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Rovio CEO Mikael Hed  (Source: arabianbusiness.com)
Rovio CEO Mikael Hed said piracy can create a larger fanbase

With big media groups like the Recording Industry Association of America (RIAA) and the Motion Picture Association of America crusading against piracy via the anti-piracy bills flying around as of late, it seems odd to hear anyone say that the act of piracy could be a good thing -- but Rovio dared to say so.

Angry Birds creator Rovio criticized the music industry's approach to piracy recently at the Midem conference in Cannes. Rovio CEO Mikael Hed said his company has learned a lot about how not to handle piracy through the music industry's actions.

"We have some issues with piracy, not only in apps, but also especially in the consumer products," said Hed. "There is tons and tons of merchandise out there, especially in Asia, which is not officially licensed products. We could learn a lot from the music industry, and the rather terrible ways the music industry has tried to combat piracy."

The recording industry has certainly made some bold moves in the past in the name of piracy. For instance, the RIAA scored $105 million USD last March from Limewire, which it attacked for piracy.

While Hed thinks that piracy can be harmful if it rips off fans or somehow hurts the Angry Birds brand, fighting piracy the way the music industry has seems to be ticking consumers off more than getting them to jump onboard. In fact, Hed even said that piracy can be a good thing at times. For instance, Rovio may not make any money off of products that are not officially licensed, but it spreads the word in regards to the product and creates a larger fanbase, which is what really counts.

"Piracy may not be a bad thing -- it can get us more business at the end of the day," said Hed. "We took something from the music industry, which was to stop treating the customers as users, and start treating them as fans. We do that today -- we talk about how many fans we have. If we lose that fanbase, our business is done, but if we can grow that fanbase, our business will grow."

It seems Rovio's Angry Birds already has a healthy fanbase. Last November, Rovio announced that it hit 500 million downloads. By that time, it had already launched merchandise like plush toys and T-shirts, where a million of each were selling on a monthly basis as of September 2011. Rovio also struck film deals and planned its first Angry Birds retail store in Helsinki.

Also, last March, Rovio's Peter Vesterbacka proclaimed that console games were dying in favor of mobile games like Angry Birds.

Despite Rovio's criticism of the music industry, Hed also noted at the conference that his company may be getting chummy with a few of those associated with the industry. More specifically, Angry Birds might be getting a soundtrack if deals are struck with music companies.

"We have some discussions with labels about what we could do together to give access," said Hed. "It is possible to promote music content through our apps as well...we are positively looking for new partnerships, and we have a rather big team working on partnerships, so it's just a case of getting in touch with us and we'll take it from there."

Sources: The Guardian, SlashGear



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Now...
By xenol on 1/31/2012 1:39:37 PM , Rating: 5
If only the rest of the entertainment industry could see its customer base like this. They don't realize that not everyone who pirates is a dirty scumbag who doesn't care. That accounts for a small subset of those who pirate. The rest just don't want to risk spending all that money for what could amount to crap.

Also, sell tangible merchandise at affordable prices. It's harder to pirate feelies than it is 0s and 1s.




RE: Now...
By augiem on 1/31/2012 2:40:06 PM , Rating: 4
quote:
It's harder to pirate feelies than it is 0s and 1s.


Not for China.


RE: Now...
By someguy123 on 1/31/2012 5:38:26 PM , Rating: 2
It's easy to see this point of view when your revenue stream comes from ads/datamining/plushies rather than unit sales.

Don't pretend like these guys are in it for the public. You can't expect every game to be 2$ or free and based off ad revenue.


RE: Now...
By Keeir on 1/31/2012 6:52:26 PM , Rating: 2
Errr... than maybe other industries/companies ought to look at better ordering their businesses for the market.

Although there will likely alway be a market for the 60 dollar + polished game for sale in the millions of units, to me the meat of the market has moved away from this type of consumption (or grown away from it...) when a maker of FREE games is valued in the billions. Hopefully most in the video game industry understand that trying to force things to be the way they were 20 years ago is not going to work... piracy is just one facet, though an easy one to point to and make a big deal of...


RE: Now...
By StevoLincolnite on 1/31/2012 7:15:46 PM , Rating: 3
quote:
. Hopefully most in the video game industry understand that trying to force things to be the way they were 20 years ago is not going to work... piracy is just one facet, though an easy one to point to and make a big deal of...


I wish the video game industry would go back 20 years.
No DRM at all.

I tire of having my legitimate purchases screwing me over because of DRM, buy a game install another game manager and then you have to register for a couple of services.
Then you need to be constantly connected to the internet...

And hope that nothing conflicts or breaks.

It's like that crap HDCP protection, I'm unable to play Blu-Rays on my 47" LED television because it doesn't support it. No Blu-Rays for me unless I buy a new TV.
Can't even play them on my computer because the screens aren't HDCP compliant unless I use a program to crack the HDCP copy protection.

If companies wonder why Pirates exist, they should take a long hard look at themselves, they do nothing but make a consumers purchase/life harder while the Pirates off enjoying it happily with none of the hassles.


RE: Now...
By Reclaimer77 on 1/31/2012 7:22:26 PM , Rating: 2
I've never heard of an HDTV with HDMI ports that didn't support HDCP. Especially one as new as a big LED set. Are you serious? That sucks! What brand and model plz, if it's not too personal. I just want to make sure I never buy that one.


RE: Now...
By Makaveli on 1/31/2012 7:48:40 PM , Rating: 2
ya i'm calling shens on that guys post.

You have a 47' LED therefore its newer than LCD and it has no HDCP?

Please provide a link to what you bought??


RE: Now...
By Reclaimer77 on 1/31/2012 8:07:06 PM , Rating: 2
Well I found this Samsung LED set having that issue, but it's from a defective part and was fixed free.

I'm NOT calling him a liar. But I'm just trying to wrap my head around the idea of a new set NOT supporting HDCP but having HDMI ports. That makes no sense and I've never heard of that. Ever.


RE: Now...
By erodth83 on 1/31/2012 8:10:50 PM , Rating: 2
I bet he bought a "pirated" $3 HDMI cable from China that doesn't allow HDCP pass-through. He needs to upgrade to one of the $6 knock-offs.


RE: Now...
By Reclaimer77 on 1/31/2012 8:45:21 PM , Rating: 2
Hmmm could be. I dunno. I buy all my cables from www.monoprice.com and they're pretty damn cheap, but all work great.


RE: Now...
By theapparition on 2/1/2012 4:35:53 AM , Rating: 3
Keep in mind Steve is from Australia.

I've never heard of anything that new not supporting HDCP, but it's also quite possible its a regional issue, kind of like how DVDs where region encoded.


RE: Now...
By StevoLincolnite on 1/31/2012 8:45:01 PM , Rating: 3
It's a Samsung, one of the early LED panels that I got in late 2009.

The sad part with HDCP is that all the sofware and hardware along the chain starting from the Blu-Ray player to the TV all has to support HDCP, if one them doesn't, then it ain't going to play.

It's compounded by the fact there is multiple versions of HDCP to.


RE: Now...
By Reclaimer77 on 1/31/2012 8:47:59 PM , Rating: 2
I think you have a bad part dude. Samsung needs to fix it. It's not an HDCP issue. See if this helps:

http://tiny.cc/gxjzv

I had to 'tiny' the URL because DT's spam filter got pissed.


RE: Now...
By tecknurd on 2/1/2012 2:12:04 AM , Rating: 2
I agree. All the protection mechanisms deter me away from buying a movie and application. Buying and then watching a movie is not fun anymore. The protections tests my patience and wastes my day or night trying watch a damn movie THAT I BOUGHT FOR CRYING OUT LOUD. I am also complaining about DVD because some studios think it is good idea to put some corrupted sectors on it making the movie skip.


RE: Now...
By someguy123 on 2/1/2012 12:26:48 AM , Rating: 2
Company value doesn't directly reflect income. You're also talking about a handful of behemoth adrevenue games like farmville and angry birds generating a bulk of the total "free game" income.

would you really want the conventional games market to move towards adbased revenue? all games shifting to angry birds, or sitcom-like demographic targeting? The people complaining about piracy may not be correct in saying that it steals sales, but I really don't see the point in someone who doesn't rely on product sales promoting piracy.


RE: Now...
By Nyu on 2/1/2012 1:21:26 AM , Rating: 2
quote:
They don't realize that not everyone who pirates is a dirty scumbag who doesn't care.


Of course they know that, but they also realize they can make extra money with lawsuits and threats by bribing the judges and co. and abusing the their power.


RE: Now...
By Just Tom on 2/1/2012 4:44:02 AM , Rating: 2
quote:
The rest just don't want to risk spending all that money for what could amount to crap.


If it is crap why do you need it? With music you can hear every song before you purchase it, there is no need to pirate to avoid 'crap'. People do not spend the money because they can get something free with very little risk of consequences. People pirate for the same reason people loot during riots, cause they can.


RE: Now...
By Motoman on 2/1/2012 3:41:50 PM , Rating: 2
Yes. Because they can. And if they couldn't...they wouldn't care.

Because they can, they download "crap" that they barely have any interest in, or even just so they can say they have it (like the buttloads of people who download PS and realize they have no idea how to use it).

If the stuff wasn't available via a torrent, for essentially no effort, they wouldn't put the slightest effort (or funds) into obtaining the "crap" otherwise. They'd not care in the slightest.


RE: Now...
By Motoman on 2/1/2012 12:13:48 PM , Rating: 1
Well, there's a totally different thing going on between someone downloading an illicit copy of Photoshop from a torrent site, and a toymaker manufacturing counterfeit Angry Birds plushies and selling them at retail to the general public.

Granted that the toymaker is making a profit, that profit well and truly is profit that Rovio should have gotten - if someone wants an AB plushie, they will buy one...and may not be cognizant of whether or not the AB toy they bought was counterfeit or not. That's a lost sale for Rovio, and illicit gain for the toymaker.

When a college kid downloads Photoshop from a torrent site, Adobe lost nothing...since said college kid is never going to plump up $500 to buy PS at retail. And no one made an illicit profit from it either, since he didn't pay someone for it.

Online piracy costs publishers essentially nothing. Selling counterfeit physical goods to consumers is a totally different beast.


RE: Now...
By Just Tom on 2/1/2012 1:04:51 PM , Rating: 2
Your logic is a little faulty. It assumes everyone with a pirated copy of Photoshop would not have purchased a legitmate copy. That is far from true. You also forget the lost sales of lower costs alternatives for those people who need a photo editing program but cannot justify spending for Photoshop. Some of those who pirate would have bought Photoshop, some would have bought cheaper alternatives, and some would have done wothout or used free alternatives. It is as simplistic to say that piracy does not lead to ANY lost sales as it is to say every pirated copy is a lost sale.

Any college kid who pays $500 for Photoshop is probably too dumb to pirate. You can walk into any college bookstore in the US and find it for less than $200 or you buy it direct from Adobe for $199. Why would any college student pay $500 for retail when she can save $300 by buying an identical academic copy?

Rovio does not lose out on every sale of counterfit goods,simply because the counterfit goods are usually cheaper or available in places the licensed product is not.


RE: Now...
By Onimuto on 2/1/2012 1:18:55 PM , Rating: 1
Those prices are low. And yes there are extremly watered down versions for $199 at best buy.
Photo shop extended the full version is $999
Hell you can get gimp shop which is way better then the watered downversions of photoshop extended


RE: Now...
By Just Tom on 2/1/2012 2:12:28 PM , Rating: 2
The academic version is the full version. And the price is $199. The only difference between the academic version and the retail version is you cannot re-sell the academic version.


RE: Now...
By Motoman on 2/1/2012 1:40:19 PM , Rating: 2
Make up whatever price you want...the reality is that whether it's $200 or $1,000, the point is the same. People who get pirated copies of PS are not going to be candidates to buy it...at all. If it wasn't available in pirated form, they'd do without or use something else (like Paint.net or GIMP, just to point out a couple free alternatives).

If there is any % of all of that PS-pirating group that *would have* actually gone out and bought a copy if it wasn't available pirated, it's a vanishingly small %. Statistically insignificant.

And Rovio does lose out on those counterfeit goods...if they're not present in the local market then the legitimate buyer could have ordered them online. If the counterfeit product is cheaper, that's beside the point...you have a consumer willing to pay money for a product and they're being presented with a counterfeit instead of the licensed product - the consumer may not even know that. And if the licensed product was all that was available at, say, $20, whereas the counterfeit items that sell for $10 weren't around anyway...they're going to buy the licensed product if that's what they want. These consumers aren't like online pirates - they're not looking for something for free. They're soccer moms who are being berated by their kids who want an AB toy, and they're going to buy one.


RE: Now...
By Just Tom on 2/1/2012 2:13:43 PM , Rating: 2
Actually you were the one who made up the price not I, the price I gave is accurate.

You did not address a single point I made, you are still welcome to do so though.

The fact is piracy DOES have an economic impact. It leads to lost sales of both premium and less expense alternatives. No, not every person who pirates software would have bought that software but some would have. And some would have bought less expensive alternatives. You are not honestly arguing that piracys leads to NO lost sales?

And I did not say Rovio did not lose out on counterfit sales. I said every sale of a counterfit product did not mean a lost Rovio sale. Some people will not pay Rovio's asking price but will pay the price for a knockoff. The same effect happens with fake Gucci handbags.

quote:
And if the licensed product was all that was available at, say, $20, whereas the counterfeit items that sell for $10 weren't around anyway...they're going to buy the licensed product if that's what they want.


No, no,no. SOME of them will pay the extra 10 dollars. Some will not, because an angry bird plushie is worth 10 dollars to them but not 20. This is pretty basic first semester economics. Rovio loses sales to counterfeiters but not on a one to one basis.

quote:
If there is any % of all of that PS-pirating group that *would have* actually gone out and bought a copy if it wasn't available pirated, it's a vanishingly small %. Statistically insignificant.


Oh, you did a study? You might be right but so what? I never argued otherwise.

quote:
These consumers aren't like online pirates - they're not looking for something for free. They're soccer moms who are being berated by their kids who want an AB toy, and they're going to buy one.


I never compared them to online pirates,so I am unsure what your point is. And I am impressed by your market research into the demographic of the Angry Bird marketplace. However, you're still wrong. Not everyone who purchases a counterfeited Angry Bird toy would have purchased a legitimate one. Demand always decreases when costs rise, and there are costs involved in purhasing legit licensed products.


RE: Now...
By Motoman on 2/1/2012 3:37:41 PM , Rating: 2
Oh FFS...

Yes, I did just make up the $500 price point...and didn't claim otherwise. The point is that it doesn't matter what the acutal price is...whether it's $100 or $1,000. Ergo, put the price wherever you want it to be, and the argument stands.

And to further re-address every point you made, which I addressed before but apparently you missed it...

I admitted that online piracy has some economic impact - but I'm asserting that it's statistically insignificant. If you want to stamp your feet and demand a full double-blind study, you just go right on and do that. Or, you could open your eyes and look at who's actually pirating what, and realize that it's absolute nonsense to assert that essentially any of that which is going on is "lost sales." I don't need a peer-reviewed study to believe someone who tells me that women buy more thong underwear than men...I can figure that out on my own.

As for the $20 vs. $10 argument on a toy, you're missing 2 points. Firstly, if someone goes for a $10 counterfeit, the counterfeiter is illegally profiting off of Rovio's IP - which doesn't happen in online pirating. There's a clear and demonstrable issue there of that $10 being due to Rovio. And if knockoffs aren't available at $10, and the buyer won't spend $20 for the real thing, then Rovio didn't lose anything - the buyer wasn't a prospect to pay the price they waned for the product in the first place...and also no one else illicitly profited by selling a knockoff.

Sorry you have such a hard time with reality. Maybe turn your iPod down.


RE: Now...
By Just Tom on 2/1/2012 4:46:06 PM , Rating: 2
Actually I don't own an iPod. But thanks for the advice.

quote:
I admitted that online piracy has some economic impact - but I'm asserting that it's statistically insignificant.


And Adobe says the cost of piracy is significant. As does Microsoft. And damn near every other software manufacturer in existence. But because Motoman said otherwise it is true. Maybe you should open your eyes and realize piracy is not a victimless crime. You might not like the victim but there is still economic harm done.Industry groups put the number at almost $60B, a number probably as far from the mark as your statistically insignificant estimate.

quote:
As for the $20 vs. $10 argument on a toy, you're missing 2 points. Firstly, if someone goes for a $10 counterfeit, the counterfeiter is illegally profiting off of Rovio's IP - which doesn't happen in online pirating. quote>

Lots of people profit by selling pirated software. I can find with little trouble vendors that sell hacked and cracked versions of anything. And anyone who uses illegally downloaded software is indeed profiting from off the software maker's IP. Your point is valid only if the software is never used.

quote:
There's a clear and demonstrable issue there of that $10 being due to Rovio. And if knockoffs aren't available at $10, and the buyer won't spend $20 for the real thing, then Rovio didn't lose anything - the buyer wasn't a prospect to pay the price they waned for the product in the first place...and also no one else illicitly profited by selling a knockoff.</


Yes, I said, more than once, that there are customers who would buy the knockoff that would not buy the legit product. You were the one that said every knockoff sale was a lost sale to Rovio. But why is Rovio due money for violation of its IP for sales that never would have occured yet software makers are not? Simply because it is a tangible item? I can see merit in your argument, although I'd still disagree, in the case of software collectors who simply download everything and never use it. But someone who does use the software is indeed profiting from the IP illegally, because it is allowing him to perform tasks he would not be able to do, or only be able to do more difficultly.

Illegally downloaded software is either not used or it is used. Whenever it is used there is economic harm, because either that software is not paid for or cheaper alternatives are not purchased. People who use illegal software are profiting of someone else's IP just as someone who purchases a knockoff Angry Bird doll.


RE: Now...
By Motoman on 2/1/2012 8:22:11 PM , Rating: 1
quote:
And Adobe says the cost of piracy is significant. As does Microsoft. And damn near every other software manufacturer in existence. But because Motoman said otherwise it is true. Maybe you should open your eyes and realize piracy is not a victimless crime. You might not like the victim but there is still economic harm done.Industry groups put the number at almost $60B, a number probably as far from the mark as your statistically insignificant estimate.


K, you've lost it. RJR said smoking was just fine too. The Navy says their sonar doesn't bother whales. So on and so forth... OF COURSE they're going to say they're losing massive amounts of money. But the common-sense view of the world clearly demonstrates that they're wrong. It takes only the teensiest bit of brain power to look around and realize that they are utterly full of BS. The fact that you're even bringing up their assertions is pathetic...and it's very, very sad that they have uncritical people like you shilling their BS for them.


RE: Now...
By Onimuto on 2/1/2012 1:13:06 PM , Rating: 2
Photoshop is $999
And if they need photo shop chances are they might need a
Movie editor like after effects another $999
Hell the master cs is $2,499


RE: Now...
By Motoman on 2/1/2012 1:42:43 PM , Rating: 2
The point stands either way. The actual retail price involved is pretty irrelevant...the people getting pirated copies of PS are *not* candidates to pay for a legitimate license.

Regardless of what the retail price is, if they can't get PS via a torrent, they're going to be perfectly happy doing without, or using something that's naturally free like Paint.net or GIMP.

The *vast* majority of people who download PS, I'd wager, don't even know what to do with it and never even use it. But they can say "dude, I got PS!." And then use Office Photo Manager to remove the redeye from their cell phone pics.


Isn't Angry Birds free?
By quiksilvr on 1/31/2012 2:05:23 PM , Rating: 2
I thought their revenue came from ads. I mean, I turn off my WiFi/3G when playing to avoid that but I'm pretty sure most don't.




RE: Isn't Angry Birds free?
By augiem on 1/31/2012 2:39:21 PM , Rating: 2
Depends on the platform. Android, all 3 versions are free. WebOS regular is free, Seasons and Rio are $2. Don't know about iOS. Regardless, the bulk of their revenue comes from merchandising. The game hardly scratches the surface. I saw recently they were selling $1 million / month in plush dolls alone.

I can see this as being one of the future trends for gaming. With prices this ridiculously low, companies are scrambling to the alternative business models like fremium and adware. The public wants it all for nothing and the companies are happy to oblige as long as they can find another way to make the profit. Personally, I hate the trend as the business model dictates the game design.


RE: Isn't Angry Birds free?
By augiem on 1/31/2012 2:40:55 PM , Rating: 2
CORRECTION: 1 Million DOLLS, not dollars. Dolls are between $12-$50 each generally.


RE: Isn't Angry Birds free?
By Kefner on 1/31/2012 4:18:08 PM , Rating: 2
Just checked, $2.99 on Windows Phone Live version


RE: Isn't Angry Birds free?
By theapparition on 2/1/2012 4:37:40 AM , Rating: 2
You can get ad free paid versions on Amazon app store.

Well worth the price of $.99 each to get rid of the ads.


RE: Isn't Angry Birds free?
By kattanna on 1/31/2012 4:14:39 PM , Rating: 1
yep. so its kinda hard to pirate free..


Smart guy
By masamasa on 1/31/2012 3:51:52 PM , Rating: 4
Too bad there aren't more intelligent CEOs like him.




Hey!
By Ammohunt on 1/31/2012 4:16:18 PM , Rating: 2
Pirates need software too! arrrr. Its those damn Ninjas that are causing all the grief.




Robbing banks...
By wordsworm on 1/31/2012 10:37:54 PM , Rating: 2
probably stimulates the economy. Instead of that fat cat's money sitting in a vault somewhere, it's getting out and about, being spent on luxury items, homes, cars, etc. It doesn't mean that robbing from banks is morally correct.




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