More on the UFC's Piracy Action and future of Internet Streaming

With Zuffa ratcheting up the rhetoric against online streams and suing a Boston bar over an illegal stream it is time to revisit that old issue of Internet piracy.

Internet piracy and how a company responds to it inevitably leads to comparisons of the music industry in the late 90's.

Nicholas Deleon of CrunchGear.com brought up this point

It was only a few weeks ago that I first made mention of UFC's efforts against piracy. The gist of the argument was, just let it happen and concentrate on maintaining the company's momentum. The UFC doesn't want to end up like the music industry, having sued its fans into indifference, if not antagonism, toward its product. It seems to me that, in the interest of the greater good, the UFC should ignore the streams that pop up. The greater good, of course, being continued and long-term growth at the expense of short-term profit (or, worse, revenge, because the tone Dana White has here screams nothing if not vengeance.)

(Keep in mind that there's no telling how many of these illegal streams are set up overseas where copyright laws are non-existent. There's no telling how many of these streams are watched in countries where the local population has no other exposure to UFC, where they can't buy an official stream for $10 per show. Why not let these people get a taste now, and in a few years' time, when you've built up an international distribution infrastructure, come in and offer them legal ways of watching your content? Maybe hire Shane McMahon to figure that out? What, the ol' "I didn't pay for this before, so I'm not going to pay for it now?" song and dance? Those people aren't your fans, nor will they ever be. Don't worry about them.)

Quick note: that $10 per show stream comment isn't accurate as the online streams for pay-per view fights cost the same amount as the television feeds.

I don’t want it to sound like I’m defending the streams, I’m merely saying that it seems crazy to me to risk becoming the RIAA of this decade in order to prove a point. The UFC has every right to go after people who pirate its content, but it really ought to think about wether or not it’s even worth the trouble. Lawsuits didn’t eliminate music piracy. No, it was the proliferation of easy-to-use, legal alternatives (initially iTunes several years ago, and now things like the Zune Pass and Spotifiy and Pandora) that marginalized music piracy.

Luke Thomas of Bloody Elbow made this argument earlier, but there is danger in creating an iTunes style store for live pay-per view fights. The result of legal MP3 purchasing software, like the iTunes store, has been the death of the album as our society now purchases singles almost exclusively. It isn't hard to imagine that such a model adapted to pay-per view streams would have similar results, where fans only buy 2 or 3 fights out of the 15 available.

The packaging of fights is important for a promotion like the UFC as it provides a means to introduce the audience to new fighters and drive up their future marketability. Would anyone have ever watched a Jon Fitch fight prior to his bout with Diego Sanchez had a pay for single fight system been utilized? Probably not. But now Fitch is the #2 ranked welterweight in the world.

While internet streaming technology is obviously the future an iTunes store would probably be the wrong approach for the UFC. Rather a packaging system with discounts for quantity of events bought would be a better system. WKR already talked about this concept:

Perhaps Zuffa should explore the option of pay-per view packages. For instance buy three pay-per views in advance for a 5% discount or one could buy a years worth of pay-per views for a 10% discount. In this manner Zuffa could also attach the long rumored WEC pay-per view packages into these discount packages. This is similar to the subscription strategy used by World of Warcraft and Xbox Live.

Such a strategy would make a more robust fan-base as people who are looking to save money would buy longer packages at a perceived reduced cost and diminish the volatility of pay-per view purchases. It would also grant great marketing information for the UFC to leverage as they would be able

One could also attach preliminary purchases to the standard pay-per view purchase for fans who really want to see all the fights. This could threaten DVD sales (which are eventually going to disappear anyway) and the live gate product but if priced correctly could generate the company even more revenue.