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Protecting from Piracy
"Typically expect that your losses due to
piracy for unprotected products will be equal to your current (or
projected) turnover of unprotected products. I.e. 50% of your sales are
typically lost to piracy. Losses are likely to be much higher (i.e. sales lower)
if your products become available in Kazaa, eDonkey, Overnet etc."
The table below is based on typical figures
from a large number of companies of these sizes who have come to us over the
last few years with plans to sell digital content.
| |
Income from
unprotected products |
All costs
including staffing, advertising and overheads |
Additional
income from protecting products |
Typical
additional cost of protecting products |
Effect of
DRM/Anti Piracy measures |
| Low -
scenario 1 (optimistic): Small web site selling (or planning to sell)
~1600 downloads a month of 99c product (or ~80 downloads or subscriptions
a month of $20 product) |
$20,000 p.a. |
$10,000 p.a. |
$20,000 p.a. |
$5,000 p.a.
(Full cost spread over 3 years) |
Increases
profits from $10,000 p.a. to $25000 p.a. |
| Low-
scenario 2 (realistic): Small web site selling ~1000 downloads a month
of 99c product (or 100 downloads or subscriptions a month of $20 product).
This is a very typical scenario for digital content where the seller is
waiting for a profit before deciding to protect the content and instead
goes bust or closes down the web operation and rights off the investment. |
$25,000 p.a. |
$30,000 p.a. |
$25,000 p.a. |
$5,000 p.a.
(Full cost spread over 3 years) |
Increases
profits from $5000 p.a. losses to $15000 p.a.
profit. |
"Piracy protection is a major factor that
determines profitability. Case studies from literally dozens of companies show clearly
that waiting to be profitable before protecting content will
make your project fail."
"Intelligent shareholders, investors and
managers are now fully aware of this factor and will make additional budgets
available to prevent this waste of time and resources due to poor implementation
and understanding of market dynamics."
BHR Content Protection Report
2005
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