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Piracy Economics
Reader Anonymous Coward the younger sends in a link to an article up at Mises.org on the market functions of piracy. The argument is that turning a blind eye to piracy can be a cheap way for a company to give away samples — one of the most time-proven tactics in marketing. The article also suggests that pirates creating knock-offs might just be offering companies market feedback that they ought to attend to. (Microsoft, are you listening?)
Or the marker of a market that changes very quickly. And I think that currently the OS market is both.
Once a market is mature and stable, each major supplier within that market will have a product for all market segments. ( With cars, almost every manufacturer has a cheap sedan, a mid-size, an SUV, etc. Books come in limited signed editions, then the hardcover, then the quality size paperback, then the pocket paperback. )
There are some markets that are inherently unstable - like fashion - in which illegal knock-offs will always be practical. But in most mature makets the legitimate sellers fill every niche so well that the marginal costs of piracy are not worth it.
MS will get pirated until they have half a dozen or a dozen versions of their product. It would be practical for them to give away the low end version.
PS: This even applies to labor markets. In that case we call the piracy 'slavery', and the low end versions 'volunteers'.
...wasn't there some sort of memo that was leaked from Microsoft that basically said the only reason why Windows 3.1 became popular was because it was the most pirated software ever?
As it so happens, I used to sell a product which required a simple registration key to upgrade to the full version. (The free version never shut off, but it had fewer features.) After noticing a few Google searches for " crackz", I thought about seeding a few reg numbers to promote the product. Alas, I never got around to it, but it would have been a cool marketing trick.
That being said, I don't agree with piracy in general. Only that it can fullfill certain market needs. If it gets too out of hand, though, it can become a serious problem to the producer. (e.g. Napster) Of course, you don't get in that position unless you're failing to meet your customer's needs in the first place. (e.g. lack of legal MP3s)
Javascript + Nintendo DSi = DSiCade
Please stop confusing legality with morality.
How we know is more important than what we know.
Pirate Economics 101:
1. Plundering
2. Wenching
3. Yarr!
Microsoft just won't be able to compete against a developer and testing community as large as the FOSS community. We are everywhere. And I dare say we are having more fun than the Microsofties.
I've been a member of the Mises Institute for years. It's good to see Slashdot picking up on their articles.
The author's assertion was that the innovator produces the initial, high quality product. Then the pirates produce low quality knock-offs to fulfill a market segment the initial innovator isn't fulfilling. In the case of the record industry, I'm afraid they're well past the point of innovation and the production of high quality products (at least as far as pop music is concerned). In that case they're selling a low end version of their music, but still deluding themselves into thinking it's a quality product.
Either the quality has to go up or the price has to come down.
Apparently you don't have an MSDN subscription. It always has 180 day trials of their operating systems.
Only the State obtains its revenue by coercion. - Murray Rothbard
Don't confuse illegal with shady either. The law can be just as shady, like prohibition, for example, or DMCA... or for that matter, copyright...shady law that steals from the public disguised as "incentive".
What?
Want to improve your Karma? Instead of "Post Anonymously", try the "Post Humously" option.
ah yes... but just becuase it's illegal doesn't mean you should stop doing it, it just means you should make sure you don't get caught.
(However if it's immoral, that's a reason for you to stop doing it.)
all language nazi's will burne in heil!
No.
Not sure who modded you insightful but I assume they work for a corporation. You are using the Fox News style of argument. Reduce everything to black and white / good versus bad / legal versus illegal.
Also, please stop using words like "illegal". That's also a simplification and, in many countries in the the World, wholly and utterly incorrect. You may be American (I assume you must be), but it's a big planet, your laws apply to your country alone. Please try to remember that, and remember that you are speaking to a global audience here.
The truth is that this is not a black and white subject, it is a grey one. It is not a rationalization to consider alternative economic strategies with regard to this. In fact, if software companies, the MPAA, and the RIAA, actually started doing more of that kind of thinking, then the need for piracy might be alleviated.
Keeping an open mind and exploring new directions is the only way media producers are going to win in any way that is sustainable.
My friend Ozymandias... that is not justification. That is not rationalization. That is reality.
Please stop confusing legality with morality.
...and for pity sake stop calling it piracy. I don't like rape or murder, both of which are crimes, but I don't go around calling rapists murders or vice versa!!!
NO! Please don't stop confusing legality with morality. That's not the answer. The answer is to bring the law back in line with what the populace believes is moral. The fact that legality and morality are so far divorced today is a sign of a corrupt sick society. If the large companies played fair with pricing and proof of copyright infringement, and if the penalties for piracy weren't inflated so much (an ineffective deterent!) the argument that you should be allowed to get a copy of the fruits of someone else's labour without contributing something back would be much harder to rationalize.
These posts express my own personal views, not those of my employer
When a law is unjust, people not only have a right to defy it, but a duty. Copyrights are unjust. They attack our culture, require the destruction of our privacy to be enforced, attack the free flow of information on the internet, and cause fragmentation to societies knowledge base of literature. The cost and effort to secure and enforce them is growing exponentially as society enters the information age.
The reason why anti-copyright behavior works so well in the free market is simply because copyrights are anti freedom and anti free market. http://davidlita.googlepages.com/copyrights/
Rationalizations? WTF! How about Copyrights are not "rights", theft and stealing is not copying, copyrights are monopolies and not "protection", and intellectual property is not "property". Hell, piracy isn't even piracy.
You are welcome to drop by anytime.. just bring your physical object copying device from the future with you ok? Speaking of which, can I have a copy of that?
How we know is more important than what we know.
No. That's how you end up with oppressive religious regimes.
If we're going to call for legal reform (and we should be, I agree) then let's call for a dedication to liberty. Live and let live. If you wanna do something that I consider immoral, and you're not hurting anyone, then I should have no say over what you do. Unlike the world we currently live in where the law has a say over what you do with your body, your mind and your copying devices.
How we know is more important than what we know.
I think we're studying piracy to see if it is worth cracking down on. There are certainly costs to preventing piracy and catching pirates. How much attention do they deserve? If piracy is a wash or a net gain, we shouldn't care. If piracy is a dangerous destabilizing economic force, than we should fight it harder. That is why it is worth studying.
Just because we already have policy on something doesn't mean we shouldn't constantly re-evaluate that policy to see if it makes sense.
Okay, this seems kinda bullshit to me... Why are we trying to prove that piracy, an illegal act, is somehow "good"?...
The human power of rationalization is quite strong indeed; no one is stupid enough to think that piracy is legal, and obviously people feel bad about it, so they try and make up stories saying how they're actually helping people by doing it. Yes, there are definitely valid points that need to be examined, as I said before, but still, it's illegal, and everyone knows it, so stop trying to justify it.
In case you don't know this, the Ludwig von Mises Institute, where this article came from, is very much a pro business and capitalism libertarian organization and they don't generally like theft, infringment, or other crimes robbing people. There is no way in which they would justify piracy. In this particular case they are simply arguing small scale piracy may help a business that is seeing it's product(s) pirated.
FalconShould there be a Law?
These are the "Educational Editions" of Office, XP and now Vista. You are supposed to show a valid student Id when you make the purchase, but shops are hectic, busy places and luckily most households have a couple of students lying around anyway. Conveniently some of these allow the software to be installed on multiple machines. So when Joe frowns that some Microsoft software is too expensive, he has a way around it. Microsoft get their money. Not as much as they would have liked, but they get it anyway.
Microsoft _have_ to know this goes on: If they wanted to they could make their educational program so draconian no one would use it, but households shrugging and installing Ubuntu on their machine is Microsoft's worst nightmare.
No. For christ sake get this: IT IS NOT ILLEGAL.
If you create unlicensed copies you owe the copyright holder proper compensation, but you have committed no crime. There are currently laws under way in the EU and US that will change this, but status right now is that copyright infringement is not a crime, and not illegal!
The law can be just as shady, like prohibition, for example, or DMCA... or for that matter, copyright...shady law that steals from the public disguised as "incentive".
Prohibition was and the DMCA is bad, but copyright itself is not bad. The only bad thing about copyrights as it stands now is that the copyright term is way too long. By giving writers and artists a limited monopoly on what they create gives them an incentive to create. If there is no incentive, financial, to create then many things won't be created, which is a greater theft to the public. Many people won't spend years of thier life creating something if they know they won't be able to feed their family while working on it.
FalconShould there be a Law?
I always wondered why all of the 30-day software demos from Macromedia could be actually registered and made permanent; not only that, but they could be registered using an enterprise key which did not even phone home. AND the enterprise key could be located with a simple Google search which did not even require you to click through the results page to retrieve the key. The only conclusion I could draw (possibly wrong, I'll freely admit) was that Macromedia wanted people to do this so they could use the products at home for free, which would lead them to tell the boss at work that they had to have these tools to do their job. It just didn't make sense otherwise why they would make it so extremely easy to do this. (BTW, my copies have always been paid for...) So from my point of view, I think there may be some validity to the idea that there are software publishers that actually facilitate or encourage piracy.
I remember the time of Windows 95.
When you installed that operating system
there was no activation.
There was also no
serial number verification
since you could just enter
an empty number and the system would install.
That was still not corrected with Windows 98.
When it is so easy to install
an operating system,
it helps to get of market shares.
The world belongs to those who get up early. - I'm far from being the king of Earth then
We cover the full spectrum from run-the-economy-by-vote communists to market-worshiping anarcho-capitalists. Enjoy!
Thing that worries me about piracy is that people get used to it. Maybe MS can get market share through piracy. Maybe the RIAA can get viral marketing through piracy...
...but I know a guy who makes a living by creating drum and other sounds that people use to make electronic music. It's not a big operation, just him and one other guy. When you order a DVD he burns one by hand and mails it to you. Anyway, someone just uploaded ALL their products to Bittorrent, and he can see all these people posting about how cool they are and how they can't wait to download them. Needless to say he's pretty despondent.
And before people start with the 'information wants to be free' and 'find a new business model' - why should he? This is what he's good at, people want his stuff, why shouldn't they pay him for it? I mean, I have written free software... while earning a fat salary working on other stuff at a hitech corp. It's not so easy in other areas though.
</RANT>ccalam - acoustic versions of new songs.
is that giving away samples with limited lifetime will introduce your product while maintain the potential customer because the trial product will eventually have to be replaced. But digital copies do not have such limited lifetime. And since any number of copies can be made, you loose not only the client that got a trial copy, but potentially the entire customer base. And those who offer complete trial versions soon find them to be cracked.
The solution seems to be to offer limited versions that will show the client how great the product is, and how much greater it would be if they buy the official release. Say music in 96kbps mp3, it's ok on your iPod in the subway, but put it on your stereo and it sounds awful. Or the word processor with reduced dictionary, limited fonts and doesn't support large fonts - say above 18pt, or doesn't contain the print facility.
Crackers won't add missing data to a trial version of a song, and they won't add missing functionalities to a program.
You seem to severely misunderstand what "unequal" means in a semantic connotation. When two terms are labeled "unequal", it says their meanings are "not always equal". It does not say their meanings were "always unequal". So you're right only in one aspect - your polemic constitutes a really bad case of "rationalization" indeed. Which is not saying a thing about the "piracy" issue, though.
Does anyone else find the idea of a wikipedia article about the tyranny of the majority somewhat ironic?
I am absolutely sick and tired of hearing people justify their *ILLEGAL* copying activities which achieve *ABSOLUTELY NOTHING* for me as an honest consumer of music and movies.
For starters, the movie and music companies are nasty and greedy multi-national conglomerates who would like nothing more than to force every consumer into a rental model for their media so that they have a nice, regular revenue stream for basically doing nothing. All that piracy does here is to give those same companies the justification they need to do what they were going to do anyway - it just makes it easier for them to do it because piracy turns it into a political agenda meaning that governments can get involved in pushing DRM and the like through.
Secondly, there is the issue of the poor quality of movies and music in general today. Far too much of the populace believes the hype and marketing lies surrounding the release of new albums and movies which invariably leads to them being duped and paying out good money for rubbish. Consequently, people are wary of paying money for CDs, DVDs and cinema tickets so they justify piracy as a defence against not being ripped off. This, of course, leads the media companies to churn out the same rubbish but with tighter restrictions for all users, whether they are honest or not.
The idea that CDs and DVDs are overpriced is utter drivel, quite frankly. If you spend time looking for good music and movies at good prices, you become a discerning consumer who rapidly becomes pretty satisified with the quality of the albums and films that you buy. If an album has just one or two good songs on it then you don't buy it, it's that simple - and you never buy a CD or DVD until you are sure that it is worth the money.
Unfortunately, too many consumers have become far too liberal with their "disposable income". They're constantly buying new stuff, maybe to impress peers, without thinking about it, they end up getting ripped off and to ofset their anger at being ripped off, they go off again and treat themselves to more overhyped rubbish...
The solution is simple - if it's not worth the money, don't buy it. If it has DRM on it, don't buy it.
Gentoo Linux - another day, another USE flag.
I'm just a wee little guy with a software business I run in my spare time (it makes bingo cards for teachers: http://www.bingocardcreator.com/ ). Can you run by, exactly, how I am stealing my income from writing (and marketing/supporting) that?
Its not like people were happily playing bingo for free one day and then, in Carmen Sandiego-like fashion, I just grabbed the entire concept and absconded with it, then hid clues to my location while confounding the player with a series of inept accomplices. There are at least 12 people/companies who sell or offer for free similar software. There is even an OSS bingo card maker. (Its buggy, unsupported, has a GUI which can induce heart attacks, can't actually print the cards it creates, bluescreens some windows systems on an install, and hasn't had a patch in years... but its Free!)
It wasn't like there was a copy of the 2,500 lines of source code sitting online for free since the 1980s until I sent my squads of lawyers to DMCA anybody who looked at them. No. I saw a hole in the market, because the existing software which creates bingo cards for teachers was a) too hard to use, b) too expensive, c) poorly marketed and d) in general, sucked, and the non-software ways to get bingo cards are overpriced (educational publisher) or time-consuming (making them by hand).
So I spent a week of my own time and fixed that. Had I not spent a week, that problem would remain unfixed, and the circa five thousand people who played a game of bingo this year that was printed from my software would be bingo-less. Two hundred teachers would be wasting their time writing bingo cards by hand when they could be educating kids. Little kiddies would be missing their Friday sight words fun activities (See aye tee CAT! I win bingoes!). For making the world just a wee bit better than it was before I sat down, yes, I think I deserve to get compensated. Or to take all the moral freighting out of that word "deserve": had there been no compensation in the offing, I would not have written this, and the world would be just a wee bit poorer than it is today.
So, again, how am I stealing from anyone?
Help poke pirates in the eyepatch, arr.
There are a few companies that don't get pirated: The ones with good support. There are actually a few content product (read: software) that rarely if ever get pirated because what people seek in it is the support and the updates. And I'm not talking about the usual bananaware, but rather software that ships finished but gets more goodies as it matures. This may even cost a monthly fee, and still people come back and will pay, especially companies gladly do.
This is harder for music or movies, granted. But given that the "pirates" are usually relying on the 'net, here's an idea. It's even free this time: Give the legal customer additional value through the 'net.
What would come to mind is that with every CD you hand out login info for your site, where the legal user can download wallpapers, autographs or other knickknack from his star. Maybe give meet&greet sessions every few months, but of course only to those that legally bought the CD.
The cost for such additional value is minimal. What's the price of some hypestar, hmm? But the true fans of him will first of all love you for it, and (and that's maybe more interesting for you), they will buy his stuff to get access to the page, just to be "close" to their star.
You bet this would curb piracy.
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
You seem to totally miss the simple fact that art has existed far longer than copyright. Care to explain that?
Sure we may not have 100 mil movies... but do we NEED 100 mil movies? Do we need all this FX-saturated tripe? Sure, sometimes something good comes around... but almost always in addition to, not because of, that 100 mil FX.
And as an "artist" (though this term I think is used far too liberally) I can say that nothing can be made without copying or at least seeming similar to something else. Copyright and patents in the end will stifle art and invention. What if the use of dwarves and elves similar to those in LOTR was strictly controlled? It would have been unlikely to promote any new creations, but it would have caused the stillbirth of whole genres of books, movies and games. What if the mouse was patented and they company refused to license it? This is where our idea-control focused society is quickly spiraling to.
Have you ever created anything? If you truly think what you say is true, I am guessing you haven't.
Great Intellect...
Oracle has been actively embracing this kind of viral marketing for a long time. They send you free developer's CDs, offer downloads of fully functional latest database and application server products without any restrictions. This is probably a major reason why they are so popular among developers. Their strategy works like this:
1. Offer database and development tools to developers free of charge
2. Wait until applications built by these developers get into production
3. Call and remind that database and development tools are not free
4. Profit!
The oldest Copyable products are books, I have a card that allows me to use these without charge and then return them with out paying a penny, I can use book without ever intending to buy it and without paying the copyright holder anything ..
So obviously the publishing industry is on the point of collapse and no-one is selling books anymore and we should close these "Public Library" places down!
Puteulanus fenestra mortis
Where does this argument about copyrights not holding water, come from? Do you really think so many books, magazines, and movies would be created if there was no copyright? Can you offer proof Steven King would of written books if he couldn't get a copyright?
The "proof" is in the fact that people were producing works of art for most of human history and that remuneration was usually not the driving incentive in their doing so (since there are many examples are working artists who received little recompense during their lifetimes yet carried on producing expansive collections).
Before copyright was even dreamed of, people were producing works of art. The evidence is already there. Maybe the specific names you mentioned wouldn't have produced their works of art without copyright, but equally, maybe they would. If anything, maybe copyright has been detrimental to the various art forms - since it attracts people who are "only in it for the money", rather than people who genuinely love their chosen medium and want to share that passion with others. I can't prove that's the case, but your comment that you wouldn't even consider writing a book without the prospect of making money from it seems to support it. I can't help feeling if there were more people in it for the love and less in it for the money, we might all enjoy generally better standards in art.
So, in short, you didn't create anything under copyright, but you wouldn't had created anything without copyright either, so copyright is better than lack of copyright. I guess that's a very good argument, as far as pro-copyright ones go.
Forget magic. Any technology distinguishable from divine power is insufficiently advanced.
You've got a pretty obvious bias when you throw out a "prove it" demand like that, with a weak anecdotal argument ("I didn't write a book because I couldn't figure out how to make money doing it") against the respondee.
As far as rebutting your anecdote is concerned, I make a decent living writing software. I'm not getting paid because of copyright (since I'm selling my services as a developer, not the software itself), and the company isn't getting value from my service because of copyright (they get the value from actually using the software I created for them). Just because _you_ can't see a way to make money without copyright doesn't mean that such a way doesn't actually exist - it just means that _you_ don't have a good enough imagination.
Let me flip your question on its head (essentially restating your respondee's post): I've heard and read ad nauseum that copyrights encourage creativity, yet not once has anyone proven it to me. No matter how many times I've asked or searched, I've never read or been referred to any peer-reviewed study supporting the idea that copyright encourages creativity.
It seems highly counterintuitive that a mechanism like copyright (which at its most fundamental is a mechanism that discourages the free expression of ideas) is going to encourage societal creativity, but it gets repeated like a mantra by proponents of copyright, without any kind of logical or evidentiary support. A lot of copyright proponents even mistakenly think that IP has something to do with free-market capitalism.
Before you go around enforcing a bunch of laws that override personal property rights, you'd better make darn sure you're going to get a societal payback that makes that violation worthwhile - but so far, IP proponents keep failing to provide that proof.
Microsoft is giving away their latest dev tools because THEY DO NOT MAKE REAL EXECUTABLES!
Everything MS compilers make now is P-code. You have very little control over how your program actually runs. Dot-NET handles it all for you.
For most of my apps, this is okay. I still have Cygwin-C compiler and Linux when I need a big hammer. I even still have VC++ 6.0 and can code in assembly.
Granted, 98% the P-code that runs on Dot-NET is just fine, so I use the free stuff too.
But be aware, MS is giving away these new compilers for a REASON. They do not want programmers to be able to create fast, non-MS managed code.
That is just wrong.
What in flying fuck are you talking about? It is illegal. Did you mean to say that it's not criminal?
There are two different types of illegal activity, criminal offences and civil offences. Copyright infringement is usually a civil offence, and that's what people mean when they say that copyright infringement is not a crime. They don't mean that it isn't illegal, they mean that it's a civil offence, not a criminal offence. You appear to be mindlessly repeating a factoid you misunderstood the first time around. Please don't talk nonsense.
I guess that depends on how much you like the idea of a free market.
It is a fact that copyrights are monopolies in the market. Monopolies are incompatible with a free market. If you try to combine these two, piracy is an inevitable result.
Right here, asshole: http://slashdot.org/faq/editorial.shtml#ed850