The Cold Hard Truth: Not Everyone is a Customer
One of the biggest arguments that anti-piracy supporters always mention is the amount of people downloading the content. It is true that there are tons of people pirating but it has to be seen that not everyone would actually pay for the content anyway. Some of these people simply find it convenient to search for a file and download it or others would never pay for the content because they don't see the value in it. If piracy is somehow prevented, some would probably simply live without these free things. If you want to make money off your product, you have to realize that you should market to those potential customers.
There will always be ways to pirate content. Some people make it seem that it is a new concept but it is not. Since the days of floppy disks, cassette, VHS, beta max and other forms of distribution, there has always been ways to duplicate it. Even with modern technology, there are still ways to make copies of content. You just have accept that it will probably always happen. In the technology industry, there is nothing really "hack-proof".
On a side note, there is also culture involved in piracy. In third-world countries it is just too common to see street vendors selling disks worth of pirated content and growing up to buying such. Again, some of these people would not pay for the content (50 cents a disk vs $5 dollars a movie) but some of the ways described further below could also work. The trick is too turn people to paying customers.
On another side note, I feel older than I should be knowing all those old technology :c
The Advantages of Piracy to the Consumer
Before trying to solve a problem, you have to find the problem. To beat piracy, you have to understand first what are the reasons people pirate. The most obvious reason for pirating is price and you just can't beat free. The second reason for pirating is (again) convenience. To download a particular content, you search for it in the torrent/file-sharing site, download and enjoy. Knowing these factors along with an understanding of customers is crucial in developing ways to make profit off content without needing to stop piracy.
|Image says it all. [Source](http://torrentfreak.com/anti-drm-t-shirt-designs-vote-now/)
Again, in the tech industry, nothing really is "hack-proof". There will probably always be skilled people who can disable forms of DRM and there lies the problem. I will refer to games and software as examples because what I encounter most of the time. When you download something off torrents, it will have the DRM measures taken care off. You don't have to worry about having to always be online to play your game or use your software or even deal with other limitations that DRM brings. For people who payed for the software, they are the ones who have to deal with DRM.
Let's take the game Assassins Creed 2 for the PC as example (at the time of release had a new DRM measure). The DRM in the game forces you to always be online for a non-online game (single player). The problem here is that if you downloaded the game via torrents, you didn't have to deal with this. You could freely play your game anytime. The paying customers can't. See the problem? You're punishing people who pay for your stuff.
Correct Answer: Apple iTunes, Valve Steam
Before diving into some factors on how some companies have made money off content even with piracy, it would be a good idea to give some examples. Apple iTunes is an online store where you could purchase movies, music or apps whether on your computer or iDevice. Valve Steam is similar but focuses on providing PC and Mac games. There are other similar companies but these two are some of the most famous. They have made money off content even with widespread piracy. They have shown that it is possible and highly profitable.
|Irrelevant picture referring to [this](http://hyperboleandahalf.blogspot.com/2010/04/alot-is-better-than-you-at-everything.html).
What if I downloaded it off a torrent? After it's done, I just play it. Nothing to go through. Nothing that hinders someone from their content. Downloading something is maddeningly easier and more usable.
To beat piracy you have to offer the same level of convenience to the user. Apple iTunes is a good example. Yes, you have to install the software but if you're using it to manage your iDevice then it's already part of software you regularly use. You don't need to install something you're hardly ever going to use. Once logged in and in the store, simple click buy on something you like and it's there. Play it on your devices. It's also stored along with your other movies, play it again when browsing your library. It's convenient.
Offer convenience to a customer (along with good customer service) and you could easily create a loyal fan of your product.
(Side note related to next factor: I wish all movies had digital versions along with the regular disk, don't make me go through the hassle of ripping it, might as well pirate for a digital copy as it would be easier. I just want a copy of your movie on my other devices)
The Better Value for Your Money
One of the reason people pirate is because the content is free. What it doesn't offer (usually) is cool bonuses. For example, some forms of games include soundtrack, art books, etc. If you're a fan of the game, then wouldn't you like to also have those things if you had the choice? If those bonuses are offered for the regular price of the content then you're creating more incentives for the customer to pay for your product.
I do wish movies included soundtracks (or similar freebies) but no you have to pay another few dollars (or hundred Pesos) for it. Why would I buy it then? Darn expensive collectors/more expensive versions.
Digital distribution is transforming how we purchase. You might think that if you prefer to buy via this method then you could not get extras. How about getting the soundtrack along with the movie? Or how about getting a free app related to your product? How about bundling movie, soundtrack, app, wallpapers for only 10% more than what you pay for just the movie. Sounds like a good deal, right?
Movies on the other hand are priced more fairly. You can rent a movie for about $4 (176 pesos) considering a movie ticket costs about $12 (528 pesos) for one person. I'm not sure if you're allowed to re watch movies if you rent a movie but still within the rental period as I haven't tried it yet. Buying movies are more of a hit-and-miss though. Some digital movies cost up to $17 digitally which I think is too much. Around $12 and below seems like a better price.
Games? If you're not buying the games on release date then you can definitively save a pretty penny. If you're using Steam, it has sales on certain seasons like Fall and Winter. You can get recent (2-4months) released games for 10-30% off. Slightly older games can be had for $30 or less on regular days. Some of the deals are too good to pass on if you're interested in the games. For example, the critically acclaimed physics-puzzle-shooter Portal 2 released April 2011 was on sale yesterday for $10.
Services such as these should also offer alternate payment methods. iTunes prepaid card is a good example. Younger people without a credit card or people who do not want to use their credit card online (or control purchases) could use the prepaid card to get content. More customers is a good thing right?
|A great example of additional content [Source](http://i1223.photobucket.com/albums/dd520/shashwatkumar1/img_3626_infamous-2-festival-of-blood-gamescom-2011-trailer-hd.jpg). Copyright Sucker Punch Games
If you are going with Micro-Transactions or DLC, you should still put effort in it and make it something of value. For example, in DLC, you could introduce new levels for just a couple of dollars. If a customer enjoyed and finished your game, he/she would maybe purchase more levels for it. Make it something worthwhile like a level where it explains how you're character ended up in the situation or a story on the villain or something quirky. Don't make something not worth the money like (expensive) alternate costumes where it doesn't really expand you content.
As a great example of additional/different content would be Infamous2: Festival of blood for the PS3. The game is a (pretty fun) typical action-adventure game. Festival of blood (technically stand-alone) is like a Halloween TV special of your favorite show. The hero is now a vampire and all sorts of quirky new stuff. It adds a whole different spin to the game.
If you can't charge for your product, why not make money off of it while you give away the game for free? Customers could check out your product without a penalty and if they deem worthy they can purchase additional content. Or just make money off of ads.
|A pirate. Yarr! [Source](http://spongebob.wikia.com/wiki/Patchy_the_Pirate). Copyright Nickelodion.
It could also apply to movies or games. If the content was not previously seen then it could not have created the current customer.
Piracy is a problem and it will probably forever will be but it doesn't mean that it will spell the doom to content. Since the goal is to make money, a content creator can still make money even if there is widespread piracy. All he/she has to do is to understand the problem and work with what's happening. Hey, piracy may even help sell the product.