In many cases, piracy reels in more "fans" -- or potential customers -- which will eventually bring in a profit.
Angry Birds developer Rovio believes that piracy may not be a bad thing after all, and that the media industries can attract new "fans" -- or rather potential paying customers -- by actually embracing those that steal from them. Rovio chief executive Mikael Hed made this revelation during the Midem conference in Cannes on Monday, claiming that fighting pirates is simply "futile."
"Piracy may not be a bad thing: it can get us more business at the end of the day," he said.
But that doesn't mean Rovio won't stand up for its rights. In some cases, the company will pursue pirates through the courts if the products they are selling are harmful yo the Angry Birds brand, or ripping off its fans. Otherwise, Rovio doesn't plan to take the music industry's route by suing everyone under the sun, even those who are dead and buried.
"We have some issues with piracy, not only in apps, but also especially in the consumer products," Hed told the audience. "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."
Hed said the music industry's actions have changed Rovio's view on consumers. Instead of users, they are now fans -- even those who pirate Rovio's popular Angry Birds apps.
"We took something from the music industry, which was to stop treating the customers as users, and start treating them as fans," he said. "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."
Rovio now considers its Angry Birds apps as "channels" instead of games, as consumers are reportedly spending so much time flinging birds with a slingshot, that the apps are actually competing with the most popular TV shows here in the States in terms of time spent. That said, pirated Rovio apps can still make revenue for the company by channeling additional content to those naughty "fans" much like Zynga did with Lady Gaga and Michael Buble in its Facebook games.
"Already our apps are becoming channels, and we can use that channel to cross-promote – to sell further content," he said. "The content itself has transformed into the channel, and the traditional distribution channels are no longer the kingmakers."