Leveraging Piracy in Business

With the increasing reach and availability of the internet, almost every computer the world over is in some way connected to another. This is a beautiful concept, as after the rail roads, nothing came closer to making the world a smaller place than did the internet.

New businesses started, many businesses grew, and yet many more businesses flourished. But not all businesses saw this as a welcome change. The industries related to music, movies and video games have suffered huge financial losses just because any computer connected to any other computer anywhere in the world can share a file. The problem is as simple as that. And whatever protection a company places over its hardware or software, there is always someone who can crack it open and violate copyright laws.

Music can be downloaded illegally, pirated movies are a very old phenomenon, and video games, the only form of interactive art, where human creativity is challenged the most, have not been spared the evils of the internet.

These industries have tried to fight against privateers, and spent millions more in the process. However, could businesses have maybe thought differently? Can the companies leverage the concept of piracy itself?

Here are cases of two successful strategies that used piracy to make their brand better known:

Arctic Monkeys:
This is an English Indie Rock music band that formed in 2002. As an independently performing band, they did not have much money to start out with in the first place. So, instead of going through the normal route of first trying to find a record label to publish their music, they decided to complete a full album, and release it over the internet. For free! They let their songs spread across the internet, and left it to any consumer who loved their music to go ahead and purchase physical or digital copies of their album.

If you are skeptical about the success rate of such a strategy, I would like to point out that my room mate from engineering days fell in love with their music, requested their albums be bought as birthday gifts, and even picked a post grad institute where he knew the band would perform live!

Batman - Arkham City:
Developers RockSteady have been in the video game business for a long time. They have faced issues of piracy, and know how dirty it can be. With the release of the second installment in the hugely successful Batman video game series, they did something different with their in-game code.

If they stopped piracy entirely, they knew that they would lose a lot of gamers who may turn out to be potential purchasers of their content. So, instead of stopping piracy entirely, they introduced a bug in the game that would let the gamers progress through a certain portion of the game.

There comes a point in the game where, as Batman, you are escaping a villain, and you come across a section that requires you to fan out your cape and glide through the air like a bat. However, you realize that you suddenly can no longer open your cape up anymore. The feature works like butter until this section of the game, and just when the story gets really interesting, you just can not open up your cape.

Though this may create frustration, the game developers were quite clever to introduce this bug in that part of the game that really drew you in. You really wanted to know what would happen next. And you may just go ahead and buy the game, because you were loving it.

Again, don't believe this works? My colleague at work experienced this exact same thing. He was stuck in the same place, tried to find solutions online, found a whole community complaining about the same bug, and there was no work around. So he just went ahead and bought the game.


Well, businesses can and should think differently if they want to survive in an ever changing world. Think about how they can over come difficulties in a different manner and flourish.

Engaging the Customers in Effective Ad Campaigns

You generally get to hear about major scale, high spend advertising campaigns. Recently, Samsung has re-branded an airport terminal itself to promote it's high end smart phone, the S5. Though this is an extremely expensive campaign, I am a bit skeptical about how much customer engagement this really generates.

Now, I am going to talk about two other really expensive advertising campaigns, both in the Video Game industry, that has successfully generated a huge crowd response, and involved a lot of customer engagement.

Mass Effect 3: Space Edition
The third installment in BioWare's hugely successful Mass Effect franchise was much awaited by millions of fans. To give a very brief background context about the game, it is set in space and involves you, as a human, to embark on inter-galactic travel and interact with alien species, to win their support in helping you fight off an impending doomsday attack by an ancient alien. As such, the entire game is set in space. The attention to detail, and the high quality of the game led to a very large consumer base for this franchise.

On the run up to the launch of the third installment in the series, BioWare announced the Space Edition of the game. A week prior to the official release of the normal edition game, they would release six copies of the Space Edition into the air using high-altitude weather balloons. The games are encased in specifically designed payloads, including HD cameras and GPS monitors that will help gamers track and secure the copies. The cities selected for the campaign were San Francisco, Las Vegas, New York, London, Paris and Berlin. The game website provided the calendars with the launch dates in each of these cities, and also up-to-date tracking information of the game copies.

Hundreds of hard core gamers set up camp in places they expected the copies to land in. After all, who would not want to lay their hands on a copy of such a specially launched game? This ad campaign generated a huge buzz in the gaming community, and Mass Effect 3 released to one of the best openings in its time, leading to sales of millions of copies of the game.

Watch Dogs
This is a soon to be launched, much hyped and much awaited product by Ubisoft. The game's setting is about a government refuge who gets falsely implicated in a conspiracy, and loses his wife in the ensuing events. He sets out to take revenge using technology. He uses his mobile phone to hack and access anything over the internet at the swipe of a finger. The player controlling him can take over street cameras, hack into ATMs, unlock cars, turn off the power grid, and just about anything you can think of.

Now, in order to promote this, Ubisoft set up a mobile repair shop on a street corner, and deployed one of their men to run it. When people walk in to get their phones repaired, he goes into the back of the shop, and comes out in a few minutes telling them that he installed a special software for free for them. To give a demo, he touches a button on the phone and the lights in the shop go off. He touches again and the lights come back on. This piques the customer's interest. He then takes them out of the shop, and walks over to a parked car and swipes on the phone again. The car unlocks and the alarms set off. He switches the alarm off using his phone too. He then takes the customer over to an ATM, and by using the phone yet again, the machine starts spewing out cash and people on the footpath rush to collect the notes.

By now, the customer is truly amazed. The man then hands over the phone to them, and directs them to use the software. When the customer touches a button, all the street lights on the road go off. Then he points them to the traffic lights, and when the customer uses the phone, all the lights go green. Cars on the road go berserk, and meet with an accident. The police soon turn up, and the man points to the customer and tells the cops that this person was responsible. The cops come over to the scared customer, take the phone from their hands, and show the screen to them.

The phone reads, "You have just experienced what all you can do in Ubisoft's WatchDogs". The customer is left speechless.

Now, which person in the world, whether a gamer or not, will not buy this game just by knowing that they were a part of it?

I have recently read a news article about these game developers who have gone ahead and put real world people from the streets into the game world. Now if I happened to be in the game, I would love to go buy it!

Marketing to the unreachable customer

I always wondered about myself as a target group of any kind of advertising, via any form of media. To tell you a little bit about myself, I would say that I am a very difficult fit for most marketing people.

I almost always change channels during advertisements on the TV and radio, I don't even glance at ads in the news papers, and even when it comes to electronic media, I have installed an Ad Blocker in all my web browsers. Using this, I never watch an Ad on YouTube, or Facebook, or anywhere at all.

Even when I go out to malls to buy groceries, etc., I do not go by the brand name, or the advertisements. I almost always do my own cost and benefit analysis by looking at the prices, ingredients, etc. Even with my own Honda bike, I went for it because it is a Japanese product, and I really believe what they do is among the best. I knew how much I wanted to spend, and what specifications of the bike I was looking at, and then took it for a test ride. No advertising affected my choice.

Basically, I do not believe what companies advertise. I have it set in my mind that it's just promotion of a product, and may not really reflect what the product is really capable of. I have a poor recall value of brands.

So I was thinking of this, and it recently struck me that there are ways to reach potential customers like me as well. And this is related to a video game retailer called 'Best Buy'. I was playing this racing game, which is set in an open world. You race in a city, with buildings all around you. I noticed that some of the buildings within the game were named 'Best Buy'. 

I feel that this is one of the most effective marketing strategies ever. Because I am of the target group, I am interested in knowing about the retailer as I would definitely be buying more games. Best Buy has managed to reach its potential customers in a way that the customer cannot really avoid noticing their brand logo. Also, the customers will not get irritated by it, because they are performing actions that are pleasurable to them while they see the brand logo.

This concept amazed me. Though, I cannot comment on the feasibility of using this strategy by every company, of delivering your brand name in a moment of concentration and pleasure for the customer.

Thousands of dollars are spent to capture the advertising spot during the Super Bowl, while the intended target customers are using the restrooms after consuming liquids during the game. They never get to see the advertisements. Companies need to be more clever in the way they reach customers.

I believe that if a company could reach me, any company can reach many more customers.

Business of getting the crowd to do your work for you - Gamification

In this day and age, most businesses know that the only thing important for it to survive is to constantly be on the minds of people. And with the advent of the smart phones and consumers having an always-on connection to the internet, it has become all the more important for businesses to make use of this platform to reach the masses. Most companies are coming up with innovative ad campaigns to have their brand be talked about all the time, multiple times, and hope that they stay in a good light.

However, let us have a look at one company that is not spending a penny on advertising, yet is reaping ship-loads of money by having consumers the world over do their work for them. This company I am talking about is Google, and here are three instances detailing how they achieve this feat. Google resorted to Gamification, that is, a method of using an incentive system to keep the participants interested in the continuing to perform some tasks.

Google Image Labeler:
Google had a huge library of images that it sourced from all over the internet. However, it was faced with a problem. These images did not have labels to them. The Google Search Engine did not know that a particular image could be retrieved when a user typed a particular image name.
So what Google did was, create a game, where any two people play a game over the internet. In this game, an unlabeled image is presented to both the gamers. The moment one user starts typing the description to the image, the other user will have to follow typing as closely as possible with the same description that the first user intended to type.
For example, if the image was of a glass of water, the first user could start typing "G L A S S". The moment the user types a "G", the second user must guess what he must be typing, and also start typing "G L A S S". The closes he is to the first user, the more points he gets.
In case the first user started typing "W A T E R", then the second user would have followed with the same description.
So in the end, a particular image that Google did not know the label of, ended up having multiple descriptions. In the example, it is "Glass" and "Water". And from then on, when a computer user searches for a "Glass of Water", Google would most likely retrieve this image and display it.

Ingress:
Google Maps is a pretty robust application, with a very good set of up-to-date maps. Larry Page, in order to test out the feasibility of creating maps when he first conceptualized the idea, had set out around Palo Alto with a camera in hand, and just drove around the city, recording it all. Google employs personnel to drive around cities around the world and record them.
However, they are now testing a different approach, through the use of a smart phone game called Ingress. In this game, players who sign up for it, are teamed up randomly with others. These players can join one of two factions, both pitted against each other. Ingress gives you a location that you can walk over and use your smart phone to indicate that you have reached the place. If a gamer belonging to one faction reaches the place before one of another faction does, the earlier gamer's entire faction score points.
And while a gamer was walking over to the location, Google was all the while recording your speed of travel, the short cuts you were using, etc. So basically, it is using the gamer to map out the best way, or at least the most frequented way, from point A to point B. This path may not necessarily be the same as what Google Maps indicates.
Hence, Google is intelligently mapping out an even more robust application using the consumers.

ReCaptcha:
If you have ever purchased anything or registered anywhere online, you would most likely know what the ReCaptcha code is. There are basically two words that you need to type in order to show you are a human and not a bot that is registering.
Of these two words, only one of them is a word that the computer knows the meaning of. The second word is one that has been scanned from a physical book, and Google could not translate into a digital format yet. When you type the known word correctly, the software assumes that you are going to type the second unknown word also correctly.
When a few thousand users type the same word for the unknown image, the software then knows the actual translation, and converts the physical copy to a digital one. All the work has been done by the users without them even realizing it.

The last case does not involve the concepts of gamification, but is similar in concept to the crowd sourcing techniques Google employs to run its business. As a business, it becomes extremely important to think out-of-the-box, and do more things at as less a cost as possible.

The Three Titans of Gaming

I would like to share my thoughts on the video gaming industry.

Just to give a basic background, Sony's PlayStation, Microsoft's Xbox, and Nintendo's Wii are the major gaming consoles as of today. Nintendo has enjoyed monopoly for over two decades, and then Sony and Microsoft joined the fray and started commanding a very respectable market for themselves over the last decade and half.

These are the only three players in the market right now, and each has created their own brand image: 

- Nintendo catches them very young with games that are very much fun to play. And they then cater to gamers who grow older by integrating elements of play from their childhood into more mature themes. They are by far the most ingenious game developers, and keep working on new technologies and intuitive gameplay. I personally believe that the Japanese are the best sort of people when it comes to dedication to whatever needs to be done.

- Sony caters more to gamers from the teenage and above. They are very developer friendly, as in, they have very good policies when it comes to third party game developers who want to contribute to the gaming world. Also, Sony ensures loyalty by providing a lot of freebies and discounts, especially free online gaming (this is now one of the most popular forms of play - multiplayer via internet). Sony caters more to gamers who are interested in core gameplay, rather than graphics.

- Microsoft has captured the market that is more interested in graphics. They have really good hardware for this. They are not so friendly when it comes to third party developers though. They charge very high fees to allow them to sell their games on the Xbox platform. But, since many developers first code on the PC, it is easier for them to port the game over to an Xbox, as the architecture is similar.

Since the players are very few, I believe this falls under the oligopoly market. And even though they cater to basically different kinds of gamers (market), most of the games are released on all three platforms. It is only those games that are developed in-house that differentiate them from each other.

Now, we have discussed that a technology change in one product will result in an almost immediate introduction of similar technology in the other products. But, the life cycle of any video game console ranges from 6 to 10 years, during which only support can be provided to the consoles, along with changes pertaining only to storage size. For example, Sony's PlayStation 3 released with Blu-Ray disc technology in 2006, whereas Microsoft's Xbox 360 released with DVD readers in 2005. On a Blu-Ray disc, developers could fit in an entire game on one disc, and utilize extra space for more details. Whereas, the same game would need to be released on 3-4 DVDs for the Xbox. Now, Microsoft could only watch this happen, and not change anything at all, since the games were already being made, and it is impossible to shift to new technology. So, they had to wait till 2013 (8 years) to release their new version of the Xbox with Blu-Ray technology, but this is already stale news.

If we need to consider an off-shoot technology innovation, the Xbox rules the market when it comes to motion gaming (where cameras detect your body movements and reflect the actions on-screen). This was started by Nintendo, and copied also by Sony. However, one must understand that this was done only to capture the family entertainment market, and most core gamers do not care one bit for motion gaming. After all, who wants to exercise while getting entertained? :)

Now, let’s discuss about one player eating into another player's market share. Up until now, this has not happened in the gaming industry. However, both Sony and Microsoft are on the verge of releasing their new consoles. Microsoft has received extremely bad press by the way they have tried to project the capabilities of its new console (they made the mistake of projecting a gaming console as a family entertainment hub - but to an audience of core gamers who were very loyal to the company. The audience was sorely disappointed with this new direction. Also, Microsoft implemented many policies which are very much against the mentality of a gamer). Sony jumped upon this chance, projected every negative point about the new Xbox as a positive point of buying the next PlayStation. And I have read today that there was a poll taken for the general public (i.e., the casual gamers and even non-gamers), and the results for opting the next console weighed heavily on the new PlayStation. Even many previous Xbox loyalists have switched their choice to the PlayStation, just because of one very bad press event. This has caused Microsoft to revert on every single change they wanted to make.

Now, when it comes to pricing of the products we have discussed that pricing is mostly similar or else price wars may trigger. Sony and Microsoft were pricing their current consoles at very comparable prices. But now, coming to the new console, Sony has actually priced it at 100$ lesser than what Microsoft wants to charge (400$ vs. 500$). This has generated even more immense goodwill toward Sony. This may be an initial loss to Sony, but consoles sell in the millions (to give an idea, the PlayStation 2 holds the record of selling 144 million consoles; the PlayStation 3 has sold 85 million consoles to date worldwide).

So, I understand that circumstances can change the position of a player at any time. Branding and focus on what is the ultimate goal is most important, even though you may enjoy profits currently by your way of operations.

Games are locally produced and distributed in the US. They are priced at around 60$. However, when it comes to international markets, they charge 80$ in Australia (they have no choice but to buy the games), and only 2500Rs. – 3000Rs. in India (much lesser than the conversion rate). So, I understand that there are strategies based on the kind of market you are entering into also. As in, Indians are never willing to pay too much in general.

Just to share a fact about the gaming industry. The total revenues and profits of this industry are far higher than that of the Hollywood industry. For example, in 2011, Gaming industry generated 17.02 billion $, whereas Hollywood generated 9.42 billion $.

Grand Theft Auto 5 was made on a budget of 265 million dollars, which is more than any Hollywood movie ever made till date. They had 7 million pre-orders, and made revenues of 1 billion dollars in just 3 days, which is a record in the entertainment industry of any form. However, I have read that 50% of this goes to the video game producer, and most of the rest goes to the retailers. So the company is yet to realize a profit.

There is a huge market for it, and India is currently an untapped market. The only foray has been into mobile platform. 

Androidomeda

The alarm clock rings next to Jack at exactly 6 am. Born out of 15 years of habit, the first words out of Jack are, “News, Please.”. A clear, female human voice instantly rattles out the results of the football match Jack missed the night before as he was too busy at work, followed by the most up-to-date news about the health care industry, and finally finishes off with the latest investor sentiments of the drugs company he has been a CEO of for the past decade.

During the five minutes it takes for Jack to listen the news tailor cut to exactly what he needs to know, Jack slips out of his pajamas and into his track suit, not forgetting to strap on his smart watch. The watch analyses his body temperature, runs a check against his medical records, and within seconds, charts out the work out plan most suitable for Jack’s 55 year old physique.

Jack goes out for a jog in the clear, crisp morning air, shouting out greetings to his neighbor John,  and John’s pet bot, King. King runs along side Jack for a few meters, and suddenly bounds forward. King stops in its tracks and indicates Jack to do the same. Jack sees that the reason for King’s behavior was the approaching Bolt, the latest driver-less electric car from the stables of Toyota. The Bolt also slows down and stops, and flashes it’s lights for Jack to cross the road. Jack knew that both King and the approaching Bolt used the internet and various built in sensors to figure out that they all need to come to a stop in order to avoid any untoward incident from occurring.

Jack returns home after a healthy workout, and the door of his two storied house opens up. The temperature inside the hall has already been set to keep Jack comfortable when he returns, having received his body temperature from the watch Jack had worn. When Jack slips into the shower, he is pleased with the temperature of the water, also set neither too high nor too low.

On his way to office in the Zeus, his own driver-less electric vehicle made in Germany, Jack glances through all his work mail, which has already been sorted on what would be most important for him to read, based on the content present in the mailers. Jack experiences the least of troubles in reaching work, as the Zeus takes him through town in the path taking the least time. As Jack sits on his desk, all the relevant reports are already pulled from the cloud and downloaded onto his screen.

And thus beings another long day at work for Jack.

Is this story for real? Well, if you ask anyone this question on this same day, another couple of years from now, you would receive a resounding ‘Yes’ as a reply. Google has stopped being a search engine many years ago. It is now a powerhouse. In the recent past, Larry Page has overseen acquisitions like he was building a fantasy kingdom with everything he could dream of having a Google tag on it.

DeepMind Technologies, an artificial intelligence company; Nest Labs, Inc a smart thermostat maker; Tesla, an electric car maker; and the list goes on…and on….and on. Google is definitely making use and driving the concept of The Internet of Things. It will probably soon control everything we own, and if not, it will definitely soon be making everything we still don’t know that we cannot live without.

Are we ready for this? I feel the real question is, does it really matter? Let Larry Page live out his dreams. It is only making my life easier. I am not yet sure if I should ponder whether it is becoming a bit too easy for my own good.