Will Copyright Holders Lose the Pirate Booty?

OPINION: The April 16 guilty verdict in The Pirate Bay case isn't as good for content owners and distributors as they might think. For all piracy's many faults, there can be marketing opportunities as fans rush to download a movie or TV show only later to pay to watch it. Piracy isn't good. It's just not all bad.

Friday's guilty verdict in the Pirate Bay trial should surprise no one. But that doesn't mean justice was served. My colleague Larry Seltzer says, "Lock 'em up." He's a security guy, and Torrents are notorious for spreading malware. Of course, he would praise the verdict. Not I. For all those copyright holders slapping one another's backs in congratulations, I want to slap you across the face. Prosecuting Pirate Bay and services like it will kill the golden goose. You lose by winning.

Hollywood and record labels are beaucoup crazy about piracy and trading of stuff online. I understand that content owners want to get paid for the work they distribute. But there's evidence that many people stealing eventually will buy-or watch-anyway. File trading isn't just about free distribution of copyrighted content without permission. It's a form of marketing that too few content distributors have tapped into. Not all of them are clueless. Whether or not executives will admit it, NBC Universal learned the value of BitTorrent from file trading of new "Battlestar Galactica" episodes in autumn 2004. NBC Universal owns Sci Fi Channel and it is partner with Fox in year-old legal file streaming site Hulu.

Before YouTube, There Was Galactica

A May 2005 Mindjack Story, "Piracy is Good?: How 'Battlestar Galactica' Killed Broadcast TV," explains how file trading helped the then fledging Sci Fi series. The first episode in the reimaged series aired in the U.K. on Oct. 18, 2004, but not in the United States until Jan. 14, 2005. American BSG fans were anxious to see the series, and their British counterparts obliged by uploading Torrents of premiere episode "33" within a few hours of airing. Other episodes followed similar pattern. BSG fans here got a three-month lead on U.S. television.

"While you might assume the Sci Fi Channel saw a significant drop-off in viewership as a result of this piracy, it appears to have had the reverse effect: The series is so good that the few tens of thousands of people who watched downloaded versions told their friends to tune in on Jan. 14, and see for themselves," wrote MindJack's Mark Pesce. "From its premiere, 'Battlestar Galactica' has been the most popular program ever to air on the Sci Fi Channel."

Pesce asserted: "BitTorrent creates the conditions for something I've termed 'hyperdistribution'-a distribution channel which is even more efficient than broadcasting."

Interestingly, Sci Fi got into the action by offering select episodes for full-length streaming, including Season 1 finale "Pegasus" and later "Scar" and "Lay Down Your Burdens, Part 2." Sci Fi's approach of streaming some episodes was highly unusual for early 2005; pretty much nobody was doing it. The world of online video viewing was very different then. There was no YouTube when "33" hit the Torrents. YouTube emerged as a concept in February 2005; the first video was uploaded about two months later. Nor could people buy TV shows from Apple's iTunes Store, which didn't offer programs for sale until October 2005.

Sci Fi upped the online engagement, by offering "Webisodes" that ran between BSG seasons. Later BSG producers spun off storylines and characters into Webisodes separate from the TV show's main plotlines. The practice engaged fans, rather than alienate them-all starting from BSG episode piracy in October 2004. The network could have treated piracy as lost revenue, but instead chose to embrace it as a marketing opportunity. Sci Fi even trumped the pirates by offering more high-quality episodes streamed for free.