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Do Nothing

When we last left off, I suggested that the solution was to do nothing. What does that mean, exactly?

What I’m saying is, forget about copy protection entirely.

DRM costs far more than it protects. It doesn’t prevent piracy—pirates are going to break it anyway. What it does is hurt paying customers, who should be cherished at all costs. After all, these are the people who are actually giving publishers money when they can get something for free. Why make things hard on the good guys? All it does is make them into the bad guys.

Yeah, sure, you say. No copy protection is just asking for people to pirate my game. How will I make any money?

Talk Like a Pirate

To understand this, we need to understand pirate behavior. Most people assume pirates do what they do simply because they can. While that’s true to some extent, it’s not the whole picture.

Over the summer, independent game developer Cliff Harris asked the Internet: “Why do people pirate my games?” What he learned was instructive.

Surprisingly, respondents cited the high cost of games as their primary motivation for piracy. $60 for a game was just too much in their opinion, especially when the quality of these games was often judged to be low. Next up was digital distribution—people would rather download games than go to a storefront. If they couldn’t get them legitimately online, they pirated because it was more convenient. Last, but certainly not least, was frustration with DRM restrictions.

Software with no copy protection is a very simple way to address these concerns. Consider the potential benefits:

1. With no protection, anyone can upload or download your game. As a result, it is distributed far and wide —at no cost to you— via Bittorrent. This gets it out there and into the hands of people who might not have played it due to cost or lack of digital distribution. Even if it doesn’t always convert to sales, it’s likely to result in greater exposure, which is beneficial in the long run. As Tim O’Reilly famously said: “Obscurity is a far greater threat to authors and creative artists than piracy”.
2. Think of it as a full-featured demo. Let users try out the whole thing, as much as they want, then pull a Radiohead and let them pay what they think it is worth. This gets over the potential quality issue. The customer doesn’t feel short-changed by an over-hyped, over-priced game that falls short. Don’t assume that no one will pay. Some won’t, but many will if you give them the option. O’Reilly again: “Customers want to do the right thing, if they can”.
3. Most importantly, no DRM means no restrictions that might potentially anger paying customers. Again, these are the guys and gals you want to treat right. Customer service lore has it that every patron lost to a bad experience will cost your business ten more because they’ll share it with others. While you’re at it, you probably don’t want to do anything to anger non-paying customers, either. Bad press is bad press, and on the internet it’s hard to tell who it comes from.

DRM comes out of an ideology that piracy is a zero-sum game, which we argue it is not. Yes, people will download games for free, but that does not necessarily equate to lost or even poor sales.

Case in point

You may not have heard of Sins of a Solar Empire. It doesn’t come from a big name publisher. It didn’t receive a lot of advertising. It’s just a really good game that made a lot of money—with no DRM whatsoever.

While Spore has sold a million copies at a development cost of $20 million, the relatively unknown SoSE brought in 500,000 copies with a development cost of less than a million. Assuming the same price point for both titles, that’s an ROE of 20 compared to 1.5 for Spore. Not to mention, the developers of SoSE, Stardock, have a lot of goodwill in the community from their decision to drop copy protection. As they put it: “Our customers make the rules, not the pirates.”

Granted, Spore is a major title in a different genre, but I think the point is made: you don’t have to have DRM to turn a profit with games.

We know our customers could pirate our games if they want but choose to support our efforts. So we return the favor - we make the games they want and deliver them how they want it. This is also known as operating like every other industry outside the PC game industry.
–Brad Wardell, CEO Stardock

It’s impossible to know how many people would keep paying if they could download a game for free. Eliminating copy protection would cost some sales, but it would also convert some pirates. It wouldn’t take much of a shift to make a difference. For every game sold with some form of DRM, estimates say that 15-20 copies are pirated. If publishers could convert just one of those pirated copies into a sale, about 5% of them, they would double their income.

Instead of more copy protection, perhaps publishers should think about less. Now that would be an evolution.

On Saturday, I proposed something to ponder over the weekend. Namely, I suggested that we all think, over the weekend about the possibilities of a brand and design strategy that takes into account multiple degrees of control, in the various registers of user experience.

This is a deep and complicated question, and whatever strategies will be used to resolve it will likely involve brand strategies that are downright alien to the ones we know today. Why this might necessarily be the case, I thought, may give us some deeper insight into moving forward on this difficult problem. After all, diagnosis is one thing, treatment is another.

In that short post, I hinted that the key to understanding the problem posed by Jon Baskin is to the idea of control. Baskin obliquely indicates this as well.

In traditional contexts, companies had the upper hand in most exchanges: Television and radio advertisements, billboards, and to an only-slightly-lesser extent websites are all media in which a company can tightly control the visual or aural experience of a potential buyer. As Baskin rightly points out, this is not the case with internet search results.

Which means that brands are going to require strategies that go beyond the totality of all the "traditional" requirements of a brand: colors, logos, taglines, website design, etc. while at the same time, either continuing to employ them contextually or else finding some other type of strategy that does the same kind of work.

“Nowadays, people aren’t interested in art that’s not tattooed on fat guys.”

Regardless of the role played in the future by traditional brand materials, we are certain that in a growing number of situations, potential users will be deciding for or against products based on something else entirely. Something that can’t be controlled for using these traditional branding strategies. The net effect of this emergent reality is that we are being forced to relax the control requirements that our traditional brands have required. But, since very nearly everything about old brands required the ability to control a user-context, we need an entirely new type of branding.

Tips for Getting Started

Relaxing the control requirements entails a new kind of ethical thinking about the relationship of our products to our customers, a relationship for which the "brand" terminology seems crass and malapropos. No longer are we going to be able to brand our user’s experiences in every context, which means that our special stamp (color palate, logo, etc.) is no longer singly reliable as an indicator of quality. Thus, the de facto post-branding wisdom seems to lean toward product quality as a kind of branding. In other words, your corporate stamp might be the particularly delicious taste of your Cheez-Flavored Crackers.

Of course, while product quality should certainly become a more and more aggressively pursued brand strategy, there is still the problem of selling those crackers without a commercial, or even a box.

Mike Krol’s Average Flakes

What this amounts to, or so it seems to me, is not simply a requirement for pictureless-advertising, but a requirement to totally recast the purpose of corporate branding from a declarative, drawing and writing type enterprise, to one in whose entire focus is to develop an outspoken community to talk up your product (Seth calls this managing a tribe).

Why does this work? Because people don’t trust your brand anyway (just look at Lehman Brothers). The simple fact is that they trust total strangers’ ranting opinions a thousand times more. No amount of clever copy or advertising is going to sell your crackers nearly as much as a trusted individual recommending them on cooks.com, or five thumbs-up votes on Yahoo Answers.

(Incidentally, this is why Microsoft just looks silly trying to advertise their way into the kind of brand loyalty that Apple knows you have to build by word of mouth.)

So, we know that product quality and tribe management could play key roles in the next five years of brand design. What else could? What could in ten years? Are there unthought design (as opposed to strictly “design thinking“) solutions?

Jonathan Baskin wrote an interesting post over at his Dim Bulb blog last Wednesday, about the relationship between brands in a search-driven world. His contention is that "search is the anti-brand," by which he means that while "corporate marketing is still focused on optimizing search terms to promote the stuff of branding, consumers are already past that step."

I would argue that even if there’s a real trend to support this particular piece of hyperbole, it’s not exactly time to throw in the towel on old-style declarative brands, at least in most industries (e.g. Nick’s cheez-flavored crackers: ain’t nobody increasing the profit margins on these with an internet search. Now, a catchy jingle…).

Nevertheless, Baskin is making an important point: The climate is changing, and there are contexts in which potential customers interact with a brand, which aren’t subject to a traditionally branded experience. The challenge for designers inside of this climate is to evaluate potential responses to sort of brand DMZs. Which is exactly his point.

From where I’m standing, though, we can’t just throw the baby out with the bathwater. Traditional branding techniques are still relevant, and I believe will continue to be for the near future. They are going to provide the substratum for user experience in a variety of contexts, even if they don’t work exactly the same way they used to.

Hence, your weekend ponderable: Meditate on the possibilities of a brand and design strategy that takes into account the multiple degrees of control possible in the various registers of user experience.

The Situation

Piracy is the biggest problem facing PC games. Publishers claim it’s so bad that it threatens the very existence of the platform. Since it’s so easy to copy games, it’s no longer profitable to develop for the PC.

To help stave the flow of lost sales, many newer games come with DRM (Digital Rights Management), a kind of software lock designed to prevent unauthorized copying. It sounds okay in theory. I mean, we can generally agree that companies have a right to protect themselves.

But that’s where the game publishers have gone overboard—putting their rights above their customer’s. And so, instead of profiting as they should be, they’ve created a storm of controversy and actually made things much worse for everyone involved.

A Study in FAIL

I’ll give you a great example: Spore. You’ve heard of Spore, I’d wager. It’s the new world-building game from Will Wright that lets players create and evolve lifeforms. It’s been hard not to hear about it over the past year, as the hype-machine has been in overdrive pending its release. People were excited; they were primed and ready to lay down some cash and play. Then they found out about Spore’s DRM.

Some creatures from Spore. Opposable thumbs not included.

Customers are used to owning something they pay for, but with DRM, it’s more like they’re renting it—for full retail price. In the case of Spore, the game can only be installed three times before the CD key no longer works. If you need to install it more than that, you have to call and explain your situation to EA to get another install (give me a break!). Also, a copy of Spore can only be installed on one computer at a time, so if you’ve got multiple machines for kids or business, you’ve got to buy one for every machine. Spore also requires the player to authenticate the game online upon installation and when the game is run, which begs the question: what happens if the servers go down or the company goes under? Without authentication, the game is useless.

So EA’s DRM is annoying, maybe even draconian. Has it hurt sales of Spore?

You could say that.

Yeah. Spore is the most pirated game of all time.

According to Torrentfreak, as of last week, the game has been downloaded 500,000 times. As of this week, the game has sold 1,000,000 copies. Now, a million copies is still a huge number for PC sales—really any video game. But that just makes the number of pirated copies that much worse.

Now, you say, how many of those are people who would have legitimately bought the game? Aren’t people just stealing it because they can? It’s hard to say, but anecdotal evidence suggests a significant number are downloading it out of spite. People have flooded the Amazon listing for the game with angry one star reviews protesting the DRM policies. The EA discussion boards and torrent site forums are full of similar sentiments.

How can we fix this?

The situation is bad for everyone. EA has lost the battle against piracy. Customers are angry. As a result of this debacle, things look even worse for the industry as a whole.

What’s the right thing to do? How can companies make a profit while ensuring that customers have their right to fair use?

Do nothing.

I’ll explain in Part Two on Tuesday. See you then!

Rule Number One of branding is: consistency, consistency, consistency. A brand has to have the same appearance whenever someone sees it — that’s how it gets programmed into people’s heads. Violate the brand and conventional wisdom says you’ll lose your audience recognition. For example, you wouldn’t see a Coke logo that’s blue, nor its Coca-Coca wordmark in anything but script. Nobody breaks the rule; it just isn’t done.

Well, somebody did. A recent Valleywag post faulted Yahoo for high crimes against its own brand (emphasis mine):

Racing to reach markets before its rivals established themselves, Yahoo started dozens of country-specific websites with a frenzy of joint ventures in the 1990s. Its haste still haunts it; Yahoo’s international websites may cater to local preferences, but at the cost of consistent branding.

Look at this collection of Yahoo logos. Is the Yahoo logo red, or purple? Reversed out, or solid? Mirrored shadow underneath? Take your pick of stylized designs; somewhere in the world, Yahoo has it.

In the classical marketing view, then, consistent branding trumps “local preferences”. (Doesn’t that phrase sound derogatory? Like “community organizer”) That’s fine for American soft drinks, perhaps, but is it also true when it comes to more flexible, truly global products, like Yahoo?

One would think that greater technology and faster communication would be a unifying force—that everyone could see and want the same thing. But we know that isn’t the way things are. Technology gives people more choices, so they want their thing.

Case in point: A few months ago, an AP article discussed how US internet companies have had to adapt to conditions overseas. To succeed, businesses can’t just translate their pages or repeat the same business models wherever they go. Nor, it seems, can they carry on with the same aesthetic:

Google Inc. discovered [its usual tactics didn’t work] in South Korea and China, where it initially held its minimalist approach, only to see local rivals thrive by acknowledging their users’ preference for sites rich with entertainment and visual complexity.

Given an example like this, and others in the article, Yahoo’s inconsistent branding doesn’t seem quite so shocking. Indeed, Valleywag’s scolding comes off as ignorant of the global reality.

Consistency seems so old-school; so hegemonic. To truly penetrate worldwide, does a top-down, homogeneous branding strategy make sense anymore?

As the US economy weakens, tapping into other markets is more important than ever. We may have to rethink how the game is played. To survive, the next brands might have to be mercurial: many different things to many different people.

One of the questions that has been on my mind recently is, "what exactly happened on Wall Street last week, and why?" Thankfully, we have the New York Times’ Freakonomics column, which offered a beautifully clear summary in a guest post by economists Doug Diamond and Anil Kashyap on Thursday. I paraphrase what they say below.

1. The US Treasury nationalized Fannie Mae and Freddie Mac on September 8, and has since replaced the management of both companies and will presumably oversee their operation.
2. On Monday, the largest bankruptcy filing in U.S. history was made by Lehman Brothers.
3. On Tuesday, the Federal Reserve made a bridge loan to A.I.G., the largest insurance company in the world, securing the option to purchase up to 80 percent of the shares the company.

In short, the Fed has intervened on an unprecedented scale, in an unprecedented form, and in firms unprecedentedly far removed from its own supervisory authority. Wow! That’s about the craziest thing that’s happened in the financial universe since the Great Depression.

But why?

In the case of Fannie and Freddie, in order to keep the mortgage market from collapsing, the Treasury announced that it would explicitly guarantee the debt. Subsequently, "no self-interested investor was willing to supply more equity to help buffer the losses," leading to the Treasury’s taking over.

In the case of Lehman, the financing dried up, Diamond and Kashyap say, because "for months, short-sellers were convinced that Lehman’s real-estate losses were bigger than it had acknowledged."

In A.I.G.’s case, while its core insurance businesses and other subsidiaries were doing fine,
it needed private investors who were willing to step into this situation and loan it the money it needed to post the collateral on $380 billion in insurance contracts outstanding. Again, no self-interested investor was willing to do this.

Notice anything interesting that all three of these things have in common? They were all undermined by a lack of consumer confidence. Their brands couldn’t hold out against people’s fears about America’s seemingly crumbling financial infrastructure. And with good reason!

Which I think teaches us a good lesson about the limits of the power of branding. If a venerable, respected brand like Lehman Brothers can’t hold off the apparent tide of an emerging reality, neither can you. The lesson? Commit to a brand-reality correlation.

Nick posted something about selling rotten steak last month, and I think we’re seeing a devastating result of trying to do just that here; and even moreso. Thus, I think we can inaugurate a corollary to Nick’s Rotten Steak Rule, the Brand-Reality Corollary.

In short, if your brand comes into conflict with reality, reality’s going to win.

I love her use of bright colors and marker as a medium. The texture, combined with the repetition of shapes makes this series of illustrations simple, yet rich.

(This particular piece is my Twitter background, until I can find the time to make a huge version of the DLB guillotine)

Via.

I recently read Jennifer van der Meer’s thought-provoking piece, The Crowd Will Save Us: How the green movement taps participatory networks to drive innovation at Core77.

TCWSU is an appeal to marry up two significant and recent cultural developments which have affected nearly everyone in the design profession, namely, the "green movement" and design strategies employing social networking. The first really compelling bit of her argument is this:

Over 50% of consumers want greener, more natural [e.g.] housing cleaners, but only 5% actually purchase this category of product: consumers do not want tradeoffs. …green-leaning consumers are looking for proven efficacy, broad availability, comparable price, and a brand they know and trust. They’re not willing to settle for a product that performs less than a more eco-unfriendly alternative.

This statistic offers up something deep for us to think about: The (relatively) recent groundswell of interest in environmentally friendly product design is, while certainly "real," nevertheless only marginally capable of altering whatever practical or psychological norms motivate individuals to actually buy things.

The rest of TCWSU deals with some practical strategies about how social innovations in design might help us solve this complicated psychological problem afflicting products and brands, and rightly so. In addition to her practical conclusions, though, this strange statistic should certainly tell us something theoretical or psychological.

Namely, I wonder why, exactly, the psychological dependence on extant brands as the guarantor of quality isn’t overcome by people’s self-professed desire for greener products?

It’s not you, it’s me (via).

Several possible reasons occurred to me:

1. People are lying about or exaggerating their desire for green products. At this point, we all know we should want greener products, we should care about the future of the planet after we’re dead. It is possible that actually caring, though, is beyond the pale, psychologically-speaking, for most people. Personally, I doubt this.
2. People do want green products, but legitimately can’t afford or find them. I think that this is probably true for a very small portion of people, but I severely doubt that it accounts for any kind of significant numbers. After all, the green movement, in all its most culturally salient forms, is squarely targeted at the urban haute bourgeois.
3. People want green products, but they can’t break their psychological dependence on brands as a guarantor of quality. I think this, unfortunately, is probably the most likely culprit.

If (3) is the case, the sort of populist-utopian view that "we need to envision a new way to work, play, and live — a new way to create our own future," may require a much deeper deprogramming than we want to admit. In other words, I think it’s reasonable to ask if the promise of collaborative innovation as such could possibly overcome our cultural brand dependencies, if each collaborator is the genetic inheritor of that mindset.

My agenda here is not to be overly pessimistic about the future of product design, but rather to suggest that perhaps the ecological movement for design could act as a catalyst to solve a deeper design problem, one that (perhaps) might even underwrite the mentality which allowed us to generate the "green problem" in the first place.

In short, is it possible that solving the "green design" problem is itself not enough, and that before we attempt to solve that important and real problem from inside our current cultural-psychological matrix (our Sittlichkeit), we could use this moment — in which we’ve recognized of our previous failures as product designers and consumers — to catalyze a serious and self-critical look at some other deep and problematic assumptions we’ve been making about what constitutes ethical product design?