Gabe Newell — Valve‘s CEO, a company that develops games such as Half-Life and Portal, and also manages the virtual video game store Steam — famously noted, a while ago, that piracy is a service problem, rather than a pricing one:

We think there is a fundamental misconception about piracy. Piracy is almost always a service problem and not a pricing problem. If a pirate offers a product anywhere in the world, 24 x 7, purchasable from the convenience of your personal computer, and the legal provider says the product is region-locked, will come to your country 3 months after the US release, and can only be purchased at a brick and mortar store, then the pirate’s service is more valuable.

Most DRM solutions diminish the value of the product by either directly restricting a customer’s use or by creating uncertainty.

Newell is obviously right. The digital rights management (DRM) scheme in games have failed miserably, not only because they are ineffectual (all antipiracy systems have been circumvented), but because they have also lowered sales and made worse the gamer’s experience.

Newell’s story, while true, is convenient, because Valve itself manages a DRM system. Steam, besides being a store, is an antipiracy mechanism as well, but at least it tries to offset the rights the players lose by giving them some nice perks: online matchmaking, mod tools and low prices.

Steam tries to reach a middle ground between gamer culture, which reacts against any attempt to encroach on their rights, and the large corporations’ sensibilities, that are so keen on defending their so-called “intellectual property.” The large video game publishers have noticed they are losing this battle. Recently, popular gaming website Rock, Paper, Shotgun published an editorial that condemned the fact that video games never go into the public domain. In arguing his point, John Walker did not flinch from the logical consequences of his reasoning and radically denounced “intellectual property:”

[W]hy shouldn’t someone be allowed to continue profiting from their idea for as long as they’re alive? . . .

[M]y response to this question is: why should they? . . .

Why should someone get to profit from something they did fifty years ago? In what other walk of life would we willingly accept this as just a given? If a policeman demanded that he continue to be paid for having arrested a particular criminal thirty-five years ago, he’d be told to leave the room and stop being so silly. “But the prisoner is still in prison!” he’d cry, as he left the police station, his pockets out-turned, not having done any other work in the thirty-five years since and bemused as to why he wasn’t living in a castle.

What about the electrician who fitted the lighting in your house. He requires a fee every time you switch the lights on. It’s just the way things are. You have to pay it, because it’s always been that way, since you can remember. How can he be expected to live off just fitting new lights to other houses? And the surgeon’s royalties on that heart operation he did – that’s the system. Why shouldn’t he get paid every time you use it?

Reactions like this to intellectual monopoly paved the way for projects like the Humble Indie Bundle (HIB), where consumers pay whatever amount they want for several excellent games, no DRM, compatible with both Windows and Linux. HIB served as example for the Story Bundle, that gathers books from independent authors — and there are many other examples.

Clearly, they are initiatives that try to steer consumers into supporting creators of cultural goods, and they have been fairly successful. However, the very fact that people are able to pay what they want seems to be a weakness of the model. After all, it seems that creators are perpetually dangling their tip jar, hoping that people will toss them enough quarters to get by, not being able to depend entirely on their work. And it would be inconceivable that large companies would surrender to such a model, since they are still erecting their pointless pay walls.

What is the alternative? The Brazilian Northeast may have one of the answers.

For years, not only record companies but also musicians and bands from the Southeast have tried to suppress CD and DVD piracy. They make incessant campaigns, remind us about the illegality of copying “their” discs, and pretend we don’t have the right to “publicly reproduce” songs and videos that we’ve bought. Nevertheless, Brazil remains one of the world piracy leaders. Street vendors still sell pirated CDs and DVDs, and the police keeps confiscating merchandise — steamrolled shortly afterwards in big public displays (the junk is to be “ecologically discarded” then).

The service they offer offer is terrible. It is hard to get hold of music and movies conveniently at competitive prices.

In the Northeast, though, things have changed. The change was brought about by local bands, extremely popular in their regions, which play little known or unpopular styles in South and Southeast Brazil. Street vendors are not seen as enemies anymore, but as allies. Calypso (a band that is technically from the North) started off the trend of giving their CDs and DVDs directly to street vendors. Other bands soon followed suit and noticed that it made no sense to close off a channel of communication with their audience. Those vendors became one of the main means of diffusion of music in the North and the Northeast, and chasing them off started being an economic nuisance, instead of an imperative (which explains why there are many more street peddlers in the Northeast than in the rest of the country).

The Northeast took it a step further yet. Bands that play a style of forró known as “brega” (literally “kitsch”) abandoned the pretense of making strictly authorial songs. Now, several bands play the same song, each one their way. Every season, we have several (sometimes dozens) of the same songs played differently by many distinct bands. Musicians are not distinguished by what they play, but rather by how they play, and all of them are a step ahead of the authorial bands because they play exactly what the public demands at that season, at that moment.

The face of this new style is Wesley Safadão and his band Garota Safada. In their concerts, Garota Safada gives away for free their CDs and DVDs, and put all the songs up for free download on their website. Wesley Safadão is not overly worried about piracy because it promotes his real product: concerts (taken to every small city in the Northeast, attracting tens of thousands of people), TV appearances, commercials, and of course his own brand and play style — which define him much more than authorship.

Safadão is not losing sleep over the fact that Banda Grafith or Forró da Pegação play the same songs as him. In fact, all of them are all too happy to promote the same music.

Songs that may be considered kitsch by the Southeast, but are verifiably much more profitable and do not depend on dying models such as “IP.”

As Gabe Newell said, the problem was service all along. The poor Northeast has it figured out, the rich Southeast is busy steamrolling CDs.