Online piracy is such a big problem in the Middle East that Rotana, the Saudi media group, says it loses as much money to illegal downloads as it makes in legitimate sales of films and music. Yousef Mugharbil, the president of the group's Rotana Digital Entertainment, said illegal downloading and other content piracy was so widespread it had profoundly influenced the company's digital strategy in the region.
"Piracy, for every dollar we sell, we lose one dollar," he said. "It's a serious problem for us in many countries throughout the Middle East. All the laws are put in place but they are not implemented." He said one of the top illegal music downloading sites in the Arab world had a database of 73 million users and averaged 500,000 downloads a day. Rotana has responded by going directly to the advertisers and threatening legal action.
"You would not believe who advertises with them," he said. "In some cases it was governments." Rotana told the advertisers that if legal action was taken against the download sites then it would also be taken against them. "Assisting in a crime, you are a criminal as well, at least in international law," Mr Mugharbil said. But such efforts can only go so far. "There will always be room for pirates," he said. So Rotana has had to adapt its pricing and packaging.
Chief among these changes is lowering the price of content. "How do you fight piracy? In our experience, at least in Saudi Arabia, we used to see a CD for 45 riyals (Dh44.05). The pirated CDs were 15 riyals. So we went to 15 riyals to see what would happen. We quadrupled our sales," he said. Rotana has also focused its digital strategy on creating attractive "entertainment experiences" on the mobile phone, which has not been as prone to piracy as the internet or copied CD or DVD markets. Mr Mugharbil said this was because the mobile phone was too personal and its content too inexpensive to merit such an invasion of privacy.
But at the end of the day, it is the low price of the offering that will keep the pirates at bay, he said. "There are two sayings," he said. "The first is 'only the paranoid survive' and the second is 'embrace destructive technology'. Today, you cannot compete with technology." @Email:firstname.lastname@example.org