Competing with piracy

I don’t like talking about piracy and Paperight in the same sentence. I didn’t found Paperight to tackle piracy. But since publishers wince every time they hear the word ‘photocopier’, I face the association in every meeting. Then I explain how Paperight should be part of any publisher’s anti-piracy strategy. It takes about twenty minutes to sink in.

Whether book piracy is casual or professional, the customer’s motivation is the same in every case: it’s cheaper. Cheaper not just in money, but in time and energy too. Piracy happens when the total resource cost of acquiring a book – in time, money, and physical and emotional energy – is greater than the cost of acquiring a knock-off.

One businessman I spoke to recently explained how he pirates X Box games: he used to drive across town to buy blank DVDs, spend hours searching for a quality torrent, then download it over two days. In money, this cost about R30 (petrol, DVD, data) – but he couldn’t be bothered any more: adding his time and energy, the total cost was too high. So now he buys pirated copies for R60 from a guy down the road. (A new, legit game would cost about R400.) The total resource cost of making copies himself is higher than the cost of the copy from the guy down the road. But not as high as the legit copy. Three choices, and he picked the one that costs him less overall.

The way to beat piracy is the same way you take on any business: you compete with it by offering an alternative with a lower cost overall. But how do we get the total resource cost of a book below that of a knock-off?

First, we make it cheap. Then, even more importantly, we make it easier to find legit books than to find knock-offs.

In traditional book and ebook publishing, consumers pay about 20% of the retail price for creativity, 10% for packaging, and 70% for availability (shipping, storing, displaying). That’s because the retail price of a book is made up of hundreds of small costs. For the publisher: shipping, warehousing, sales commissions, and the risk of printing copies that won’t sell. For physical bookstores: the opportunity cost of not stocking something that’ll sell better, and the cost of renting space in an accessible, and therefore expensive, location. For the online bookstore: more shipping, web development costs, competitive discounting on other titles (something’s got to pay for big online discounts), and online advertising.

Pirated copies come with far fewer overheads. With Paperight, publishers can start to compete with that. Then, by turning any business with a printer into a bookstore, we drastically reduce the time and energy required to find books as a consumer. Every copy shop, Internet café, and post office is a bookstore.

If you aren’t convinced yet, give it twenty minutes.