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

[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

[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)

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?

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 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

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.