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“We think there is a fundamental misconception about piracy. Piracy is almost always a service problem and not a pricing problem. If a pirate offers a product a

“We think there is a fundamental misconception about piracy. Piracy is almost always a service problem and not a pricing problem. If a pirate offers a product anywhere in the world, 24 x 7, purchasable from the convenience of your personal computer, and the legal provider says the product is region-locked, will come to your country 3 months after the US release, and can only be purchased at a brick and mortar store, then the pirate’s service is more valuable.” --Gabe Newell, [0] [0] https://www.escapistmagazine.com/Valves-Gabe-Newell-Says-Piracy-Is-a-Service-Problem/ https://www.escapistmagazine.com/Valves-Gabe-Newell-Says-Pir...

lucasyvas 4y ago
He was right then, and he's still right now.
JTbane 4y ago
This was a big part of why Steam was such a success. You get free updates, online multiplayer, storage of your games, cross-platform support, etc
kmeisthax 4y ago
I absolutely love this comment, but very few creative media actually work like this. Valve is able to create a market where it makes sense to discount older games, which means that people buy more of them, and developers come out ahead. This works because Steam is fixed price pay-per-game - the more games you play, the more money comes out of your pocket and goes to the developers. This is quite possibly the most consumer-friendly business model you could pick where you still get paid for your work. It's tempting to look at Netflix and say, "oh they're stupid, why would they stop being like they were in 2012". The reality is that 2012 Netflix streaming was never going to last. They were dramatically underpricing their subscription because nobody in the TV industry understood streaming[0] and thus underpriced their TV shows. When TV companies realized, "oh no, people are actually cancelling cable to subscribe to Netflix", they started to charge Netflix higher rates... because it turns out the TV business sort of just requires that $100 + ad revenue come out of your pocket every month no matter if the bill collector is called Comcast or Netflix. Sports are like this but worse. Out of that $100+ads that cable costs, the ad revenue pays for the entertainment, and the $100 pays for the sports, because pretty much every sport is far more extravagantly expensive to run than you'd think, and never pays its way for anything[1]. This is also why sports will often have extremely customer-hostile business practices and weird blackout policies - because the audience itself has been sold to other companies who can then force them to pay more money. [0] Remember how there was a writers' strike about a decade and a half ago, over, among other things, streaming royalties? TV execs genuinely thought that Netflix was never really going to take off and replace cable. Just like how the music execs thought downloads were never really going to take off and replace CDs. [1] If you really want to get angry, look up how much money your city is paying in tax credits to your local sports teams.
- revolvingocelot 4y ago
  Note that Newell's comments are from the perspective of the consumer. I, as the consumer, don't care at all about how expensive it is or is not to run a production company or cable channel or streaming service or sports team, I'm assessing quality, ease of access, and price. >because the audience itself has been sold to other companies who can then force them to pay more money Again, don't care. The point is that I, as the consumer, can't pay to watch NHL games in a reasonable way, but the pirate's product is better and free. So! Is it immoral to "steal" from ESPN/NHL in this way? Maybe, but it strikes me as kinda like Mr. Burns setting up a sunshade so as to be able to force everyone to use nuclear power for their lights -- it's a way to try to make money, and aw-shucks things are expensive [0] so they've gotta make money, but it's not going to work terribly well because of the realities of the medium and the consumer's experience. >It's tempting to look at Netflix and say, "oh they're stupid, why would they stop being like they were in 2012" Your straw-reasoner doesn't seem to get that Netflix isn't the owner of the content they're trying to get you to pay money for. Understanding that 2012-Netflix is streaming things they've licensed at rates reasonable to them is key to understanding why modern-Netflix stopped being like they were in 2012 -- the rates are no longer reasonable, so the content gets dropped. In contrast, the NHL is the owner of the content they're trying to get you to pay money for. The NHL could unwind itself from predatory audience-eyeball-deals, just as I, as the consumer, could jump through flaming hoops to get a low-quality legal stream, but neither party wants to do that. So! [0] I'm well aware of the horrifying practice of municipal (and even higher levels of government!) spending on private sports arenas, but I was under the impression that sports teams printed money. https://en.wikipedia.org/wiki/List_of_professional_sports_leagues_by_revenue https://en.wikipedia.org/wiki/List_of_professional_sports_le... suggests I'm not wrong...
  - kmeisthax 4y ago
    Yes, you are correct that the NHL sets the price of the content. And if fans were to lose interest or move to piracy, then Newell's argument would absolutely apply. The problem is that, as it stands, sports fans aren't going to do that. Remember, these are the same kinds of people who shout at city governments to keep subsidizing sports arenas so they don't lose "their team". The NHL has a massive money spigot and they're going to keep it flowing for as long as they can.

lucasyvas 4y ago

He was right then, and he's still right now.

JTbane 4y ago

This was a big part of why Steam was such a success. You get free updates, online multiplayer, storage of your games, cross-platform support, etc

kmeisthax 4y ago

I absolutely love this comment, but very few creative media actually work like this. Valve is able to create a market where it makes sense to discount older games, which means that people buy more of them, and developers come out ahead. This works because Steam is fixed price pay-per-game - the more games you play, the more money comes out of your pocket and goes to the developers. This is quite possibly the most consumer-friendly business model you could pick where you still get paid for your work. It's tempting to look at Netflix and say, "oh they're stupid, why would they stop being like they were in 2012". The reality is that 2012 Netflix streaming was never going to last. They were dramatically underpricing their subscription because nobody in the TV industry understood streaming[0] and thus underpriced their TV shows. When TV companies realized, "oh no, people are actually cancelling cable to subscribe to Netflix", they started to charge Netflix higher rates... because it turns out the TV business sort of just requires that $100 + ad revenue come out of your pocket every month no matter if the bill collector is called Comcast or Netflix. Sports are like this but worse. Out of that $100+ads that cable costs, the ad revenue pays for the entertainment, and the $100 pays for the sports, because pretty much every sport is far more extravagantly expensive to run than you'd think, and never pays its way for anything[1]. This is also why sports will often have extremely customer-hostile business practices and weird blackout policies - because the audience itself has been sold to other companies who can then force them to pay more money. [0] Remember how there was a writers' strike about a decade and a half ago, over, among other things, streaming royalties? TV execs genuinely thought that Netflix was never really going to take off and replace cable. Just like how the music execs thought downloads were never really going to take off and replace CDs. [1] If you really want to get angry, look up how much money your city is paying in tax credits to your local sports teams.

revolvingocelot 4y ago
Note that Newell's comments are from the perspective of the consumer. I, as the consumer, don't care at all about how expensive it is or is not to run a production company or cable channel or streaming service or sports team, I'm assessing quality, ease of access, and price. >because the audience itself has been sold to other companies who can then force them to pay more money Again, don't care. The point is that I, as the consumer, can't pay to watch NHL games in a reasonable way, but the pirate's product is better and free. So! Is it immoral to "steal" from ESPN/NHL in this way? Maybe, but it strikes me as kinda like Mr. Burns setting up a sunshade so as to be able to force everyone to use nuclear power for their lights -- it's a way to try to make money, and aw-shucks things are expensive [0] so they've gotta make money, but it's not going to work terribly well because of the realities of the medium and the consumer's experience. >It's tempting to look at Netflix and say, "oh they're stupid, why would they stop being like they were in 2012" Your straw-reasoner doesn't seem to get that Netflix isn't the owner of the content they're trying to get you to pay money for. Understanding that 2012-Netflix is streaming things they've licensed at rates reasonable to them is key to understanding why modern-Netflix stopped being like they were in 2012 -- the rates are no longer reasonable, so the content gets dropped. In contrast, the NHL is the owner of the content they're trying to get you to pay money for. The NHL could unwind itself from predatory audience-eyeball-deals, just as I, as the consumer, could jump through flaming hoops to get a low-quality legal stream, but neither party wants to do that. So! [0] I'm well aware of the horrifying practice of municipal (and even higher levels of government!) spending on private sports arenas, but I was under the impression that sports teams printed money. https://en.wikipedia.org/wiki/List_of_professional_sports_leagues_by_revenue https://en.wikipedia.org/wiki/List_of_professional_sports_le... suggests I'm not wrong...
- kmeisthax 4y ago
  Yes, you are correct that the NHL sets the price of the content. And if fans were to lose interest or move to piracy, then Newell's argument would absolutely apply. The problem is that, as it stands, sports fans aren't going to do that. Remember, these are the same kinds of people who shout at city governments to keep subsidizing sports arenas so they don't lose "their team". The NHL has a massive money spigot and they're going to keep it flowing for as long as they can.