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Embracing Piracy

How to make money from online content, even after it gets loose on third-party websites.
March 27, 2009

Trying to control how articles, videos, and video games spread online could be the definition of a losing battle. One unauthorized video comes down, and two more spring up in its place. But some companies are giving up the fight and looking for ways to embrace the phenomenon of online piracy. They have tools to get money from advertising even when content ends up in unexpected places.

At a recent panel at South by Southwest Interactive, a Web conference in Austin, TX, panelists suggested that the creators of online content need to use the wide distribution of pirated content, instead of trying to stop the piracy. Some companies are doing this by making it easier to use third-party content with permission, while others are working on technologies that can find content wherever it ends up, and sometimes serve ads along with it.

“For every article, we typically find 20 copies around the Web, some full and some partial,” says Rich Pearson, vice president of marketing for Attributor, a company that specializes in identifying text and video that appears online for its customers. After breaking a customer’s content into small chunks, Attributor creates digital fingerprints for each chunk. Its system then crawls the Web and searches for matches for those fingerprints, notifying the owner of the results.

But content creators are already changing their attitudes toward the piracy they discover. Matt Robinson, Attributor’s vice president of business development and partnerships and a speaker at South by Southwest Interactive, noted that, two years ago, most of Attributor’s customers used the technology to serve takedown notices. Today, he said, most are using it to gather statistics on where their content is appearing.

Attributor is addressing the problem in two ways. First, the company is working with online ad networks to share revenue with the owner of any content that appears on an ad-supported site. Attributor is also testing code that attaches ads to articles, no matter where the article appears. A site can grab an article with permission, as long as the code that handles the ads is in place. Robinson noted that there’s still a lot to work out, such as figuring out the minimum amount of compensation that the content creator should accept.

Doug Knopper, cofounder and co-CEO of video-advertising company FreeWheel, says he believes that the key to reducing piracy is increasing the legitimate ways that users can watch videos online. “In the ad-supported world, you actually do want a larger audience, and you want your video to be distributed widely and get the largest viewership,” he says. The trick is to set up wide distribution without losing out on money from advertising. FreeWheel’s technology is embedded in players on websites such as Joost, Veoh, or Blip.tv, and serves ads according to rules set by the owner of the video. Though file-sharing systems such as BitTorrent are often criticized for harboring piracy, Knopper says that such sites could potentially offer ad-supported legal downloads.

Mochi Media, an ad network for game developers, takes the concept a step further. The company’s software automatically serves ads no matter where the content appears, so there’s no need to negotiate a content-sharing deal and agree on terms. “Piracy used to be sad, but now it’s a bonus–it means more distribution,” says Eric Boyd, vice president of engineering. Mochi Media provides customers with code that tracks Flash games to learn what sites they’re on, what country they’re in, and other details. It then uses that data to figure out which ads to serve. Though Boyd says that it’s possible to strip the code out of a game and repackage it ad-free, that requires a fair bit of skill. “Generally, the people stealing content just want good stuff,” he says, and are happy to let the game be as is, as long as they get to use and share it.

Though these companies all acknowledge that it will take more experimentation to figure out how best to share content and still make money from it, they agree that previous attempts to stop the content from being shared, such as digital-rights management technology, haven’t worked. Mochi Media’s Boyd says that finding legitimate ways to share can give individual game developers better control over what they create. “This is a better long-term play,” he says.

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