Sumner Redstone, who controls the twin media giants Viacom and CBS, is leaning on Internet service providers and online media outlets to do his heavy lifting. Speaking at the Seoul Digital Forum 2008, the 84-year-old media mogul came down particularly hard on YouTube, equating the video platform with piracy and demanding that ISPs and web sites do more to police content.

"Solutions turn on enlisting the aggregators—ISPs, device manufacturers, hosting companies, and site operators—this effort," Redstone said, according to the Associated Press. "We ask that companies that become aware of piracy using their facilities do something about it."

Redstone's statements make sense in the light of his long-running legal campaign against piracy in general and YouTube in particular (Viacom is suing YouTube for $1 billion at the moment). It's also far from a unique stance among studio bigwigs. But is it really fair to ask the service providers to beat piracy on behalf of the content producers, when the networks and studios already have much better tools at their disposal?

Game theory

Matt Mason, in his book The Pirate's Dilemma (look for our review next week), shows how a culture of piracy tends to grow up whenever and wherever a human need meets draconian restrictions—economic, legal, what have you. The establishment that gave birth to hip-hop, Wikipedia, disco, and YouTube must change in the end or risk losing out as new players monetize the new market staked out by the pirates. Rap and graffiti started out as rebel yells, then became accepted as art forms, and they have now been integrated into the multibillion-dollar pop culture machinery that once was the enemy. It happened to Dr. Dre because the record companies couldn't silence him and his fans with cookie-cutter pop, so hip-hop quickly became a business model instead.





Sumner Redstone

What Sumner is missing with his comments is the fact that pirates can be beaten—it happens all the time—but not primarily by means of legal threats and lawsuits. No, you subjugate these rebels with the tools of free enterprise. Piracy is just another business model, and the pirates will lose and go away when you come up with a better model (or they will become legitimate players themselves).

Stripped down to the bare essentials, consumers will choose the service with the most attractive balance of price, convenience, and quality. Piracy will always win on price, because you can't really beat free. The other two components are up for grabs, but the media companies are only now starting to seize the opportunity.

Quality

Take YouTube as competition for the Comedy Central cable network, for example. Redstone's Viacom has asked Google to remove clips of Colbert and Jon Stewart, time and again. But a YouTube search on "Colbert" today still returns more than 6,200 results. And if Viacom managed to shut YouTube down entirely, you'd see those clips moving to MySpace Video. Or perhaps Yahoo, MSN, or some platform that doesn't exist yet. The pirates will always keep a steady supply of free clips on hand, if you're willing to chase down the sources and deal with bad quality, clip length limits, and other flaws.

So Comedy Central eventually fought back hard, hosting the complete Daily Show archives online, and tagged the clips to make them searchable. NBC and Fox formed Hulu to distribute their shows with minimal commercials, and ABC and CBS are doing their own experiments with online distribution (ABC offers Lost in HD, for instance).

Make sure the videos are of high quality, preferably in high-def and surround sound. Don't skimp on the extras: if anything, there should be exclusive content online only, not the other way around. Remember, you're creating a new distribution channel, and need to promote it. There's the quality play.

Convenience

If Redstone really wants YouTube to stop "stealing" his viewers, it's easy to do. In fact, his companies are already doing it. Start up a one-stop shop for all the Comedy Central content you want or, even better, everything you'd ever want to watch on any Viacom or CBS property. Some shows are produced by other companies—just tell them to put up with this, or they're off your airwaves. An industry-wide content portal would be even better, but it will take years to sort out the branding, control, and revenue sharing issues there.

Then promote this site. Relentlessly. If you watch just one episode of South Park or Tila Tequila, it should be impossible to walk away without the awareness of a convenient service that will fill you in on missed episodes, shows you never heard of, and all the classics, too. They start on demand and play stutter-free from any PC, Mac, or Linux box, anywhere in the US, any time. There's the convenience play.

So Viacom can concede the price point to piracy, having won the other two battles. Throwing in the towel entirely and charging retail DVD prices for a season of Family Guy may still be a mistake, but with any reasonable scheme, this should become a profitable venture very quickly. Figure out an ad-supported model if you can, or charge less than a dollar per episode. Let people burn it to DVD or play the file on iPhones for a buck.

Endgame

In the end, piracy will force all the big-time content producers to move in this kind of direction. Capitalism, properly applied, will beat the rebels every time, and the odd thing is that the content companies are finally moving full-speed ahead with these new initiatives even as the bosses sometimes seem fixated on the "stick" half of the "carrot and stick" approach. Even Sumner Redstone is starting to understand this.

"Media companies need to make it easy for consumers to obtain our content in a legal manner," said Redstone. "We cannot let the lack of perfect antipiracy tools keep us from forging ahead in providing the best, most innovative, creative content to the consumer over whatever medium they prefer, whenever and wherever they prefer it."

Media companies think they're moving as fast as possible, but consumers are impatient creatures, and have moved even faster.