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---- Why piracy is good ----
Piracy is the new consumer ΓΓé¼╦£speakΓΓé¼Γäó and ΓΓé¼╦£doΓΓé¼Γäó, and itΓΓé¼Γäós here to stay. Like it or not, piracy or not, music and all forms of entertainment is going to be zapped all over the world without any restrictions. ItΓΓé¼Γäós the job of the industry to capitalize on it rather than squander it away.
This is what is good about Piracy and the Pirates behind it and where value possibly lies:
* Piracy creates economies of scale-
Distribution by agencies and companies is history. Consumers distribute content amongst themselves ΓΓé¼ΓÇ£ leading to almost tsunami like waves of consumption and distribution. So, in effect, the cost of digital entertainment is actually reduced, thanks to the non-hired help.
Creators can price their wares very aggressively given this new economic dynamic.
* Piracy creates democracy-
ItΓΓé¼Γäós no longer a chance meeting with a music czar or a gaze by a producer at a bar that creates stars today. Digital distribution is the ΓΓé¼╦£lowest common denominatorΓΓé¼Γäó that anyone with creativity gets noticed and famous. Pirates are the best advertising agents out there. And they come for free.
The stars in the making need to partner with this global tide rather than fight it.
* Piracy creates innovation-
The big gaming-console companies did not succeed in markets like China due to rampant piracy. Their game CDs were copied and sold in the black market. They felt cheated and held back. That created a massive vacuum in the market that was filled by the online game companies that created games that were meant only for the browser that required subscriptions and virtual goods purchases. This was the stepping-stone to games like Farmville and Mafia Wars.
How to win
ItΓΓé¼Γäós painful to be robbed of whatΓΓé¼Γäós yours. Yet if one thinks beyond the hurt, there may be a bigger opportunity out there.
* Upcoming artists now make more money from concerts and live appearances than selling CDs. Pirate marketing is the new currency of value. They tell fans about new bands without spends on ads. Pirates can be the new career launchers.
* ShouldnΓΓé¼Γäót the big music companies still create a competitor to the iPod and iTunes?
* Make everyone in the eco-system win. Our secret sauce to leverage piracy was something called ΓΓé¼╦£inviziadsΓΓé¼Γäó ΓΓé¼ΓÇ£ we placed invisible ads in our games that went with our games when the pirates took them. These ads automatically become visible on pirate websites. The interesting concept is that the content remains pristine. The consumer wins (gets content without paying), the pirates win (become popular thanks to evergreen content) and we win (thanks to the ads in the content).
The next battle starts when the e-book readers like the Kindle begin to get high penetration. Original books, new and old, will begin getting zapped across friends and families. Authors, publishers and booksellers will be on the receiving end of the tsunami ΓΓé¼ΓÇ£ they will not be paid in this round. LetΓΓé¼Γäós see how many of them try and fight the flood and drown vs. those who swim with the tide and survive and win with innovation.