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Step2+

Why I Pirate - An Open Letter To Content Creators

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This post goes over Step2's 20,000 character limit. Please see the comments section for the second half.

INTRODUCTION

I once rented a car for work and had an unpleasant experience. When I returned the car, I thought to myself, "I'm never renting from them again." After sitting on it for a day, I realized conducting my own silent protest wasn't going to help me or the rental agency. So later that day, I called their corporate headquarters and told my story to the VP of customer relations. More importantly, I told him what they did wrong and what kind of experience I expect as a customer if he wants my future business.

I would like all the content creators reading this to view this post as though you are the car rental agency. I am a dissatisfied customer who may never buy from you again unless you get your act together. I normally wouldn't waste my time explaining all this, but the content creators on Step2 certainly seem to be going in the right direction so I'm hoping this information will help.

This post isn't my attempt at a debate. You won't hear any mention of theft versus copying, exposure versus lost sales or right versus wrong. All I want to do is give you real-life insight from the file-sharing world. I want to hold your hand and show you how I decide what to buy and what my motivation is to pirate. I will use the terms pirate, download and file-sharing interchangeably throughout this post but they all mean the same thing: to download your content for free.

Some people will read this and think, "I don't care what this guy says, internet piracy is damaging." For those people, I ask you to skip the rest of this post and jump to the bottom section titled, 'In Closing.'

Some of you won't read this entire post and it won't hurt my feelings. You won't understand your customers and we won't buy your content. And don't read this hoping to find out why people download your content in the hopes that you can stop it in the future. You cannot stop file-sharing. It would be like trying to stop people from using electricity. People who have already paid for your content will also be some of the ones who download it.  And they'll share it with others.

CHAPTER 1

I'm probably in your demographic. Male, mid-thirties, no children and living in Los Angeles. I'm also an unashamed downloader. I have many albums, many movies and many games that I share with friends and strangers. Most of which I've downloaded for free. Surprisingly, I also have many albums, many movies and many games that I have purchased, that I also share with friends and strangers. How did this happen?

When I was 16 and got my first job, I had nothing else to spend my money on but movies, music and games. I amassed a decent collection those first couple of years. As I grew older, I discovered I had purchased a lot of garbage. I was buying based on hype and I hated myself for it. By the time I was 21, I had stopped buying everything. I only played video games at my friend's houses and I only rented movies because at $1 a pop, I didn't feel ripped off if the movie sucked. I stopped buying music completely because it was hard to justify gambling $10 per CD. And trust me, that's what it all felt like, gambling.

I was in my twenties when Napster appeared and I still remember the day I heard about it. I had just started converting my CD collection over to mp3 and Napster saved me tons of time. After I downloaded the stuff I had already purchased, I began checking out new content. I quickly found several new acts that I liked and started downloading more new acts. It was addicting. When Napster was finally shut down, the file sharing industry had exploded. All these new services were catering to all types of media. Internet speeds were increasing. I had to buy larger hard drives to store everything.

I noticed something peculiar though. I was buying music CDs again. And I was going to the movies again. Same thing with video games and movie DVDs. It definitely started out slowly, but I can say with certainty, I spend significantly more now on entertainment than I ever did before I started downloading. And my story is not unique, many file-sharers will tell you the same thing.

Here's one thing a lot of content creators seem to not understand: I'm downloading your content because I'm interested in it. I'm not downloading it to try and stick it to you, I don't even know you. It's up to you to make the content compelling enough for me to buy it. I might not buy this one since I already have it, but if I become a fan, I'll likely buy the next thing you put out. Many content creators will think this is unfair. "I created the content, I get to control distribution and formats." No, you are wrong.

It used to be that way. If the record label said, "We are releasing this album in New York on the 10th and in Los Angeles on the 20th and only on cassette" then I had no option but to deal with it. Now, I don't care when, where or how you release it. If I want it, I'll get it. This is exactly what the internet did: it took control away from you and gave it to me. If you don't like it, then sit in your basement and create your content for your love of the craft instead of for profit. But if you want to sell it to me, you're doing it my way.

I will still give you my money if you make me happy. The sad part is there are still times where I would gladly pay for something but the content creator has left me no choice but to download it. Techdirt seems to post a story like that once a week. I'm not going to deny myself the enjoyment of your creation just because you haven't figured out how to collect.

How about this, I'll continue to download your stuff and have a blast. When you finally catch up, I'll buy your new stuff if the price is right. Maybe if you're lucky, I'll tell one of my non-techy friends about your movie or book and he'll buy the physical copy because he can't figure out how to download it. And I'm not going to feel bad about any of this because according to my credit card statements, I spend about $2,500 a year on entertainment. A $200 per month entertainment habit that is unequivocally fueled by file-sharing. Yes, I download more than $200 worth of content a month, but if you take away my file-sharing, you'll lose the money I'm putting into the market. That was definitively proven during my pre-Napster days.

CHAPTER 2

So let's approach this from a different angle. How about we take a deeper look at why I pirate your content and how you can extract money from me. But before I discuss how to get me to buy your album or book, let's go over a few things that are common to all types of media.

A. I have a lot of things competing for my entertainment dollars. You can't expect me to buy your content sight unseen when your competition has already proven to me that they have a quality product. You have to show me what you've got.

B. Get a handle on your pricing for digital media. Look, we understand why a paperback costs $7. You have to buy paper, glue and ink. It has to be written, edited, printed, shipped and stocked. And each of those people wants to cover their costs and make a profit. But when you write an ebook, and all you have to do is hit 'copy' to make another sale, you have no business charging $7 each. Remember before when I said I'm not downloading to try and stick it to you? In a situation like this, I'm downloading because you're trying to stick it to me.

C. Don't try and restrict when or how I can purchase your content. The internet has made the world a single, always-open marketplace. Either your product is for sale or it's not. Don't try and tell me I can't buy the DVD in the United States because Europe gets the exclusive rights for the first 2 months. I'm just going to download it and probably forget to buy it.

D. Stop trying to dictate how I can consume your content. This includes formats, media types and playback restrictions. I don't care if you think it's only real music if it's played on vinyl. I want it in mp3 format on my phone so I can listen to it at work. I don't care if you think a Hulu subscription is only valid for a computer. I want to watch the content on my television. I don't care if you think I should have to buy a digital copy separately from the DVD. I'm going to buy the DVD and create my own digital copy. And if you try to inject DRM to prevent me from doing what I want, you will have ruined your reputation and I will never buy from you again. Instead, I will only download your content for free. The question isn't whether I'll get your content in the format I want, the question is will you get my money in exchange for it? Your cooperation helps.

CHAPTER 3

Music. If you want me to buy your music, I need to be able to hear it first. Even if you're trying to sell for profit, you should find a way to get mp3 versions of your music on file-sharing sites. Now I know some of you are going to tell me that since you're selling your songs on Amazon or iTunes then I can hear 30-second preview clips and I have no reason to pirate. Nonsense.

Most music listening is not done sitting in front of the computer clicking "Play Preview," waiting 30-seconds, clicking "Play Preview," waiting 30-seconds, etc. We all listen to music while driving in the car, working out, partying or browsing the internet. I can download your entire full-length album in unrestricted mp3 format in less time than you can listen to one 30-second preview. You're not going to sell me anything by forcing me to sit on one website, going click click click and only getting small snippets of your music. What you are going to do is make me not care about your content.

One day I saw the name of an artist I had never heard of before. He had released three albums but hadn't made it big. I downloaded all of his albums and found out I liked a good portion of his stuff. A few months later on Amazon, I noticed he had a new digital album out. I purchased it without listening to a single preview clip. I also told several of my friends about him. I don't know if they bought anything, but that's not the point. The point is he got my money. Specifically because I was able to download his older albums and the stuff he was selling was DRM-free.

Now some of you are sitting there thinking, "Hey, you now have four albums but only paid for one. That artist lost three sales!" Obviously you aren't paying attention. Your facts are accurate but your conclusion is erroneous. No sales were lost. There were only two possible outcomes, either there would be no downloads and no sales or there would be three downloads and one sale. Which would you rather have?

Don't try to gouge me either. We customers have come to expect physical CDs to cost $10-$12. You better be in that range if you want me to buy. You've got no business selling your album for $25, you're just going to alienate me and drive me to download it instead, even if you're a big-name artist. I'm also turned off by the current mp3 market pricing of $1 per song and $9 per album. It's digital, I should be saving more money by not buying the physical product. I think $0.25-$0.50 per song and $3-$5 per mp3 album is my price range. You may think I'm insane, but luckily I'm not confined to your pricing structure, I've got other options.

Those other options also mean I'm not going to entertain your thoughts of using special playback mechanisms to enjoy your music. I will not install some special software just to play your CD. I will not install iTunes. I will not use Windows Media Player. I'm going to convert your CD to flac and mp3 and put it on any device I want. I want my music free of DRM and free of licensing restrictions for personal use. Another thing I'm not going to tolerate is when you offer special tracks through one particular retailer. Like when you make an album with 15 songs and then offer a special 16th song that is only available if you buy from Walmart. I'm definitely going to pirate that 16th song and I'm going to consider pirating the whole thing. Do you want my money or not?

You want to know who's really going to get my money? The artists who wake up and realize they can sell me their newest physical CD for $20. And by paying $20 for it, they're going to give me unrestricted digital copies of this album, and all their other albums. You know who's going to be hurt the most by that? You. Instead of me paying $10 for their CD and $10 for your CD, I'm going to give them the $20 and pirate your album. And if you are going to sell your album digitally, I would really appreciate liner notes. You can offer me a pdf file or simply link me to a webpage, but stop ignoring this valuable info. And make sure you have a website that details everything you've released and what you're working on. There's nothing more frustrating than finding a new obscure artist you like who only has a dormant Myspace music page.

Keeping your head in the sand will also drive me to download. The Beatles fiasco when they held out allowing their music to be sold digitally is a prime example. The band, the heirs and the label all had their idiotic hands in the mix jockeying for position. Since they had no respect for their customers, I decided to downloaded every album simply because I could. When they finally did release digitally, I wanted no part of it.

I have a colleague who has been working with his brother on releasing an album. They are terrified of the internet and it shows. When I first asked to hear some of their music, I was told the only way to hear anything was to come by their studio. Excuse me? Come by your studio? Are you nuts? Barring that, they told me to go see him play live. I'm not a fan of concerts so I doubt I'd go even if it was free, but they wanted me to buy my own tickets. They finally put a few tracks on YouTube but they're still nowhere near getting me to reach for my wallet.

CHAPTER 4

Books, comics and magazines. Some will say it's not a real book or comic if you can't hold it, turn the pages and smell the paper. That's just elitist nonsense. Anyone who has paid attention to the industry knows there is a demand for digital literature and as a producer, you need to give your customers what they want. There is a market for both physical and digital and you better make sure you have both available. Sure, someone huge like Ray Bradbury can hold his breath and stomp his feet and say "No ebooks!" But someone like you can't afford to ignore the market trends. And Ray Bradbury finally releasing ebooks was a non-event for us downloaders, all of his works were already available in ebook format on the pirate sites.

Just like with music, some of you will think that if you provide several preview chapters, I have no reason to pirate. And just like with music, you'd be wrong. Many times I've read sample chapters and then been disappointed by the entire book. Maybe it was your ending, or maybe it was the way you pulled something out of your ass in chapter 17 to rescue the girl. Either way, I'm not gambling anymore. Sure, some people might read those three chapters and think, "Hey, this is great, I'm going to buy this book." Me? I'll download it and read it if it's compelling. If I didn't like it, no harm, no foul. But if I did like it, one of two things are going to happen. One, I'm probably going to buy your next book so you should make sure you have a website where I can check up on what you're doing. Two, if I really liked this book, I'm already thinking about who else would like it. I'm going to buy the physical copy and give it to that person. I've probably purchased 10 books this year, yet I don't have a single one in my house because they've all been given away.

So if you want to generate a sale from me, you better make sure your book is available on the file-sharing sites. All of your competitors are already there so there is no reason you shouldn't be also. Additionally, if I buy your physical book, you should throw in a free digital copy. And if you offer digital copies, offer all the possible formats. If you only offer a pdf version, you aren't inconveniencing the pirate community. We can easily convert it to lit, mobi or epub. But what you are doing is potentially losing a sale to people like my mom. If she can't easily get it on her Nook, she's not going to bother with it.

I rarely buy hardcover so I'm going to skip offering a price opinion on it. As far as fiction goes, I expect to pay $6-$9 for a paperback and $3-$5 for a comic. For digital, ebooks should be $1-$3 and ecomics should be $1. Sure, I'll pay more than those prices if you're one of my favorites, but chances are you're not. Stop pricing your content like a diva.

If you've managed to coerce me to buy your current book, you're going to have to entice me if you want me to buy your older stuff (which should always be cheaper than your current stuff as a rule.) At the very least, I should get a discount on your older stuff for being a current customer. And I'm not talking a token 10% discount, make it something substantial like 50%-75% off. Or better yet, use the example I proposed in the music section. Sell me your current paperback for $12 and give me free digital copies of all five of your books. Treat me right, and I'll pay full price for whatever you put out next.

Even though I'm big on downloading, I still subscribe to four print magazines and one daily newspaper. Why would I do that when everything in those old-timey printed things is available for free online? Portability. I'm not paying for the content, I'm paying for the service of collecting all those articles in one easy to carry format and having it delivered to my porch. Now I can take this easily mobile collection with me anywhere I go.
 

[continued in comments section]

initiated Dec 5, 2011 in General Feedback by Bobbi Smith (470 points)   2 3 4
   

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CHAPTER 5

Video games. I've had a very up and down relationship with video games. The ones that I like, I like a lot. And the ones that I hate, I despise. Of all the media I come in contact with, video games have the hardest time drawing money from me and the main reason is their pricing.

Take World of Goo for instance. I first heard about them in 2008 when Techdirt featured their blog post saying they had a 90% piracy rate. The World of Goo makers weren't complaining about piracy, they were just trying to put some numbers out there for analysis. I downloaded the game to see what all the fuss was about, to see what was so great about this game to give it a 90% piracy rate. I felt it was a decent puzzle-type game, and liked the attitude the makers had about piracy, so I considered buying it. The problem was it was $20. I'm not paying $20 for a puzzle-like game that is nothing more than a bunch of similar but different levels. $5 probably, maybe $7, not even $10. I played it a couple of more times to see if it would hook me. It didn't so I deleted it.

Fast forward to 2010 when the first Humble Bundle was released. Upon hearing the details, I thought it was a fantastic concept and had already decided I was going to participate. Low and behold, World of Goo was one of the games. I paid $20 that day and got six games. I still haven't played World of Goo, but they got my money. I've purchased all 7 Humble Bundles and expect to continue doing so.

Now let's look at the big budget games, like Call of Duty, Halo and Madden. $60 for one video game? Forget that, I'm going to download it. If I spend $60 on this game, that means having to skip a future game I might like even more because there's less money in my pot. Even getting these games on sale for $40 is too steep. Right now, $30 seems to be the most I'm willing to spend on a game. And those prices are for when I buy physical copies. I expect discounts when I buy digitally. I think $20 is the max I'd pay for a digital game.

Someone out there right now is thinking, "What?! We spent $25 million making this game, there's no way we can make a profit selling it at $20." Not my problem. If you want me to buy it, you've got to get the price down. Here's an idea, don't drop $25 million making one stupid game. So while you bitch about it, I'm downloading it and playing it anyway.

Here's a real life example of how this works. I heard from a friend that Mafia was an enjoyable game. I downloaded it, played it and enjoyed it. Did I immediately go rush out and buy it? No, of course not. But when I heard Mafia II was coming out and it was made by the same company as the first one, I pre-ordered it. During my pre-order, for $10 more, they offered a Mafia I/II bundle, so I bought the bundle. When the games arrived, I gave Mafia I to a friend.

Why did I download Mafia I instead of trying out their demo? Because video game demos are the worst kind of samples of any media out there. I played the demo of this one adventure game and the demo was nothing more than a series of well-crafted interactive cutscenes. When I bought the game, I discovered the main gameplay was horrible which explains why it wasn't present in the demo. And the cutscenes weren't interactive. I got baited and switched. I once played the demo of an RPG that lasted about 10 minutes and had you fighting through one dungeon. When I bought the game, I found out it had only one other dungeon and the total game time was about 35 minutes. It's not worth it, it's easier to just download the full game. I'm done gambling.

The interesting thing about Mafia II was that I still pirated it. When I went to install the game for the first time, they tried to force Steam down my throat. I will not install Steam or any other DRM package just to play your game. I'm starting to soften up on Steam because it looks like the guys running the show seem to understand gamers. But my biggest complaint with Steam is that I want to play my game. I don't want to wade through advertisements, memos, updates and reminders. I want to play my game. The one I bought.

One company who will never get my money until they get their act together is Ubisoft. I refuse to give them any money until they stop with this nonsense. I'll still be playing their games though, but I'm tired of having my system mucked up or made less secure because of poorly designed DRM. The farthest I'm willing to go is entering a serial number one time, during installation. Anything more complicated than that and I'll probably ignore your game completely. If there is a lot of buzz, maybe I'll download it to check it out. Many times I've had a better experience with the pirated version of a game than the retail version. If something isn't working right with a game, the pirates usually include a fix in the download package.

Ubisoft's stance on their upcoming game I Am Alive is rather amusing. Even though they later backpedaled, Ubisoft originally said there would be no PC-port because of piracy and it would initially be released on Xbox and PlayStation. What I find funny is that the people clamoring for a PC-port are the ones who would probably buy it. The rest of us will just download the iso and play it on an emulator.

If you expect to have any hope of me buying your game, you really need to work on your pricing structure. Nobody buys one game and plays is for 24 months straight and then buys another game. We are constantly bombarded with advertisements for the next new big game. And you know what? It's exciting, we like it. We want to play your games. When they're $60 a pop, it limits the number of games we can buy, but it doesn't limit the number of games we can download.

CHAPTER 6

Movies, TV and video. Pretty much any movie I can think of is at my fingertips, and in the unrestricted formats I like. Hulu and Netflix can't even come close to matching what the pirates have accomplished. Why subscribe to Netflix when some other movie studio can decide to not renew their agreement and 25% of my available viewing material disappears overnight?

Get your movies and shows on the file-sharing sites. If it's good, word of mouth will get me to watch it which is always the first needed step. Just like the other media I described, I probably won't rush out and buy it if I liked it, but I will be checking up on you to see what you're up to next so have a website.

Every DVD I have ever purchased I have also pirated. The pirated files are compressed so they take up less computer space than just copying the DVD files. You can fit 3-6 digital movies in the same amount of space that one DVD uses. I can also easily convert these digital files to other formats when needed. Just like with music, I will not tolerate you making me jump through hoops to watch your movies. I will not use special hardware or install special software. I already have everything I need to play videos. If you can't give me what I want, I will download it instead, which means I may or may not buy it.

If Hollywood would offer up a service that had the same breadth of content the pirates offer, and it was reasonably priced, I'd be a subscriber. The problem is that every legitimate service was never 'complete' and those that were trying to do so are becoming fractured as the content owners decide that they can do better.

If you want me to buy your physical DVD, there needs to be no copy protection and no licensing restrictions for personal use. It should also include a digital copy that is available in multiple formats. Yes, I have a DVD player, but I also have a home theater PC and it's way better than a DVD player. I can keep my entire archive of movies and TV shows on there for immediate viewing. You know what you can't immediately view? A store-bought DVD. After you put it in the DVD player, you sit through the FBI warning, possibly another anti-copying message, then some promotional stills of the studios involved in the movie, then some trailers for other movies and then you finally get to the main menu. If you're watching a TV show DVD, you still have to cycle through the menus to find the episode you want. With digital files, it's instant playback.

If you're selling digital videos, they need to be DRM-free with no licensing restrictions for personal use. They need to be available in different formats and bitrates, or at least a high-quality bitrate so I can do my own transcoding. Years ago, I made a mistake and purchased a digital movie that had DRM. After downloading it, I found out I couldn't move it to another computer which meant I couldn't watch it on my home theater PC. No big deal. I used a program called Fairuse4WM to remove the DRM and was able to copy it over. The experience annoyed me enough that when a friend with a similar setup mentioned he was going to buy that same movie, I told him not to bother because it had DRM and I gave him a copy of the one I had. There's your definition of a lost sale.

$20 is the most I'm willing to pay for a physical DVD, whether it be a movie or a season of a TV show. They really should be in the $10-$15 range. If I buy your DVD, you should give me digital copies for free. I know it's wishful thinking, but can you remove all the FBI/preview crap from the beginning of your DVDs so we can get right to video? If you're selling digital videos, they need to be cheaper. If you want me to buy your digital movie, it needs to be around $5, same for a season of a TV show. A single episode of a TV show should be around $1.

I'm not even going to entertain 'renting' video anymore. This is a concept that for me has outlived its usefulness. I might still rent a physical DVD in a special circumstance but it won't be too long before every media player I come in contact with will play digital video files out of the box. I will never rent digital video files, mainly because I think those, "You have 48-hours to watch this rental" restrictions are stupid. Instead of going through that song and dance, I'm just going to download it and watch it anywhere and any hour that I want.

Even with all this downloading, I still go to the theaters twice a month. Why? It's not for the movie itself. I can always wait for a movie to hit the file-sharing sites if I really wanted to. I go to the movies because I enjoy going to the movies. I enjoy sitting in nice dark theater in front of a huge screen being entertained with my friends. And even though I have downloaded every episode of South Park, I still own every season on DVD because I want them to keep making it.

You know which movie I'll never buy? Hurt Locker. Voltage Pictures may know how to make a good movie, but they don't know squat about customer satisfaction. Once I heard they were going after file-sharers, I specifically downloaded the movie just to spite them.

CHAPTER 7

Techdirt stresses that content creators need to connect with fans in order to get them to buy. When I first started hearing that, I thought it was off-base. I could see anecdotal evidence showing it worked but my brain was telling me just because a content creator shows me their creative process or does a Q&A doesn't mean I'm more inclined to purchase their products. But the more I thought about it, the more I realized Techdirt is absolutely correct. The reason I buy the products I buy is because I am connecting with you, in my own way. I want my content creators to not be like Scott Ian and Lars Ulrich. I want my content creators to understand where technology is taking us. The South Park guys have every episode of their show available for online viewing free of charge. And I just so happen to own every set of their DVDs. The Humble Bundle guys know I just want to play my games with as little hassle as possible. And I just so happen to own every Humble Bundle. When I look at the software I have purchased, it's the ones with the unrestrictive EULAs. The kind of agreements where I can install the software on any computer I own, not just on this computer.

Do I feel bad for file-sharing? No, not in the least. True, it's technically illegal, but so is rolling through a stop sign and jaywalking. Yet everyone reading this has committed both of those crimes. The main reason I don't feel bad is because, like I detailed above, I know I'm buying content. Another important reason I don't feel bad is because I'm not profiting. I'm not taking your content and trying to resell it as though I'm a legitimate vendor. Physical piracy is a genuine problem and even the file-sharing community supports laws against it.

Being an active file-sharer means I have a clearer picture than you do of what's really happening. I know when I download something that it's not a lost sale and it's not theft. The fact that you can't see that is not my issue. I'm not going to let you stop me from sailing the world just because you think the Earth is flat.

I have no desire to support the RIAA and the MPAA. The unfortunate part is that I know they represent artists who are not fond of the tactics being used. I'm not going to refuse to buy your product, but I will take a long hard look before I buy. I would hate to be judged by the politicians who represent me, so I won't judge you by the sue-happy trade groups that represent you.

Lastly, I don't have to be your friend or share your same political views to like and purchase your products. You can make mistakes or hold a viewpoint I don't agree with, but if you're a horrible person, you can be certain I'm downloading everything you produce for free. Roman Polanski and Chris Brown are assholes. Don't expect me to buy their content. If you decide to work with them, I will not buy your products either, but I will enjoy them.

IN CLOSING

This section is for the people who can't be swayed from the 'online piracy is damaging' viewpoint. You likely didn't read my post, but I assure you there was no hyperbole. I didn't try to convince you copying is not theft, I didn't try to convince you I'm too poor to buy products and I didn't try to convince you file-sharing is akin to advertising. I just tried to tell it like it is.

Selling music, movies, books and video games is a business, big business. There is a lot of money generated by big entertainment and there are shareholders who won't stand for nonsense. For the last 10 years, I've been told the music, movie and game industries have been losing money, lots of money. Year after year I'm told online file-sharing is decimating sales, everyone is losing money, we have to do something to stop it. I'm not going to try and convince you you're wrong, but I do have a question:

If you were selling hotdogs and you started losing money, would you continue selling hotdogs at a loss for 10 straight years? The reason I ask is because I looked at some of the industries own numbers and it baffles me. If online file-sharing is killing these industries, why would they keep producing more content? And I'm sure someone is going to pull out a study showing trends in per-capita spending adjusted for inflation versus discretionary income per single-family residence that shows the entertainment industry is in a bleak position, but that's not what I'm after. If nobody is buying buggy-whips, you don't increase production year after year. Yet over the last 10 years:

The number of movies released is up 23% - [1]
The number of books published is up 47% - [2]
The number of albums released is up 25% - [3]
The video games industry is up 23% - [4]

When I look at those numbers, I have a hard time believing what Chris Dodd, Hilary Rosen and Stanislas Mettra have to say. Didn't Warner Bros. just set a company record for quarterly profits? I'm confused. My guess is that these industries really aren't losing money, but they are losing control. And maybe to them, control is more valuable than profits? I don't know, that's why I'm asking.

References:

[1] - http://bit.ly/rj5mRT
MPAA industry report page 13.
454 movies released in 2001.
560 movies released in 2010.

[2] - http://bit.ly/uRb4KC
R.R Bowker output report, 2002 thru 2010.
215,138 books published in 2002.
316,480 books published in 2010.

[3] - http://bit.ly/tneVtC
90,324 music items for 2001.
113,080 music items for 2010.
Unfortunately, I could not find any release statistics on the RIAA website. Instead, I used Discogs browse by year feature and noted the number of items listed at the bottom of the page. This wasn't ideal so I'm hoping someone out there can dig up a relevant report.

[4] - http://bit.ly/kLHJ2Q
ESA industry report page 10.
208.7 million units sold 2001.
257.2 million units sold 2010.
I was unable to find any information regarding the number of releases per year. I used the number of units sold per year instead. Admittedly, the last two years have shown decreases of 7% and 8% but it should be noted that the chart in question is for "sales of new physical content at retail exclusively." So if you didn't buy at a retail chain or if you legally downloaded your purchase, it's not included in this chart. Page 11 of the same report states 24% of content was digital in 2010. I know it's not a perfect methodology but if we increase 2010's units sold by 24% we would get 318.9 million units which would be a 52% increase over 2001. I believe the 23% increase stated above is lower than the actual number, but I also thought it was important to use the numbers supplied by the industry.
response added Dec 5, 2011 by Bobbi Smith (470 points)   2 3 4
edited Dec 5, 2011 by Bobbi Smith
@bobsmith You are just a bitter bassment troll.. You contradict yourself so many times. You are just cheap and think all entertainment should just be done for the joy of doing it despite the time, money, and often stress that goes along with it. You say you find out if you like music by downloading it and that you will buy the next album if you liked what you heard for free. So it took you 3 (!) cd's to figure out if you like a band when it normally takes people 3 songs? Then since you got the others for free, you don't pay him for the other 3 just the 1. The justification is that you wouldn't have even bought the 1 without getting the others for free.. this is absurd and hypocritical. Because you are saying I download because I don't want to risk, then saying you like it so I'll buy the next one, but not the others I'm going to listen to because you can steal them and not get in trouble. You are the poster child for why they should start enforcing pirating laws and start with you by using this article as a written confession. I may go to law school, just to be the one who does it. Because you are a ridiculous excuse for a human being.
I agree with you about the topic creator contradicting himself.  There are points I support and points I don't support an company/group.  I could grab any kind of mp3 out there, but to do my fix, I just go youtube to listen to all my songs.  I know Netflix sucks with streaming choices, but certainly for 7.99 a month, you get alot of content that will keep you busy.  I'm really glad for Netflix not adding commercials before, during, after the movies.  I don't agree with the price hike that happened and lost lot of subscribers, but they had to make money somehow.  

What I really despite out there is the stock market.  Netflix had to increase price to help those in stock market. Just like they do with Gas prices.  Many said gas price hike is because of world events, probably true in some cases, but mostly the gas price hikes is those investors who put too much money in gas and oil, and being so happy to take all your money when you go to the pump.

I REFUSE to have Hulu subscription.  they also have that 7.99 a month, BUT with commercials?  Get real!  As long as I'm paying for stuff I don't want to be bugged every 10-15 minutes.  If I want, I'll just watch it free and that commercial really covers to pay for the streaming and services/hosting.  But sadly there is too many people who fork so much money in cable TV that accept commercials in demand.  That's why I refuse cable TV.

Again the TC seems to contradict himself.  I LOVE Valve (Steam), Left 4 Dead, Team Fortress 2.  They provide unlimited support for the games for years, and like the Left 4 Dead game, you pay once, you get unlimited free updates, weekly, or two.  Tell me what company does this, most support a game for 6 months then it's dead.  If you just download Left 4 Dead from pirate sites, you suck!  Your game is so outdated, and can't play online with certain people you want, anytime, anywhere.

But I see why you can download and play games that you don't support a company, but why in heck download it if you don't like the company?  Take Call of Duty Modern Warfare 2, when they abandoned dedicated servers.  You went ahead, downloaded, enjoyed the game regardless.  Why don't you just refuse it?  It's almost like saying, okay.  I don't like your services, but I still like to hang out with you because you're still cool bro, and just take advantage of a guy then it just doesn't fix anything!  What would fix it is, don't buy, don't promote.  When a game leads high piracy rate, it shows its popularity and then that more people will buy it because they feel it is good, then it just makes the company have a positive reinforcement more than the piracy side does.  If there is lack of sales, etc, then let them lose their money and die!

Anyways, I can support getting certain types of media if it lacks in your country and no other way to obtain such.
@bobsmith First off I read your entire post and thought you made some very good points.

But I actually disagree with your statement that "I didn't try to convince you copying is not theft"  When you state "Do I feel bad for file-sharing? No, not in the least. True, it's technically illegal, but so is rolling through a stop sign and jaywalking. Yet everyone reading this has committed both of those crimes. The main reason I don't feel bad is because, like I detailed above, I know I'm buying content."  And earlier you give an example of how you downloaded 3 albums and that led you to buy a 4th. You are rationalizing not paying for a product as ok.  So either you are saying that it is not stealing, or you are saying that stealing is ok as long as you pay some of the time.  

And comparing downloading to jaywalking is a poor analogy.  Jaywalking is a crime because it is dangerous (at least some people think so) and the law is designed to keep you safe.  If you do it safely you can at least argue that you did not violate the spirt of the law and you did not deprive anyone of anything.  Downloading violates the letter and the spirit of the law,and yes when you download you are depriving the content creator of money you should have paid him/her.  A better analogy would be to go back to the rental car agency you mentioned at the beginning.  In this analogy you are taking one of their cars, driving it around for a few days and then returning it with out paying a rental charge.  Your rational would then be, well the customer service stunk so I was never going to rent in the first place so they never lost anything.  Still grand theft auto.

That being said I agree with all of you observations about how the content creators/distributors are not delivering a product the way their customers want with a reasonable price structure.  But the solution then is don't buy/use the product, not steal the product.  

And I might be more sympathetic to your viewpoint about downloading first to make sure you don't get ripped off if you found a way to pay for the content you actually liked after the fact.  Saying that you'll just buy the next thing the artist makes is a poor rationalization.  What the industry needs is a way to return purchases.  If bissell sells me a defective carpet cleaner I can return it for a refund.  But the nature of digital content will make that extremely difficult.
@bobsmith

Wow, that was interesting. One rarely sees someone so me-me-me. Fortunately he doesn't have children, so they don't inherit his mental illness genes.
@bobsmith Very interesting article. Off course there is a part that is downloads because its free. They will never buy so in your mindset the industry shouldn't even bother with them since they will not generate any sales although what they're doing feels the most like stealing.

That being said, I'll gladly pay but I have only so much to spend on entertainment and we're being bombarded with media everywhere, more than we can consume in a lifetime, and we're not allowed to touch it, only the very little part of it that we can afford? Most people don't have that much they can spend on movies, music, books, games, subscriptions for magazines, television, theatre, ... so they have to make choices and then the old value for money meter starts to kick in and the greedy industry looses. This is culture we're talking about and we like to take as much culture as we can. It used to be free in the past, its only something that human kind has capitalised this last century with the introduction of copy-rights, initially introduced to stimulate creativity by protecting the poor artist/inventer/creator against copycats so that they could profit from it and continue their creative work. Today the copy-right is a weapon for a select, very rich, powerful group of people that uses the copy-right to protect their position. When they're starting to destroy the lives of normal decent families with million dollar law suits for a couple of downloaded mp3's then there is something deeply wrong in society.

If they would reasonably price all digital content and make it available to use it how you want to use it they would make much more sales then today. For good quality material, reasonably priced, I wouldn't even bother downloading something illegal and I bet I wouldn't be alone. If you work something out based on the number of illegal downloads at 0.25-0.50$ I bet the industry will make much more than today. But its like you said, they are loosing control and thay are grasping to hold on. You can be sure thay are spending mucho $$$ to influence governement decision making in their avantage.

Most people against, at least that is how I see it, are not so techy savy and in their world its very simple as they don't see why everybody is so bothered. They probably don't download content, they still watch their little soaps on tv and are very fond on their precious music collection. They don't spend more $$ than you or me because they also work for the same bosses who aren't throwing it in your face but they probably don't download, stream it to whatever they want, use it mobile on various devices for various purposes and store it in different formats. The problem the industry has is that these opinions will fade out as the future generations will rise. Internet has give power to the people and the will make use of it. As with any other great technology the governement will try to regulate and control it more and more. The question is who will win the opinion of these decision makers? Who will they support? The ones they represent or the ones that are filling their pockets?

Those guys from Metallica for example, they should be embarrassed, sitting on all those millions and then shouting the loudest how everybody that downloads their album is a criminal and threatening them for it. How much should you make for recording a few songs and putting them out? If they need cash they should work for it like everybody else. If they play a concert they make a few millions! Isn't that enough guys? At the end of the day, whats wrong with making an honest living?

What should all those hard working fans think of such greediness. In the old days an artist would be happy if he could put out a record, make music and make a living out of it, Now they want to put out a record and live like millionaires for the rest of their lives.

Bottom line is that the whole economical model around this digital media should be transformed in something new. The industry is very reluctant to do this because if you think it through there will not be much room for them anymore. Al least not in the way they exist today. If they're smart they can take a head start, play a pioneering role in this transformation towards a more service orientated role. Not only making money by owning rights on a song and forcing us to pay whatever they want for it but by enbabling such good service to provide us with what we want, whenever we want, at a price we find fair.

Remember industry guys, in tomorrows global digital world their will only be global brands. Do not try to fool the public with faul trics because you will get caught. Words spreads fast and their is only room for the best. Pioneering advantage is a very big plus in case you forgot facebook, youtube, ebay,... Will your company be the one that truly finds a way to rethink itself, finds a way to interact with the customer in a respectful way without being greedy or scary, offering the range of products and the flexibility of use the public wants?
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So basically:

  • give your customers the opportunity to try your product in full
  • Make it available unrestricted
  • Make it available to all markets at once
  • Price it realistically
  • Cut out any unnecessary steps between loading the product and watching/listening/playing it
  • Be honest to your customers (both in terms of trailers & PR)
  • Add value not blockages
  • Make it as easy to buy as it is to pirate.

And accept that not everyone will buy a copy but more will buy it than would have under your current tactics.

response added Dec 11, 2011 by drew stephenson (3,370 points)   2 10 22
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I think one of the key notions here is that the thing customers are getting in exchange for their money isn't the same thing it was in the 70s. Back then, I bought a record so I could have the ability to listen to it whenever I wanted, and have all the images and information in the liner notes and album cover. If I was a record collector I really wanted the THING, but those people still do, so aren't super relevant to the cultural change.

Normal customers now aren't paying for access to the music. They're paying for the feeling of supporting someone they believe in. They're paying for pride, belonging, or out of believing they should play by the rules. Actually buying an album (or a VIP ticket to a live experience, or a t-shirt, or a kickstarter reward) gets them into your world, and makes them feel part of a group of people who support your art.

Making your music as easy to buy as it is to pirate will get the "I should play by the rules" people, but it isn't enough. You have to go further and make people who paid money for your art (which they could have gotten for free) part of a meaningful group of people. Email them, invite them to stuff, talk about them when they do things. That's the feeling they were paying for when they bought your album. That's the respect they want to feel back after having done so. That's what will turn an album purchaser into a real fan.
response added Dec 11, 2011 by Kevin Clark (1,470 points)   2 8 14
@kevinefclark I disagree on the notion that people today are paying in support of someone they believe in. There certainly a group in that niche but for the mass majority, and certainly for almost all of my friends, its about having access to the content. No one cares about support an artist or actor or author. I can honestly go poll each and every single one of them and honestly, you'll maybe get 1-2 guys saying they'll sometimes do it in support. The reality is that's not why people spend their money.

To be fair, my entire circle of friends (online, offline, in various locations) do not represent the mass majority, but its certainly worth noting considering I hardly know or encounter anyone that does so in support of people behind the content.
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First off, I really enjoyed this post. It was nice to read a long, in depth, and articulate opinion from the file sharing point of view. There are definitely some things that I'm going to try to implement with my own band, Walking Corpse Syndrome. We've been leaning towards giving away our music for the last few years. I've been one of the hold outs. Why? Because even though we don't make much money through digital distribution, we do make some. I was of the view point that if people could get it for free, why would they even pay for it? You helped answer that by explaining that if I can make a fan, they'll be more likely to fund/buy our next release.

I also understand completely about not wanting to gamble on purchases any more. I bought music for years. I just thought it was acceptable to buy 10 albums to find that one that was actually good, and two more that were mostly good. I've been going through and listening to my CDs a lot more recently and I hate how much more cumbersome it is compared to listening digitally. I'm also of the mind that physical CDs should never cost more than $10, unless there are also bonuses and extras packaged with it. (e.g. a DVD, posters, etc.) From a consumer stand point, I'll never spend the same on a digital album as what I spend on a physical album. It's insulting to see digital albums for sale at $10.

On our Facebook page, I recently did a poll where I asked people how much they thought digital albums should cost. I was of the mindset that if an album cost $1.99, I'd be buying a lot more albums again. Most people voted for $5.99, so I put our albums for sale at $4.99. I haven't seen any increase in sales, nor do I really exect to.

response added Dec 6, 2011 by Matthew Bile (1,120 points)   1 6 15
@matthewbile If you autograph the CDs, I'd pay $20 for them (if I like the music, that is), and I often have for other artists.
@matthewbile One thing you have to consider is that while your album was priced higher than $5.99, maybe quite a lot of people already downloaded it and don't want to buy it now. So maybe next time, you can start the pricing at $5.99 itself?

Also, you have to let people know you lowered the price of your album. If no one knows the price has decreased, no one will buy! :)
@matthewbile I would imagine you've already sold to everyone who would buy in your current market (everyone that currently knows about you). The only way you will see if the price change has worked is if you increase the size of your market, then compare the percentage of sales at the new and old prices against market growth.

Do a bit of a marketing drive, expose new people to your music, there are probably communities on reddit that would appreciate knowing about it.
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Why I pirate: What's sauce for the goose is sauce for the gander. https://torrentfreak.com/riaa-and-homeland-security-caught-downloading-torrents-111217/

I'll stop when they stop.
response added Dec 20, 2011 by shawnhcorey (620 points)   1 3 8
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Fantastic post!  Pretty much sums up everything I feel about file-sharing and how I decide when to spend my money.  Give me what I want, when I want, it, however I want it at a reasonable price and you will get my money.  Don't do that and I'll still get what I want, the differenc being that I you won't get paid for it.

This should be required reading for every content producer/owner.  The content creators should read this as well to understand how the actions of their backers/producers/labels/publishers are alienating people that want to buy their works.  People really do want to pay, but they want to get value for their money.  Gambling simply isn't going to cut it any more when there are almost unlimited ways to try before you buy.

Louis C.K.'s example fits this discussion perfectly.  Content providers need to be polite, awesome, and human.  Polite means treating your customers with the respect and value they deserve.  Never forget that without your customers you are NOTHING.  We do not need you, but would not exist without us.  Being awesome simply means providing content that doesn't suck.  I think this should speak for itself, but the industry hasn't really figured this out.  It's better to not make a movie or game if it is just a crappy rehash of something that worked before.  Be creative and be innovative or get another job.  Being human shouldn't be all that difficult either but seems to elude most of the industry.  Unless you know something I don't, I'm pretty sure you put your pants on one leg at a time just like the rest of us.  You bitch about traffic and the weather and fart just like the rest of us as well.  Stop forgetting that and just be one of us, connect with us, show that you appreciate us and you will be amazed at how much more admiration and respect you will get from us.

My 2 cents to add to the mix:  The first step in Connecting with Fans/being Human/being Polite is to stop treating your fans like criminals.  Stop inconveniencing people who give you money.  It boggles the mind why this concept is so difficult to grasp, but seriously stop with the DRM.  Stop with the FBI warnings.  Stop with the system restrictions, the country coding, and the release windows.  Just STOP with anything that makes the pirated copy more convenient.  In the long run, this simple step will generate tons of goodwill, convert over new paying customers, and generate long term sales.
response added Dec 23, 2011 by Kristopher Kell (170 points)   1 1
@frankryzzo Too right, every time they make the legitimate version more difficult they make a rod for their own back. But will they learn? Will they bollocks.
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I agree with this post, I however have one kid and another on the way.

I would like to add my recent experance. I went to Disney's store to buy "Bill Nye the Science Guy" for my son that is 4 years old. He loves the show, however Disney wants $200+ for a season or $29 per 25min episode. I thought it was a broadcast license or something, but nope just rediculouse pricing for a show that is 10+ years old. So now I am just going to copy it from several other sources and make sure I have the digital copy on my AppleTV for my son to watch. I would have rather paid $30 or $40 for a season then spend my time getting these videos online but at least it will not cost me anything.

http://www.dep-store.com/ProductDetails.asp?ProductCode=77D90VL00
response added Dec 30, 2011 by James Litwin (370 points)   2 3
@skeptech $29 for a 25min episode (that too 10  years old) is really ridiculous. I had to click the link to assure myself that the price you quoted is indeed right and the site was Disney's. How do they expect anybody to buy them?
@skeptech I think this pricing is designed with the thinking that teachers/educators are the primary market.

While I think they should make educational material cheaper (and that teacher ought to be able to use them for free or close to free), I. Suspect they think they may as well scam the education budget as hard as they can.
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I liked most of what was said here, but I want to add this: if I really like your work, I will pay a lot more for it than my commodity expectation. It's true, I do expect some extra value -- but it doesn't have to cost you much. Paying for a signed work or a "deluxe" version with the extended liner notes makes me feel like I got something for supporting you, but honestly won't cost you much to print.

I'm not being quixotic about this or making false claims. I'm just observing my own behavior: I've paid significantly more for free-licensed (By or By-SA) works, supported pre-sale campaigns for the Blender Open Movies, and I've supported several Kickstarter campaigns now. I have _really_ been satisfied with these purchases, and I come back for more.

So, I wouldn't obsess over the price-points. People patronizing projects don't always think in terms of what they "expect to pay" for an item sold as a commodity. They are thinking about supporting your project and seeing things happen because they did that. The physical item is as much a souvenir as it is a commodity recording device. Unique stuff is obviously worth more, and I do find it hard to justify paying more for something when I don't get anything extra. But it doesn't take much to push my bid up if the project is something I care about. I'm often looking for an excuse to spend a little more -- you'd be silly not to offer it since it's practically free money.

So, go ahead and offer a bare minimum CD for the $10 that the poster says he expects to pay. But consider also the "special edition" that might cost $50 or $100 -- more than what people will pay for proprietary stuff. We know it's low volume. We know you need a smaller number of fans to pay more in order to make your work possible. That's what makes it a collectible item.

response added Jan 5, 2012 by Terry Hancock (1,000 points)   1 4 10
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That post should be printed off, leather bound, titled "How you can make money" and shipped to every content producer on the planet. I hear many of them don't like digital goods.

I'll start with movies. Why do people pirate movies? Because legal alternatives are ridiculously bad. They assume that the people that buy the content are those that are likely to share it afterwards. Wrong. People that buy your content either i) do not know how to download it ii) Have already downloaded it and liked it. You're giving people buying your product a tough time, while the pirates out there are offering a way better service.

For example, bluray. I have to buy an expensive player or drive. Then the disk says I can only play it in selected players. Then I get an FBI warning. Then trailers. Then whatnot. Oh, and I'd  have to wait before being able to buy that bluray in the first place. If I can even play it on my computer, no player knows how to play your disk. Your folder contains like a million tiny files, each with a piece of the movie or something weird.

What do the pirates offer? 24/7 digital downloads, totally unrestricted and in glorious high quality. I download one single file, I can play it on any computer I want. There are even players out there supporting various video formats. So I just stick that player to my network, it automatically detects my network drive and magic, I have your video playing with minimum fuss. Now, guess who wins? I pay money for an inferior quality product or I get a superior quality product for free, 24/7, geographically unrestricted? The choice is clear.

I don't know if any of you are familiar with the anime community but scanlators and subbers do a fantastic job. Dubs are ridiculously bad. Subbers are putting up anime episodes on the night they're released! Imagine the speed at which these guys work. Scanlators are even faster. They take a manga (comic) chapter, scan it, clean it up, polish the art quality (essentially redrawing parts of it) and adding cultural references (to help fans understand the context) etc to it and releasing their chapter usually hours after the comic chapter is released in Japan. They're doing a better job than publishers at a much, much faster speed.

Now big publishers do the same things with months or years lateness. Even then, the quality is much inferior. Dubs are bad. Manga books are very expensive. And the choice is very limited. This, versus the online community, offering 90% of the manga published in very good (or at least decent) digital quality, available 24/7 from anywhere in the world, to anyone. Guess who has the better service?

Video games are just too expensive. I'm not paying $60 for a game. I'll pass, sorry. I can afford paying $10-15 for your game, that's it. I second your thoughts, I don't care if you spent $25m doing a game, not my problem. If it's not $15, am not buying it. The pirates are offering the same game for free, with no DRM restrictions, so tell me why I should be buying your product that requires extensive activation procedures and may not even be available in digital download and I'll have to wait for acquiring your product?

Books are another issue. An ebook, as you said, has no paper, ink etc. It should be priced much lower than paperbacks. There are no distribution costs. Even the author can just stick a PDF or EPUB or some other format online, on their own website and have people buy it. All the money goes to you directly, so tell me why you need publishers that will charge people $10 for an ebook? If it's not less than the paperback, forget it.

Also to the authors who think they'll never have their books online as ebooks, you're all mad. Why? Because the pirates already have your books online in ebook format. And by being stubborn, you're not making any money, where you could have made some.

Essentially, pirates are offering a much better quality service than publishers / the entertainment industry is providing. As long as they don't get their game together and start providing a better service than pirates, they're not going to make any money. The Internet provides 24/7 access to goods. Pirates make full use of that.

Now you content producer says I can't access your trailer on Youtube because I'm not based in the US? Or that I can't watch this DVD because it wasn't made in Europe? You're putting restrictions on me where pirates put none. If I can't get what I want from you, I'll get it from other sources. The Internet allows that and makes it very simple.

So a summary, if you want money from me:

1. Remove the restrictions - I want your product in whatever format I want, wherever I want, whenever I want and once I buy it I can do what I want with it, whenever I want. Don't tell me I have to watch it under 48 hours. Pirates would allow me to watch it 10 years later.

2. If you don't make your product available, I will not pay. Worse, I CANNOT pay because the product is not available.

3. If the price is not the one I want or one I do not consider fair, I will not pay.

4. Instead of wasting millions trying to pass bills and sue people, spend those millions coming up with good ideas to compete with the pirates. Offer a better, faster service than them. Put your movie online before pirates. Put your music online, in higher quality than pirates. Put special bundles of your games online, then sell figurines, posters, signed copies from the game developers etc. Sell things that the pirates will never be able to provide as digital downloads.

5. Take advantage of your community of fans: If you a movie producer, get your fans to seed your movie, then set up a pay-what-you-like system to allow your fans to reward you if they liked your content. If no one pays you, does it mean your fans are all cheap or is it that maybe, your content was not worth it? How will you know? Ask them! Twitter exists. Facebook exists. Anyone can set up personal webpages in a matter of minutes now! Make full use of the Internet.
response added Dec 9, 2011 by I B (710 points)   1 1 5

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