P2P File-Sharing Ruins Physical Piracy Business
If the likes of the MPAA, RIAA and IFPI are to be believed, file-sharing is causing worldwide havok, costing billions of dollars and creating unemployment. It’s true that some people are feeling the P2P effect; they’re called ‘physical pirates’ and one of them says that file-sharing has ruined his business.
Tony started his life of piracy sometime in the 1990’s working markets, car-boot sales and pubs in the UK, selling counterfeit PC applications/games and console discs for a fraction of the retail price. “The profit was amazing back then” he recalls “We were getting £25 ($48) for a couple of PSX games and £15 ($29) for a single CDR with the latest utilities on. We couldn’t make them fast enough.” Things were looking good for his little enterprise and before long he was clearing up to £1000 ($1,942) profit each week.
According to Tony, the first 2 hours of every Saturday and Sunday morning at the local flea market always proved the most exciting. “We’d take 60 cases of CDRs down in the van and as soon as we got there a crowd would swarm around us. We had no competition and it was obvious the punters had no other suppliers. Inside 30 minutes, 90% of the stock would be gone with some customers taking 2 or 3 cases each, presumably to sell on. After 3 hours we were cleared out and on our way home, always with huge amounts of money.”
By 2001, Tony was renting a factory unit and employing 3 people to operate duplicators 24 hours a day, 7 days a week but although business was lively right up to 2004, profits were being squeezed every year. Forced to increase the amount of media burnt each week to make up for the shortfall in profit, it became clear that the business was in trouble - demand was falling dramatically.
“In 2005 we shut down the factory unit” said Tony, “we just couldn’t keep going on that scale, nobody was buying anything in quantity anymore. So we closed up and moved back into a bedroom at home with my wife and her sister operating the burners, something they hadn’t done in years. They weren’t happy.”
Tony used to enjoy the finer things in life - a beautiful house, high performance cars, exotic foreign holidays, up-market restaurants and fine wine. I met him by chance, wearing overalls and sitting on a forklift truck, working in a factory manufacturing boxes. Sipping on a mug of tea he explained “We got to the point where we just couldn’t make ends meet anymore, I couldn’t even keep a couple of dozen burners going so that was that. I had to get a job and so did my wife. She’s gone back to hairdressing and i’ve come back to what I was doing before - warehouse work. We’ve moved to a smaller house and i’ve had to get a sensible car. Things have changed quite a lot.”
Tony is very clear about why his rags to riches story has gone back to rags again. “File-sharing, P2P - call it what you like. When you asked a customer why he wasn’t buying anything, 9 times out of 10 it was ‘BitTorrent this, LimeWire that’. Add that to the fact that huge numbers of PC users have burners and fast broadband and its obvious why I had to get out and earn a living another way. We had it good for a while but I don’t think those days are coming back.”
P2P is a very powerful machine and although Tony could see that his operation was feeling its effects, he admits that he sat back and did nothing about it and consequently, his business has paid the ultimate price. Other industries affected by P2P should take note: Don’t be a Tony. Overhaul your business model. Quickly.
Previously: Is Piracy OK if the Property isn’t Intellectual?
Next: Mosts Popular DVDrips on BitTorrent (wk11)
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Interesting point. TV companies need to begin to accept on demand media is the way we need things to be.
Kind of interesting. If a bootlegger can’t make ends meet because of p2p, then what about the real SW producers?
downloading media dosn’t prevent anyone from buying it… Software producers will always have a market. Especially when you are a company that can’t operate on pirate software.
REAL software producers license GPL or GNU, xen ix. Shoot, look at Mozilla. Free stuff can still be massively profitable… just make something the users want that works.
No king rules forever. He rode a wave longer than he should have and spent his money way too fast.
Should’ve anticipated that his sunny day was going to be followed by a thunderstorm ;)
Interesting. I was doing the same in the 1990s. The first burner I had was 0.5X and the size of a large home theater amplifier. In those days I couldn’t make the CD-Rs fast enough, but the blanks were $20 a piece back then and every time one turned into a coaster you’d want to cry. Still, I was selling them out at $50 a go, and I would get the same - whenever I turned up at colleges to sell them I would get a huge swarm of students wanting to buy a full CD-R of apps or games.
I ran an FTP server hidden in a computer lab of a big college and connected to the outside of their firewall. All the pirate groups would use it to share their releases and I would just go into their folders and take what I wanted. At the time it was probably one of the biggest “warez” servers in the world. At one point there were over 1000 couriers logging and moving stuff.
Anyway, a 0.5X burner meant 2 hours to burn one CD-R. So I had to run it 24 hours a day. I’d wake up every 2 hours to put in a new blank.
I didn’t get much sleep, but I did get a lot of money. I was a “poor” student taking home around $4000+ a month.
Maybe he should start an internet business, selling software. When people decide to pirate them, enhance the software until people find a way to get past it.
[quote comment="65695"]Kind of interesting. If a bootlegger can’t make ends meet because of p2p, then what about the real SW producers?[/quote]
The ammount of people didnt exploded. People just shifted from buying it from local pirate store to downloading it. Hacking software DOES reduce profit from the real SW producers but the it’s not like they are not making any money now.
Here’s a crazy idea…put some bands together that people actually want to see live and make money off of the ticket sales. Play some songs only in concert and don’t put them on the cds to increase draw and make the revenue up through product endorsements. Or…sue every one of your customers until they boycott the industry all together.
Heh, the only thing I took from this story is that there are people that can´t properly manage their money
I can’t help but feel great disdain while reading this article. Part of me wants to think it’s just made-up hype to draw readership… another part of me believes it to be true. Either way, it makes me want to strangle someone.
If you ever share an IRC channel with software “pirates”, try asking what they think of people who sell warez. I don’t have a problem with P2P networks or any other digital means, as long as it’s free. I take great offense when someone profits off of piracy, because they are doing absolutely nothing good for their community, just leeching out of pure greed. I used to run a little shop and a few people would come in every week or so to buy tons of blank DVDs, so much that I chose to enforce a limit per customer to try and control my stock. Those sharks countered my efforts by sending their spouse/buddy for extra loads… Once I caught on, I barred those customers from my shop because the thought of them selling copied movies at $5.00 a pop just disgusted me. Download them for yourself, share with your friends/family I don’t care, but if someone makes a living by selling pirated software/movies/music I think they should be hung by their balls and pelted with blank discs! At least drug dealers actually have a product… yes I think bootleggers are even lower than drug dealers!
God, what a moron. He made bank for 15 years and obviously didn’t invest a dime. He could be retired now had he actually saved some of that money instead of blowing it all. Now, he’s working in some warehouse. Dumbass.
After I read the story, I was just thinking the same thing. What a complete idiot. All that loot coming in, and none of it put back for a rainy day - that is the least he could have done. There are a bazillion ways he could have invested it, including turning a portion of it back into his own business to keep him on the forefront of developing trends that effect his business.
You see, that’s the problem with most people committing crime, they are amateurs. They do not understand that crime is only a jump start, a stepping stone; the fast track to bigger profits when you turn legit later on. There is no successful government or corporate organization in the world that did not go through it’s illegal phase to become the powerhouses we see them as today. Why else do you think they pass laws? To make it harder for the next guy to come along using the same tactics they used and usurping their positions in the world. Duh.
So this idiot has 15 good years as a criminal making money hand over fist, and doesn’t stop to think for one moment that it could all dry up one day and that he should prepare against that day.
N00b.
Graft and Corruption always has pretty good profit margin when compared to legit business….
He should have thought laterally and put his wife and sister into prostitution. Great money there, you just have to wake up every 2 hrs to mop them out…
sounds like total bs, if this guy was just selling pirated stuff for cash, whats he actually gonna be able to do with “cash” perhaps buy yourself a meal at mcdonalds, some small shit, the second you try to by a car or a house or a factory with this cash, the tax departments after you, so really you cannot run an illegitimate business and expect to live the life of luxory. and as for this story, this is all made up clearly.
Excellent article enigmax. Definitely food for thought.
Whether this story is completely true or not, if you visited boot sales you would know this stuff was going on and big profits were being earned. It makes me sick but at least it has a happy ending :)
Tony is real, his history as a pirate is real and his current position is real. I’ve been asked by a German radio station to approach Tony (real name btw) to do an interview, so you may be hearing more from him if he agrees. Thanks to all who have left feedback, it is appreciated.
Poor guy. I almost pity him. Not.
To be honest, I can’t feel sorry for someone who was doing something illegal in the first place to earn all of that money. The fact that he apparently blew it all on a nice house and nice cars is his own fault. Most people work for their living like he is doing now rather than taking advantage of the ability to get music, etc. for cheaper than retail and reselling it for close to retail anyway.
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