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.

Comments

Beggar.

[DarkHelmet]

Hey Microsoft, ummm... Got any goods that you can offload to me?

I won't put linux on my machine! Pinky Swear!

Note: I'll just put FreeBSD on instead.

Groan

[Reality Master 101]

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.

Sheesh, talk about missing the point of the article. The article is talking about developing markets, not the US. Microsoft cares deeply about piracy in the US. The point is that in developing markets, Microsoft wants to establish a foothold.

The other difference is that Microsoft has competition, while there is no direct competition for music. In other words, if you don't like the price of Bruce Springsteen, you're not going to switch to Broos Sprigstein who might be cheaper.

Re:Groan

[Reality Master 101]

Yeah and SOOO many people listen to Classical music.

Huh? You must be young. Sorry dude, but music doesn't survive for 300 years if no one listens to it. And they'll be listening to it in another 300 years. Think they'll still be listening to the latest release of "L33t D3ath P1zza" in 300 years?

Re:Groan

[Dthoma]

"Sheesh, talk about missing the point of the article. The article is talking about developing markets, not the US. Microsoft cares deeply about piracy in the US. The point is that in developing markets, Microsoft wants to establish a foothold."

Or, to sum it up, Microsoft won't bother alienating their market until they've got a market to alienate. ;-)

Re:Groan

[Washizu]

In other words, if you don't like the price of Bruce Springsteen, you're not going to switch to Broos Sprigstein who might be cheaper.

Don't knock us Broos fans until you've heard his early stuff.

Re:Groan

[Triv]

(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

Re:Groan

[io333]

I wonder how all this stuff with the piracy and RIAA is playing out with the classical music market.

As a classical violinist, I have some sense of how the current classical scene is and has always been:

Since western musicians have existed, they have always been considered weird (though not nearly as weird as *actors* (!)), treated as servants, and paid accordingly (i.e., little to nothing).

While that changed for a few pop musicians during the 20th century, most classical instrument players have continued, as usual, to either barely stay above the starvation line, or have found a real job to supplement their meager income. There have been a few extremely rare exceptions (e.g., Pearlman) though even those folks make quite a bit less than you might think.

If you dig around and find out how much say, the basoonist in a famous world class orchestra makes, you'll immediately realize that classical musicians are in it for love of music as it is impossible to be there for love of money.

My gut feeling is that as the younger generations get used to paying *nothing* for any music that they want, the highly paid pop performer phenomenon will be considered a 20th century anomaly, and the only money left to be made in the pop scene will be, like it is for classical players, through performance, or through hire.

It wouldn't surprise me if in 15 years BonJovi's main source of income is weddings and birthday parties. I am saying that with a serious tone and a straight face. (no emoticon)

Re:Groan

[cjpez]

Think they'll still be listening to the latest release of "L33t D3ath P1zza" in 300 years?

Hey, don't start ragging on L33t D3ath P1zza, now. They r0x0r. h4rdk0r3. Their latest album, "ph33r th3 t0pp1ngz" is nothing short of genius. Frankly, I'd be surprised if they're not required listening 300 years from now, in universities all over the solar system, as an example of the Golden Age of Music.

Re:Groan

[Dirtside]

I disagree with your main contention. The superstardom of the 20th century has been possible because of three things:

1) Recorded music. No longer do you have to have a trained human play music for you -- you can have a machine do it, and have it sound just like the original performance (more or less), exactly the
same, every time.

2) Transportation technology (trains, planes, and automobiles). Copies of music can be shipped across the entire country; music is no longer as highly regional as it once was (someone living in California in the mid-1800s might never even hear of a famous performer from the East Coast).

3) Electronic communication (radio, TV, telephones, the Internet). Now you don't even have to have a physical copy of the music sent to you -- it can be sent electronically, faster-than-light.

As a result, mass knowledge of individual musicians has become possible. Two hundred years ago, a few thousand people might have heard of a famous artist. Today, millions and millions of people have heard of them, and can hear all of their music. The only thing that's still "limited" is live performance -- the artist can only be in one place at a time, and due to various physical limits, only so many people can be within sight of the artist at once, watching him perform.

Even if the big labels all go away forever and are replaced by countless independents, we will still see a few superstars packing venues. The best artists with the widest appeal will still be successful, and will still have numerous fans, who will be willing to pay to see them live.

I've always known this

[outsider007]

Let's say you're a 14 year old kid and you're running a pirated copy of windows vs. a legal copy of linux. What happens when you grow up and get an IT job for a small company? you recommend using windows because you're familiar with it. The same is true for productivity software (office,photoshop...) but not games and definitely not music.

Microsoft has always done this

[pheph]

Here is an article that quotes Gates in 1998:

"They'll get sort of addicted, and then we'll somehow figure out how to collect sometime in the next decade."

1.) Get user's addicted to our software
2.) ????
3.) Profit!!!

Re:Microsoft has always done this

[sporty]

Isn't that how drugs are? The first hit is free....

Re:Microsoft has always done this

[Amazing Quantum Man]

"They'll get sort of addicted, and then we'll somehow figure out how to collect sometime in the next decade."

"Here, kid... the first sample's free!"

JUST SAY NO!!!!

Brought to you by the Coalition for a Drug^H^H^H^HMicrosoft Free America

Let users understand the cost of Windows

[Anonymous Coward]

This is exactly why i do not offer to give copies of Windows to people anymore.

If you want Windows, you can go ahead and pay for it yourself. Then you'll understand even better why Microsoft is losing market share to Linux. It's not cheap for an individual, and for a business it's highway robbery. If the price is too high for you, well, why not install something free?

Please think of the starving artists!

[sys$manager]

Because when you download music, you're taking bread from Britney's mouth! She can barely afford to LIVE! Please, think of the starving artists before you download that next MP3.

Come on, does the RIAA really expect me to take a PSA from Britney Spears or bling blingin' Nelly when it comes to theft of music? Are they trying to make us feel bad for these people who get paid truckloads of money and have no talent? Maybe they should show me a non-RIAA artist who lives out of their car and plays dumpy clubs instead.

NOTE TO RIAA: GET A CLUE.

Re:Please think of the starving artists!

[Kierthos]

Tell me about it. This is why a lot of people pirate music. Because they would rather have that one song for free then 17 songs of crap and that one song for $12-$18.

I mean, sure, there are people who collect every single mp3 ripped from an album. But they are the only ones that RIAA should be super-pissed at, because the obvious indications is that they would have bought the album. Me, I'm not about to buy a 80s anthology album just to get After The Fire's "Der Kommisar". I am likely to go out and buy System of a Down's "Toxicity" album though, but only because every song I have heard off of it is good (IMAO, of course).

What the RIAA needs to go is remove their heads from their asses and come to the realization that piracy, in some form or another, will always exist. If they can offer a product that is better in terms of quality, availability (as in being able to buy select songs instead of the entire album), and lower the price, they will see a greater return on their investment.

Kierthos

I really have to wonder...

[gosand]

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.

I've just realised something.

[Dthoma]

I'm starting to think that the returns by allowing privacy are something like the Laffer curve with piracy along the x-axis and benefit along the y-axis; by allowing no piracy, then you don't benefit, nor do you benefit by having all copies of your software pirated. However, if you give some leeway and allow some of the copies of your software to be pirated, then it gives you maximum benefit. Unfortunately, it is entirely possible that the whole piracy vs. benefit graph is more reminiscent of a Neo-Laffer curve, where there are so many possible factors which can affect it that it is impossible to tell in advance what effect piracy will have.

I can see it now!

[asdfasdfasdfasdf]

A wrinkle laden aging speed metal rocker, wrapped in shredded leather pants; he's drinking from a bottle in a paper bag; sad music is playing.

The voice over says "When you pirate music, you steal money out of artists pockets. Now, how is this poor man going to afford his presidential suite, hookers, and 3 day liquor and heroin binges?"

Then a black screen with white text comes up:

"Help the Fella, Don't Gnutella."

not really suprising

[jcsehak]

from the article: A print campaign, featuring such performers as Eminem, Madonna, Missy Elliott, Elton John and Luciano Pavarotti

Pavarotti is quoted to have said "Downloading music is wrong, because it's virtual. You're not getting the real thing. You're using technology to circumvent actually paying for it; you're taking the easy way out... Lip-synching a concert however, is perfectly okay; there's nothing wrong with that, the audience can't tell anyway, ...*sigh*... yes, I'm a tool."

Elton John on the matter: "Um, I really really need you're money since I'm WAY in debt, no, I didn't get screwed by my label, at least I don't think so, I was kinda high all the time."
"Elton, you spent $40,000 a month on flowers."
"They were pretty..."

disclaimer: don't know if it was exactly $40k, but it was some insane amount like that.

Hey, you can't use "RIAA" and "logic"...

[Quixadhal]

...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.

Can't wait for the commericals

[GuyMannDude]

With any luck, the anti-music-piracy commericals will be as much a scream as those "Today I killed a judge (because I bought drugs)" drug-terrorism ones:

• "Today I starved a song writer"
• "I just destroyed a pop-star's lifelong dream."
• "Hey, it's not like I'm hurting anyone!" (jump cut to a fired record company executive taking out his anger on his wife and child)

GMD

Who's stealing what?

[Anonvmous Coward]

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.

Re:Who's stealing what?

[Anonvmous Coward]

That problem exists with watches, or any other items today. I could buy a VCR, tape a show I want for up to 30 days, and then return it. Despite that risk, they offer 'satisfaction guaranteed' return policies anyway.

The problem is that you have virtually no way to find out what's on the CD before you buy it. Some (and I emphasize some) places offer a way to listen to the CD. But let's be realistic: Who's going to spend 60 minutes in a store just to hear one CD?

I realize that rational's a little extreme (who's really going to listen to an entire CD to determine purchase of it?, but P2P makes it easy to do exactly that, at 0 cost to the RIAA other than they lose the opportunity to keep your money.

Sorry, but I don't sympathize with the RIAA. If the customer says "we prefer buying individual songs" their strategy shouldn't be "well we'll grease up the politiicians so that the law says you have to follow our business model."

Intersting

[karb]

Here are some more excerpts from the ad series. Very informative.

• Dave Matthews : "When you create programs to help blind people read things, it's the same as going into the store and stealing a CD."
• Pink : " When you research copy-protection schemes, it's the same thing as mugging a homeless man on the street and stealing his wheelchair."
• Eminem : "When you listen to internet radio, it's the same thing as assaulting somebody outside a club, except without high-priced lawyers."
• Bruce Springsteen : "Not letting the RIAA hack your computer is the same as clubbing a seal."
• Michael Jackson : "Creating digital to analog converters is the same as running a massively corrupt oligopoly that uses payola and political influence to maximize profits."
• Busta Rhymes : "Using open source media players is the same as screwing artists out of money, only without the exorbitant salary of a record executive."
• Jonathan Davis of Korn : "AGH WHOO HAGH BOOM BAGHCK, CHA CHA CHA!"

Too true. Stop the insanity.

First hand experience, this is true.

[cswiii]

My girlfriend is from Beijing originally; We went over there back in April-May, on vacation. I was talking with her brother once about computers -- well more realistically, my gf was translating for us -- and I mentioned that I don't use Windows, that I use Linux. When he asked why, I went on about a few of its strong points, one of them being that it was pretty much free.

His response was that since piracy is so rampant in China, Windows is, in essence, free as well. He added that he doesn't forsee people leaving the windows platform, as long as it's so readily available on the black market. If serious crackdown began to occur, there might be a move otherwise, but until then, there was very little chance of an alternate OS being adopted.

There was a bit more in the discussion too, but I can't remember offhand what it was. In any case, it put things in a really interesting light.

Competition from Linux forced M$ to do a 180

[dcavanaugh]

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.

Re:Depends on the artist

[gosand]

Some artists like Dr. Dre, Eminem, Metalicca are very opposed to piracy, and p2p in general. You have other artists like Prince, KRS-1, Tribe called Quest, who are all for it. The question is, why are you in the game? Are you in the for the love of the music or the love of money?

I don't think anyone argues that the artists should be compensated for their work. But there is this huge, controlling middleman between the artists and the public who compensates them. The artists who are against online music (let's not call it piracy, more on that later) are against it because they believe, or have been lead to believe, that it threatens their livelihood. It doesn't.

The only reason online music is considered piracy is because of the business model of the music industry. If CDs were available for a reasonable price, there wouldn't be as much incentive to copy and distribute music online. But beyond that, it is obvious that being able to download music is popular. Why not embrace it? Most artists make their money from touring anyway, because their contracts with the record company gives most of their royalties away. So they have to tour to make money. How is this different than giving the music away, and still making money on touring and merchandise? Or special edition CDs with extra features?

It is painfully obvious that online music could be a huge business, but the record companies refuse to acknowledge that because they fear it. They should embrace it! If it is so easy for average music fans to make digital copies of music, why is it so hard for them to do it and still make money? It isn't, they are just stupid , power-hungry, greedy bastards.

I don't care if this gets modded as flamebait or troll, it is the truth.

Re:Isn't this

[mentin]

May be the answer is whether you are a monopoly or not? From the post:

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.

Even the poster of the article argees MS has something to compete with (Linux). RIAA does not, it owns every record. So it can crack down on piracy without benefiting competitor.

Britney Spears Hasn't Lost a Cent Because of Me

[Nintendork]

I download just as much of her music as I purchase...None

Uh...no

[SomeOtherGuy]

Brittney honey -- it is not music sharing that is causing a drop in your record sales...Hell just ask Tiffany & Paulla Abdual (sp?) -- they went through the same tough times, and could not even blame the big bad music sharing thugs. And to M&M -- What would it be 15.5 million instead of 15.3 million units moved if there was no music shareing? (Somewhere Vannila Ice is dreaming of being so popular that millions would download his music for free...)