The Piracy Paradox

23 September 2007

James Surowiecki, who wrote the highly recommended Wisdom of Crowds, has a great article in the New Yorker on the economics of the fashion industry and its notably weak intellectual property laws.

The paradox stems from the basic dilemma that underpins the economics of fashion: for the industry to keep growing, customers must like this year’s designs, but they must also become dissatisfied with them, so that they’ll buy next year’s. Many other consumer businesses face a similar problem, but fashion—unlike, say, the technology industry—can’t rely on improvements in power and performance to make old products obsolete. Raustiala and Sprigman argue persuasively that, in fashion, it’s copying that serves this function, bringing about what they call “induced obsolescence.” Copying enables designs and styles to move quickly from early adopters to the masses. And since no one cool wants to keep wearing something after everybody else is wearing it, the copying of designs helps fuel the incessant demand for something new.

While I admit that texture theft in virtual worlds is a different situation I think there are lessons to be learned from how the RL fashion industry handles intellectual property theft. Of course real life fashion designers aren’t happy about companies ripping off their designs either. The smart designers, though, are starting to directly compete with the stores that sell the knock-offs from their couture collections. Vera Wang at Kohl’s? Fantastic. The companies that peddle knock-offs will lose in the face of such strong, established brands.

What can you do?

Build a strong brand: create a cool store experience, design great packaging, build strong relationships with your customers and reward them for their loyalty. Communicate with your customers via in-world groups or something like Subscribe-O-Matic (haven’t used this, so can’t vouch for how good it is). Create a weblog. Get your stuff on onrez and SL Exchange. Keep innovating and creating new stuff. You’re the one with the talent so use it as best you can to beat the thieves. The reality is that they’re not going away.

Second Life is a huge place now, which makes it easier for the thieves to peddle your designs without your knowledge. The great thing about building up a loyal customer base is that they’ll tell you if they see your stolen designs. When that happens, take a deep breath, and handle it in a business-like fashion. Do what you can to handle the thief, informally at first and then via Linden Lab if need be, but don’t let it consume you and don’t let it dishearten you or keep you from working on your next piece, because then the thieves really win: they’ve robbed us all of your next design.

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