The next step in Zuffa's Pirate strategy?

(YAR! Zuffa be coming for us so scrub the keyboard you damn dirty swabs!)

Earlier this year Zuffa announced their intention to go after pay-per view pirates, which they followed by promptly suing a Boston area bar for allegedly showing an illegal stream of UFC 104. Zuffa followed that lawsuit with another against a website operator who, according to Zuffa, charged money for access to illegal streams of UFC events.

With two lawsuits filed (and made public) Lawrence Epstein, the UFC's general counsel, talked to MMA Junkie about what this all means:

"I'm hopeful that at some point in the near future, we're going to see a decided downturn in this activity. But I can tell you that we haven't seen a decided downturn (at this point); that's for sure."

...

Epstein said subpoenaing the IP addresses and usernames of online pirates is still "absolutely" possible.

"I wish we didn't have to do this, but this is the reality we deal with," he said. "Everybody is part of this crime, and obviously there are those that fulfill different roles, but everybody is part of it."

As of this moment, Zuffa hasn't crossed the Rubicon of taking legal action against viewers of streams, instead favoring legal action against the providers. Yet that strategy has its limits as many websites and streams are located in net free zones like the Caribbean, Scandinavia or tribal lands, which are outside our legal jurisprudence. As WKR said before, "If Swiss Bankers and online Poker have taught us anything it is that one nation's crime is another nation's economy."

This reality will eventually lead to no other choice but subpoenaing IP addresses, which in turn leads to lawsuits against your fans. Such an action would mean that Zuffa would have unofficially adopted the music industry's strategy from the beginning of the last decade (that didn't work out so well). In that instance the rationale was to create a deterrence to stop people from pirating. Yet as we've seen time and time again deterrence is an ineffective way of altering behavior.

Publicly Zuffa is failing to address the question of "why people pirate". While there will always be individuals who will steal, this population of pirates is ultimately made up of fans of the UFC. Thus the promotion should explore (a) why people are choosing illegal means of viewing and (b) how to provide an incentive for pirating fans to switch to legal viewing.

WKR previously addressed this issue and even offered a solution:

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.