well if the amount spent was the same it comes down who does more with the money. Where does the money go:

megaupload owners - fast cars, hookers and blow

studios - fast cars, hookers and blow

actors - fast cars, hookers and blow

apple - wages for workers in china.

I guess the lesser evil is the studios...at least they are employing local hookers!

You're giving Apple an easy pass... a significant cut goes to the executives.

How are you defining 'a significant cut'?

Via morningstar.com, in 2010 Apple had 65,225,000,000 in revenue.

Total operating expenses for 2010 were $7,299,000,000, just 11.2% of revenue.

Executive compensation was $148,424,291. That is 2/10ths of 1% of revenue. That is just for the the top five execs and Jobs only took $1 in compensation. Still I don't think it is accurate to say that a 'significant' cut of revenue goes to 'the executives'.

the lesser IMHO would be consumer who spent that money on anything else than entertainment, so if it wasnt beer or drugs, then it was better spent money

For many people outside of the US there is no legal alternative. iTunes/Netflix/Hulu/Zune are all very limited in the countries they serve. You can buy music (and apps) almost everywhere but for some reason buying video is limited to only a few countries in Europe.

Similarly, if the internet were banned your friend will buy DVD's.

The lesson learned here is simple. Your friend will pay for the most convenient way to get his movies. The answer for movie studios is to use their resources to create the most convenient way not kill those more convenient than theirs.

Yeah... and if DVDs were banned, he'd buy a VHS tape would he? And if those were banned maybe he'd listen to a eight-track.

>but if the business model of a service is _primarily_ around the sharing of copyrighted content then something should be done.

Something should have been done: Hollywood should have bought Megaupload. It was a working model, they just needed to own it.

And given MU was shut down with existing laws, there is absolutely no need for something like SOPA to shift this pain balance, yet I'm sure we'll here about them again. Much easier to legislate that pain than innovate around it.

Okay, this is one example. I personally don't know any such person. The question is not: "can you come up with an example of the MPAA/RIAA/FBI collusive measures working?" It's: "will it really make any difference overall?"

So I may be a 30 something professional who's resources vs cost point is that I don't need to look for crappy versions of files. My time is much more valuable, but I believe that everyone is not like me. My contention is that if you took a sample of the younger population, or perhaps less affluent population you would find that their pain threshold is at a different time/cost level.

To which one can say SABnzbd + Sick Beard. Not only do you get exactly what you want in desired quality, you have to spend little to no time looking for it, at least as far as TV shows and movies go.

That's right. People who could not afford such content, get it with just a few clicks, for free. And the extra time needed is worth it.

Tell him about getting a usenet account and http://nzb.su and he'll soon be on the track again.