UFC's War With Piracy Is Customer Service Issue, Not Enforcement

NEW YORK - MARCH 06: UFC president Dana White signs autographs for fans after a press conference at Radio City Music Hall on March 06, 2012 in New York City. UFC announced that their third event on the FOX network will take place on Saturday, May 5 from the IZOD Center in East Rutherford, N.J.. (Photo by Michael Nagle/Getty Images)

This op-ed is solely the opinion of the author and is not the official position of Bloody Elbow or Vox Media. See Vox Media's official statement on SOPA/PIPA

Intellectual Property and Copyright infringement is a big problem. Not just for the UFC, but for any company and any industry whose commodity is licensing media in the form of audio, video and even the written word. Most importantly, all of these companies and industries are absolutely within their rights to protect and control their content and to not have that control taken away from them, or to have that protection subverted.

The problem is often the strategy employed to continue this protection and control, and a failure to look internally at current practices and at the current business model, as it relates to today's technology and consumer demands.

It was announced last week that UFC's parent company Zuffa would look to take legal action against individuals who watched illegal streams of their events, and over at MMA Fighting Ben Fowlkes wrote an editorial that argued suing fans was not the way to combat piracy or convert them into customers.

For anyone who keeps themselves abreast of technology and content issues through websites such as TechDirt.com, the belief that better enforcement is an effective way to decrease piracy is asinine. Instead there have been multiple instances that have historically shown that online infringement isn't an enforcement issue, but a customer service issue.

Multiple companies have shown that by adjusting their business model to better serve the consumer and better utilise current technologies, it has given them a far greater net benefit in revenue, profit and customer loyalty than by aggressively going after individuals for infringement, or spending thousands if not millions of dollars in civil litigation against other companies.

Related: Dana White And UFC Fail To See Big Picture With SOPA Support

For instance, in January 2009 Jason Holtman, the director of business development and legal affairs for Valve - the software company that created the legal gaming distribution platform Steam - spoke at a video games conference in Texas and remarked "Pirates are just under-served customers". Similarly in November 2011, co-founder and CEO of Valve Gabe Newell in an interview with The Cambridge Student stated:

In general, we think there is a fundamental misconception about piracy. Piracy is almost always a service problem and not a pricing problem. For example, if a pirate offers a product anywhere in the world, 24 x 7, purchasable from the convenience of your personal computer, and the legal provider says the product is region-locked, will come to your country 3 months after the US release, and can only be purchased at a brick and mortar store, then the pirate's service is more valuable. Most DRM solutions diminish the value of the product by either directly restricting a customers use or by creating uncertainty.

Our goal is to create greater service value than pirates, and this has been successful enough for us that piracy is basically a non-issue for our company. For example, prior to entering the Russian market, we were told that Russia was a waste of time because everyone would pirate our products. Russia is now about to become our largest market in Europe.

Where Steam has countered video-game piracy through a better consumer service and experience, other companies have taken similar approaches to music and video distribution. Netflix, Spotify and iTunes are just some of the companies that were created and developed in response to changing consumer demands, and the issue of online piracy has been successfully diminished globally as a result.

For Zuffa and the UFC, the key to success in their battle with piracy most likely lies with their UFC.TV service. Currently UFC Pay Per Views can be bought and watched through UFC.TV in the USA, but some events are blacked out in other parts of the world because of television deals in those regions, for example. In some instances though, such as the UK and the deal with ESPN, the choice is to pay for a subscription for ESPN to watch the UFC, or to not watch at all. There are UK UFC fans out there willing to pay to watch a UFC event, but who do not want a recurring monthly contract with ESPN to do so - especially if they have no interest in the rest of ESPN's sports content or the commercial advertising that often breaks up a UFC broadcast. Blacking out the event on UFC.TV because of the current deal with ESPN is limiting UK consumer choice and thus under-serving them. Setting a price point for a UFC.TV PPV or subscription - a price point established by investing in market research in the UK - is likely a better approach that not only better serves the UK consumer base, but increases UFC's fortunes in the process.

Even looking at the issue of pirated streams in the USA, UFC needs to ask themselves what they can do to make their service better and more convenient for the consumer. In part the UFC have already looked into the consumer experience by allowing Pay Per View to be bought through other means by partnering with Xbox Live and Roku, but this is just scratching the surface in how UFC.TV can be potentially utilised. Greater awareness among the UFC fans of the options available to them is also crucially important, and should be a focus within the free content the UFC produces on their website, their youtube channel, their facebook and twitter pages, and their network deal with Fox.

Ideally in the long run, the UFC cards fans expect to see on PPV will become part of television rights fee agreements like the rest of the major 'Stick & Ball' sports, and Dana White has even hinted at a move away from PPV as little as two weeks ago. This in itself would do a lot to combat piracy solely due to the increased convenience and accessibility it brings. Imagine if the NFL's Washington Redskins were a PPV based commodity where $60 would buy you 5 games; some Redskins fans would pay up, but some Redskin fans would possibly seek out pirated streams. The business model for the television coverage of NFL games means this problem doesn't really exist. Also the point about the consumers in either scenario is they're still Redskin fans, regardless of their choice in how to watch.

UFC.TV could also do with significant investment in hosting the UFC and Zuffa owned back catalogue. If a new fan of the UFC gets bitten by the UFC bug, and wants to check out UFC fights from the very first event, UFC.TV's options are limited. There are currently only two fights of Royce Gracie from UFC 1 available to watch on UFC.TV, and there isn't an option to watch the event in full. Or, let's say someone becomes a big fan of Wanderlei Silva, and hears Joe Rogan remark about the wars he had in Pride Fighting Championship. UFC.TV not only doesn't have a single fight of Wanderlei Silva's from Pride, but has three clips total that were to do with Pride: Two Alistair Overeem fights, and one episode of 'Best of Pride FC'. How many more subscriptions to UFC.TV could Zuffa potentially get simply by expanding or completing its online library? How many potential customers are they losing by not investing in UFC.TV in such a way? These are questions Zuffa should perhaps be addressing.

Piracy is an ongoing problem, and will likely remain so indefinitely. Throughout history there has always been a black market of sorts, but it has always existed based on consumer demand. If highly successful, multi-billion dollar companies like Google, Microsoft and Apple have focused on their consumer service and experience, while at the same time being openly opposed to legislation such as SOPA, it could be in Zuffa's best interest to emulate and be inspired by their strategies to counter piracy going forward.

KJ Gould

Email KJ.Cageside@gmail.com
Twitter @KJGould
Facebook KJ Gould

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