The great British tradition of media piracy

When a young Irish entrepreneur named Ronan O'Rahilly founded pirate station Radio Caroline in 1964, he also established a great British tradition. Not only did the actions of O'Rahilly and his fellow radio pirates force the BBC to start playing pop music, they left in their wake a great cultural legacy for everyone in Britain, a heritage we should all be proud of. They instilled in us the innate capability to become first-rate media pirates.

O'Rahilly was a pioneer who used the pull of youth culture to remove a barrier to entry in the music business. He was told it was going to be impossible to get an artist he managed any airtime on BBC radio, because they only played records from the four big labels not that the Beeb played much in the way of pop music at all at the time. In response, he converted an old ship into a floating radio station and began broadcasting from the English Channel. He was quickly followed on to the high seas by a number of others and by 1966, 45 per cent of Britain was tuning into the pirates. The Government realised this was a battle they couldn't win there was too much support for the pirates, they couldn't close them down, they feared riots, so they did the only thing they could. They decided to compete. Commercial radio was legalised in 1970, while the BBC set about hiring many of the DJs from the popular pirate station Radio London, and created their own imitation copy, which they named Radio One.

Run-of-the-mill entrepreneurs look for gaps in the market, but pirates find gaps outside the market such as the English Channel places they're not supposed to go, where they can do things they're not supposed to be doing. When pirates aren't doing anything society finds useful, the strong arm of the law is usually enough to get rid of them, and protecting our intellectual property is often the smart thing to do. But when pirates are adding value, people tend to support them, and in those cases the pirates will keep coming back and multiplying, no matter how many people are sued. And the truth is, if lawsuits become a component part of your business model, then you no longer have a good business model.

In these cases, what pirates are actually doing is highlighting a market failure and pointing out a better way to do things; they find better ways for society to operate. In such situations the only way to fight piracy and survive is to legitimise and legalise these new innovations by competing with pirates in the marketplace. Once a new market is legitimised, more opportunities are created for everyone.

Pirates have done this plenty of times throughout history. When a guy called Edison invented funny little discs that could perfectly reproduce musical performances, artists branded him a pirate out to ruin live music, until a system was established so they could be paid royalties, which we today call the recording industry. Edison went on to invent filmmaking, and demanded a licencing fee from those making movies with his technology, which prompted a band of filmmaking pirates to escape from New York for the then still wild West, where they thrived, unlicenced, until Edison's patents expired. This town of pirate filmmakers continue to operate, albeit legally now. It's name? Hollywood.

We're consistently good at piracy here in Britain, especially when it comes to music. For decades, pirate stations have continued to provide us with new artists, DJs and genres, not to mention inspiring new legal stations such as Kiss FM and BBC 1Xtra. Grime rapper Wiley is climbing the pop charts this week thanks in part to the modern-day equivalents of Caroline, such as London's Rinse FM. As a society we've allowed the pirates to stay in business because enough of us recognise they add an extraordinary amount of value to British culture in a way mainstream commercial radio simply cannot. It's sad to see us punishing some of our greatest pirates today, instead of figuring out how to compete with them. When file-sharing site OiNK, arguably one of the finest repositories of recorded music ever assembled, had its Teesside HQ raided last October, we lost a great site that should have somehow been allowed to exist legally. People are consuming music in a new way that is adding value to their lives (which is why OiNK was replaced about five minutes later), and adding value to every other part of the music business. Outside of the business of selling people CDs, every other part of the music business is growing because today music, as David Bowie put it, flows like water.

Of course, today music isn't the only way to rebel. If you were in your early twenties in the 1970s and bored with TV, dying your hair green and forming an alternative rock band with your friends to complain about it was a good idea. If you were really lucky, you might get a record deal like the Sex Pistols did. Today, it is just as easy for three guys in their 20s to start an alternative to TV, as the three guys behind YouTube did, and if you're really lucky, you might sell to Google for $1.7bn 21 months later and revolutionise the way television works.

As a nation we understand the value of the pirates who work outside the mainstream media, but all over the world people are demanding the same things from their media as pirates always have. Whether it is music, games or TV, we want to consume media on our terms, remix it and share it as we see fit. New forms of malleable media and new opportunities to create many-to-many networks are adding value to broadcast models, the way pirate radio adds value to commercial stations.

Media platforms that include the consumer in the creation process become more complex and create new relationships between the broadcaster and the audience. Some even extend markets and product life spans. Video games have realised the potential of this idea more than any other type of entertainment. The battle between Master Chief and the Covenant isn't the whole story of the Halo franchise your YouTube video of yourself regulating 10 noobs with nothing but the butt of your gun and a hand grenade, set to a Euro-disco soundtrack that sounds terrible to everyone other than yourself, is also a major part of the story. That's the reason why Halo set the record for the most single day sales of any form of media, and the reason why Grand Theft Auto IV knocked Halo off the top spot last month. The real value in the GTA franchise (another great British institution) has always been the rich and detailed sandbox worlds that let you create your own stories within them.

Great networks perpetually add value to all kinds of media, even if they are frowned upon when they start out. From fan-fiction to piracy to making home videos at theme parks, people have been creating their own niche forms of media within mass entertainment properties for a long time. When mass entertainment properties encourage and add value to the networks that grow around them, they make it easier for those networks to reciprocate.

'The Pirate's Dilemma' by Matt Mason is out now, published by Penguin