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Consumer Laundering – Piracy’s Silver Lining Unfolds

Operators of online piracy sites should take note — you could be sitting on the next media gold rush

 

 

Fruit of a poisonous tree …

Lemonade from lemons …

Call it what you will, but as predicted in one of my previous posts, "Online Piracy's Silver Lining," the mainstream media's marketing forces cannot resist the temptation of turnkey access to large consumers bases.

The Rhapsody music service announced last week that it has agreed to purchase Napster's subscribers from Best Buy, who acquired the company for $121 million in 2008.

Operators of online piracy sites should take note — you could be sitting on the next media gold rush. Call it "consumer laundering."

If you operate a pirating site (or know somebody who does), here's a quick "how to" guide for scrubbing your subscribers:

1. Consolidate your massive ill-gotten subscriber database and corresponding consumer metrics;

2. Convert the site into a legitimate commercial enterprise;

3. Cease pirating and start retailing;

4. If successful, make money;

5. If unsuccessful, sell yourself to the highest bidder: big media, technology, consumer electronics, pharma, political parties, or whomever;

6. Become a VC, lecture on Ted, write a book.

Jeff Steele is a noted film finance expert and owns the website FilmClosings.com.  Most recently, Jeff was CFO of Magnet Media Group, an equity finance, production, and distribution fund for $10 million - $50 million feature films.  Before that, Jeff was the director of film finance for Screen Capital International and a producer for Sony Classics' "Who Killed the Electric Car?"