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Why Software Piracy is Good for Microsoft
jcphil writes "Salon has an article that explains why Microsoft has toned down its anti-piracy actions in China and other developing markets. The answer is simple: due to the network effect, the more users you have, the greater your strength in the marketplace. And it doesn't matter if their Windows is pirated or not. So, in effect, software piracy in countries like China helps Microsoft to compete with Linux." Meanwhile, the RIAA doesn't feel the same logic applies to record sales in the U.S., and has started an ad campaign to convince the public that sharing music hurts artists.
I have to wonder if the artists who are supporting this ACTUALLY believe it, or if their record company is forcing them to do it. After all, they are indentured servants, they do what they are told. if they aren't being forced, I'll bet the company has bombarded them with FUD until they actually start to believe it. I can see the record company telling them all about how they need to change the contract for this new "piracy" fee that is stealing all their money. Phbbt. Fine, let the music industry go down the tubes, I don't really care.
My beliefs do not require that you agree with them.
Absolutely true. Here in India (a very China-like piracy situation) there are plenty of small businesses which want to move to Linux in theory but they continue to use Windows-Office-Exchange etc because its free to them.
At zero cost (actually approx. US$ 2.15 per CD that all software costs here), its pretty hard to convince yourself that the effort of migrating to Open Source is worth it!
Funnily enough, Linux costs more than Windows because none of the regular pirates stock Linux. So Win2K is US$ 2.15 but Redhat is about US$15 which is what the cheapest unoficial Redhat CD costs
...in the same sentance!
Music "sharing" is another name for FREE ADVERTISING! The real money is in merchandising anyways, concert ticket sales, T-shirts, branded notebooks, action figures...
When are those idiots going to learn that they can never stop the free exchange of data, without changing the country into a police state? Our friends in the White House (courtesy of many big business lobbiests) are trying their best to do this, but we don't YET need tongue tattoos to authenticate our cognitave brain centers. We retain the ability to think for ourselves, for just a little while longer.
MPAA/RIAA! It's really simple. You adapt your business model to become a service industry, which is what you are. Stop trying to treat content as a commodity (which it is not). Make tangible goods and sell those, but stop pretending that a song is something you can put in a box.
If I buy a watch today, and it turns out I don't like it, I can take it back. Afterall, I won't know if the product is satisfactory until I've had time to get to know it. But if I buy a CD, good or not, I'm stuck with it. Because of this, I'm forced to either gamble with my satisfaction, or find a way to sample the music before I buy.
It's hard for me to rationalize music downloading as stealing when the RIAA is happy to take my money without guaranteeing my satisfaction. Frankly, I think they're stealing my money when they sucker me into buying a CD.
I think their biggest concern is that P2P makes the market for music fair for the consumer instead of biased in the RIAA's favor.
Awhile back I read an article in the Detroit News on the "Grey Market" for Autos made in the US but sold in Canada. Given local market conditions, the US car sold in Canada is cheaper than if you sold the exact same car in the US. The "Grey Market" comes from Detroit dealers driving up to Canada, buying a lot of the cars cheaper, shipping them back to Detroit, and then charging full price - making a handy profit. The big three (GM, Ford, Daimler-Chrysler) are trying to put a stop to the practice, as they sometimes sell the cars in Canada at a slight loss, but charge more south of the border (the US) to make up for it, while still maintaining market share in Canada.
Now let's look at Microsoft. MS decides not to pursue piracy to gain an "advertising" edge in the OS market. So how do they make up for those losses? They charge more for the software in markets with a higher cost of living, or markets where they really chase after the software pirates, as it really cuts into their profit margins. So basically we consumers (who may be stuck buying Windows - that's a different story) are stuck with the bill for the piracy. Why would a company in a monopoly position really care if they loose money in one place when they can get away with charging more for it in another place?
This problem even hits the health care industry. Once I had a workman comp case when I was a student (injured in the lab) and had to get an itemized bill back from the hospital. $25 for a throw away stiches kit, $50 for gauze, $220 for "Emergency Room Service/Bed Rental". When I asked why so high - I was basically told that the hospital pads its costs do be able to provide care to those who don't have insurance, or those who decided to not pay their bills. Not piracy, but you get the idea. Those of us who have the money carry the burden for those who don't. I don't mind the angle of providing care for the poor, but for those who didn't want to pay their bills?!? WTF?!?
So how does this all relate to MS's non-piracy clause. Simple, they now have subscription based software costs to make up for lost money due to piracy. They also charge more for the base OS, which is so buggy and unstable it ought to be them paying me to use it. So now not only might I be paying for software which doesn't work as well as it should, but I'm paying for MS's advertising in new markets where they lose money. Grumble. One more reason I plan to try and make my house MS free.
-When going for broke, go for Ithaca!
(rant)
:)
It's human nature, but it's a fallacy for young people to think that whatever music you listen to is in the majority. Even Britney's not the majority. It might be in 30 years, but it's not now. In a way, the record and radio companies are planning way in advance to clean up when the teenie-boppers come of age.
The majority right now is easy listening, classical and lite jazz. Elevator music. Billy Joel, Elton John, Kenny G, yada yada yada. Music people put on while doing dishes because it's comfortably ignored as background music. As time goes on the chaff will separate from the wheat and the 'best' stuff will stick around. That's how music works - we look at Beethoven as a singular event, but he wasn't: There were hundreds of other romantic composers, but the ones we have around now have stood the test of time, as cheezy as that sounds. He was part of a timeline and everything else gradually faded away because it really wasn't anywhere near as good.
A friend of mine has a sticker on his locker in the music department in college which said "It is a great tragedy that we don't have all the music ever written, but it is a greater victory that we don't have all of the music ever written."
In thirty years the musical landscape will be quite different than it is now. Britney will be easy listening. Billy Joel will be popular music like Rodgers and Hart and Cole Porter are now. Duke Ellington, Cole porter et al will be considered classical (parts of Gershwin already are, it's just a matter of time).
Classical music doesn't just stop at 19?0. It will swell to engulf everything that lasts in the public conciousness for more than, say, 75 years. Hang onto your pants, kiddo.
Triv
I have been to China, and believe me, piracy is a way of life there. You can get any Microsoft product for about $4 per disc. It seems that many people view it simply as buying a less expensive version, much as Americans might buy the store brand of paper towels instead of Bounty(tm). There was a time when the same attitude was common in the US. Ironically, copy protection simply added to the "possession of media == right to install" mindset.
The end result of all this piracy was massive market penetration, to the point where the average Chinese IT worker is "born and raised" on Microsoft products. It's easy to abandon industry standards in favor of the M$ proprietary trap when everything costs $4 per CD.
M$ first introduced product activation in Asia, allegedly because of the rampant piracy. When they realized how quickly the Chinese were prepared to drop M$ in favor of Linux, they couldn't give away the products fast enough.
It will be interesting to see how Microsoft handles product pricing in the various markets around the world. Their current pricing is encountering resistance from US companies, but not [yet] to the point of wholesale abandonment. US prices would be dead-on-arrival in less developed parts of the world, where the commitment to Microsoft is less, as is the availability of funds.
Sure, they can give away the product, but what happens when the market will tolerate a price that not free but far less than full price? Hypothetically, if Microsoft sells a product for $500 in the US and they blow it out for $5 in China, is that not a classic case of product dumping? If they do this, shouldn't I buy all my US licenses via my Beijing office?
From here on out, it will be damn hard for M$ to control who gets the freebies, who gets a steep discount, and who pays a fully-monopolized price.
Did anyone else think it ironic that some rap artists are endorsing the RIAA's position, considering that "sampling" is little different from consumer use of Napster?
Cheers,
Slak
I seem to recall ID approving of the piracy of Doom after it had been out a while. Their belief was that it was such a huge phenomenon BECAUSE so many pirated copies were out there, and that it drove sales higher because everyone felt they needed a copy, but not everyone pirated it.
- In hell, treason is the work of angels.
I can't wait for the day that Microsoft finally crack (no pun intended) the lockdown of Windows.
People everywhere will be so pissed off, and will be reaching for the Linux CD's faster than you can say insmod ntfs.o.
I think they know that though. Their current tactics are just to warn corporates to pay up. To be honest, I think Microsoft are resigned to home users running Windows for free, although they don't mind if they can get a few of the old timers to actually fork out.
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I've worked on projects that had close to 100% piracy rates. That is to say that almost everyone who used it was stealing it. This in no way helped me, in fact it drive the company under.
The difference is in the users. Your product was probably targetted toward the type of user more apt to steal the software. Windows is targetted at a much broader audience, and the majority of people do not pirate windows (if only because they pay for it when purcahsing a PC).
I know your situation is common though with smaller projects. Back in my shareware days, my product (DJ software) had about 100 downloads per day for a solid 3 years; yet, registrations were maybe 2 or 3 per week (add up bandwidth and it was generally a loss). Granted not everyone who downloaded it necessarily used it, but with less than 0.5% registrations, and the easy availability of cracks/serials/keygens for it...
Note that this product also had an unusually high rate of credit card fraud on attempted registrations, which coincides with the high piracy rate.
So Windows has the following advantages over "niche" software:
- Many users pay for it (eg, PC purchase) who may not have otherwise
- It's a much larger piece of software (more difficult to just find floating around the 'net, download and install)
- The more people use it, the more people standardize on it. Generally not true with software for which there exists compatible choices and competition.
And so on. These are luxuries smaller developers don't have.
Unrelated note, the RIAA is an unnecessary middle-man and I hope they go broke and leave, or wisen up to the times, I don't care which. I long for the day a motion picture soundtrack costs less than the motion picture itself (DVD) by at least half.
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