Zuffa Plans to Sue Internet Pirates

MMA Junkie has a new report detailing the UFC's plans to go on a legal offensive against Internet pirates.

We've seen this script before with the music, movies and television industries as the power of technology surpasses the old barriers of distribution.

While Zuffa is entirely within their rights to protect their intellectual property WKR isn't so sure that suing fans who are viewing the illegal content is the best long-term strategy. It would be far better to target host sites and streamers themselves but even then you may be fighting a losing a battle. If Swiss Bankers and online Poker have taught us anything it is that one nation's crimes is another nation's economy. Certainly small nations, even sovereign Native tribes within the U.S., could begin setting up hosting services and directories that break no laws within their judicial borders. That would leave Zuffa with no choice but to take legal action against the fans, which, while justified, leaves a sour taste in everyone's mouth not to mention with questionable results.

Joe Rogan made this very point, albeit in more ambiguous terms.

"I think that kind of stifles innovation," Rogan said. "It stifles the direction the Internet is going. I like things being out there. I think people are always going to buy UFC pay-per-views. You're going to get a much better experience watching it on your television than all stretched out looking fuzzy and pixilated.

"They're trying to protect their money, but the Internet is a strange animal."

Rogan is correct, the Internet is a strange animal and is most apt for comparisons to the ancient Greek myth: the Hydra. Information on the Internet has the ability to move, shift, hide and then sprout out in many places at once; similar to the multi-headed Hydra, who simply grew more heads as they were loped off.

For instance, in a recent testimony to the U.S. House Judiciary Committee Lorenzo Fertitta claimed that the UFC 106 broadcast had 271 illegal streams with over 140,000 viewers. Does that mean that there were a total of 140,000 viewers who would have bought 106 or does that mean that 590 people bounced from stream-to-stream as they went down? Both are extreme views and the reality is somewhere in the middle --there are probably more streams and viewers out there than what Zuffa reported-- but the point is that information online is fluid and organic, making it extremely difficult to control.

Zuffa and the UFC should be exploring how to take advantage of this new technology, similar to what Apple did with the Music Store.

Already they offer streaming backstage footage as well as the option to buy pay-per views through UFC.com or Yahoo.com but these streams cost the same as traditional television purchases. According to Epstein that Internet price cannot be lowered due to Zuffa's contracts with PPV providers. 

In other words DirecTV and DISH Network don't want to their piece of the pie undercut by online providers.

But that doesn't address the fundamental reason why people pirate UFC pay-per views: the entrance cost is too high for individuals. Not everyone utilizes the "party system" that UFC officials often discuss and not everyone has the ability to watch events at bars. For the lone individual who wants to watch a pay-per view event but can't afford a fifty dollar entrance cost piracy is a simple remedy. Of course, there are always people who will steal just for the sake of stealing. Zuffa should be exploring how to disincentivize these people from using the pirated feeds and incentivize their entrance into the pay for view population.

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 to argue that they have X amount of annual pay-per view buys for 2010 beginning in January.