Piracy as Driver of Business Model Innovation: An Expedition to the Rough Waters of the Most Disruptive Source of Innovation and Beyond

Pietro Tamietti

Student thesis: Master thesis

Abstract

Piracy is unquestionably controversial, from the traditional counterfeiting to the online piracy on digital contents, the phenomenon creates revenue losses to legal business and poses legal issues about intellectual property rights. Nevertheless, many of today’s businesses, strategists, and academics who view piracy only as a legal matter, or dismiss it as a nuisance, may miss out one of the most important developments in the technology industry. In fact, pirates’ methods to conduct their activities present novelties that, if understood, captured and implemented in legal business models bring highly valuable innovations. Thus, the purpose of this thesis is to study how piracy may be a driver of economic development and the implications that it brings to policy makers. In order to conduct this research, piracy is analyzed at an organizational level, thus discovering the ongoing interactions between pirates, legal organizations and sovereign institutions. Moreover, approaching pirates as an illegal/illicit organization instead of rebellious individuals ensures validity to the finding that piracy, overall, is an organizational form that introduces innovations into the economic, social, legal and technological environment of societies. The main focus of this paper are the innovations that piracy brings at the business model level. Furthermore, the research suggests that business model innovation may be the best “weapon” –surely the most profitable – against piracy itself, instead or at the side of intricate and costly law enforcement efforts. In fact, piracy is a highly adaptable phenomenon and always find new grey areas to exploit and new technological tools to outsmart the opponents. As example, when governments started to track which files users were exchanging on the internet, cyber-pirates designed programs (TOR above all) to anonymize the connections to the servers. Hence, “corsarization” of pirate innovations is strongly advised in order to innovate and capture new market opportunities. The first chapter provides an historical background about the “pirate organization” in order to define the context. In the second chapter is outlined a review of the literature regarding management of innovation, business strategy and entrepreneurship in order to give consistency to the assumption. The fourth chapter presents three case studies stemming from different markets for empirical validity. The three firms operate with piracy innovation in different ways, therefore the chapter concludes with the analysis of the innovations, especially at the business model level and the suggestions for further evolution. The fifth chapter concludes the work summing up the lessons discovered through the thesis, presents considerations regarding the role of piracy in society and in the capitalistic system while also suggesting the need and scope of further researches.

EducationsMSc in Management of Innovation and Business Development, (Graduate Programme) Final Thesis
LanguageEnglish
Publication date2017
Number of pages90
SupervisorsClaus Varnes