Free-riding and success: a complex relationship

More news about the direct correlation between economic success and free-riding: the CEO of HBO, Richard Pepler, says that the fact that the passwords used to access its service HBO Go are sometimes shared by several users “is not a major issue”, and is also a terrific marketing vehicle. Yes, giving away all that bandwidth to users who do not pay for an HBO account but have simply borrowed a friend’s password is obviously something that costs money. But even so, it’s worth it, because, using Mr. Pepler’s own words,

“it presents the brand to more and more people and gives them an opportunity, hopefully, to become addicted to it”.

Game of Thrones, a series also created for HBO, is a good example of a product whose viewers via irregular channels far exceed those who watch it on the television. As the makers admit, they owe a large part of the success of the series to downloads: the CEO of Time-Warner, Jeff Bewkes, describes the series’ irregular viewing figures as “better than an Emmy”.

And where are the best and most trustworthy lists of the most popular films to be found? In the section that TorrentFreak dedicates each week to the most-downloaded films. What’s more, if we look at what games developers are up to, we see that reviews generated by downloaders are the best indicator of success and popularity.

What is really worrying Samsung about its smartwatch, the Galaxy Gear: the fact that it is not being counterfeited in China. If we were to ask the company, it is very likely that it would prefer it if every time you visited the marketplaces of Shanghai, hundreds of sellers were incessantly repeating their mantra, “cheaper for you,” and waving counterfeited copies of the Gear in front of your eyes.

Let’s not kid ourselves: comparing the sale of a copy of a luxury brand handbag with the value of the original makes no sense, especially when we know that the person who has bought it would never be able to afford to do so at the real price. Every time you hear some numbskull comparing copies with lost sales, stop reading or change the channel. Yes, copies cost brands money, but they are also a clear indicator of the success of their product. The real problem these brands face is when they launch a product and nobody is interested in copying it.

Each day produces further evidence that free riding is an integral part of success in an increasingly digitalized economy, a parameter that it has a bidirectional relationship and needs to be managed with common sense. Pursuing those who make money by copying other people’s ideas without paying them is not the same thing as shutting our common sense away in a drawer, as some have been doing since the 1990s.

We desperately need to overhaul the law on intellectual property right. But for the moment we can start by studying how those who understand the concept and know how to use it to their advantage are thriving in their respective industries. Every day, competitors with an outdated view of the world are seeing how “the enemy” coming out with annoying comments is no longer a blogger or an analyst, but industry or professional colleagues who understand this phenomenon and who, as a result, end up making more money and being perceived as more understanding than them.

(En español, aquí)