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Cutting Prices Is the Only Way To Stop Piracy
Stoobalou writes "The only way to stop piracy is to cut prices. That's the verdict of a major new academic study that reckons copyright theft won't be halted by 'three strikes' broadband disconnections, increasing censorship or draconian new laws brought in under the anti-counterfeiting treaty ACTA. The Media Piracy Project, published last week by the Social Science Research Council, reports that illegal copying of movies, music, video games and software is 'better described as a global pricing problem' — and the only way to tackle it is for copyright holders to charge consumers less money for their wares."
Netflix streaming is a good example of good pricing vs content offered. TV shows and movies sold on the iTunes Store is a good example of bad pricing. TV Shows in HD should cost 99 cents to own, 50 cents to stream and SD shows should cost 50 cents to own and 25 cents to stream. Movies should be priced at least half if not a quarter of the price for the DVD or BluRay version.
The problem that I have is that many of us don't WANT to be a pirates, but the studios heavy-handedness and greed make it almost impossible NOT to. I am perfectly happy buying a blu-ray or DVD. But the studios often throw up so many road-blocks to me as a legitimate consumer as to make it impossible.
I DVR "The Color of Money" (one of Scorsese's best, IMHO) in HD and I want to buy a copy that won't disappear the second my DVR dies. But, guess what? The studio says I can't (the only legally available version is a crappy non-anamorphic DVD that looks awful on a modern TV). So I'm left with the option of Pirate Bay or illegally ripping it off my DVR (both of which would make me a pirate in their eyes). I want to buy it legitimately, but the studio says no.
I DVR "Space Race: The Untold Story" (great docudrama, BTW) in HD from the National Geographic Channel. Same deal, want to buy it. But this time the studio won't even let me buy a DVD in the U.S. (much less an HD blu-ray). It's only available in Region 2. So, even if I import it, I would now be forced to illegally modify my DVD player to watch it. Want to buy it. Want to be honest. Nope, I would have to rip it from my DVR if I wanted to own it.
Even with the blu-rays and DVD's I *can* buy, I'm stuck watching 5 or 6 forced trailers at the beginning of each (many studios not even letting me skip them). Don't want to spend several minutes fighting with your player just to watch the goddamn movie you paid for? Better go off to Pirate Bay, because that's the only way you're getting it, buddy.
To Sony, Warner, Paramount, et. al.: Stop forcing people to be pirates with your fucking DRM, your greed, your region coding, your goddamn bizarre distribution rights agreements, etc. and you'll find there are a LOT more people willing to actually pay for your stuff than you think.
SJW: Someone who has run out of real oppression, and has to fake it.
> I rather spend $50 and have a great game than small little games for a few dollars.
Fortunately people don't want that $50 over-priced nonsense and show otherwise....
http://www.techdirt.com/articles/20090219/1124433835.shtml
Valve dropped the price on L4D and sales went up over 200% !
* 10% off = 35% increase in sales (real dollars, not units shipped)
* 25% off = 245% increase in sales
* 50% off = 320% increase in sales
* 75% off = 1470% increase in sales
http://www.g4tv.com/thefeed/blog/post/693342/live-blog-dice-2009-keynote-gabe-newell-valve-software/
"Valve decided to do an experiment with Left 4 Dead. Last weekend's sale resulted in a 3000% increase over relatively flat numbers. It sold more last weekend than when it launched the game. WOW. That is unheard of in this industry. Valve beat its launch sales. Also, it snagged a 1600% increase in new customers to Steam over the baseline."
"Apple proved you can cut down on piracy with DRM with their App store for the iPhone and iPad."
No they didn't; they did it with pricing and convenience. The somewhat-loosely-restrictive DRM on Apple's wares is easily broken. What the iTunes and App stores have shown is that if the prices are perceived as reasonable, and the DRM doesn't get in their way (much), people will not bother with piracy.
http://alternatives.rzero.com/
This is a dupe, links to an article that links to a study that has already been posted here: http://yro.slashdot.org/story/11/03/07/180210/Piracy-In-Developing-Countries-Driven-By-High-Prices
Basically, music and software are priced to USA's average wage. Since the cost of life in other places is lower, and wages are lower, then it becomes prohibitively costly. Hence piracy.
In soviet russia the government regulates the companies.
I'd suggest that their DRM really only works because of the low price of apps. Sure you can get around it, but if it's going to cause you problems in the future--i.e. with further updates--that are going to make you waste time and effort, and you can avoid that waste by spending $0.99, that's what most people are going to do.
I can't cite anything, but I'm absolutely certain that I read somewhere that pirated apps can be easily installed on jailbroken phones.
So a combination of low price and just-annoying-enough DRM is probably the real key.
The CB App. What's your 20?
if you charge a fair price for the product (which is fair for the market concerned), make the product easily accessible to people who want it, AND DON'T TREAT THEM LIKE CRIMINALS most people will be happy to pay for your product. The ones who don't want to pay even then? You really weren't going to make any money off of them anyway.
The answer to this is cutting out middlemen.
-- if you mod me down, I will become more powerful than you can possibly imagine
How many times do we have to go over this? With theft, you're removing something from the owner so he/she no longer has that item - that's never an issue with copyright infringement.
They are two entirely different violations of the law, just as arson and cannibalism are two entirely different violations of the law. You can try and tie yourself up in a pretzel trying to say that oranges are just like apples, but it just doesn't work. And please, pretzels, skip all the usual straw men - copyright infringement is still a violation of the law and no one is claiming otherwise.
I am selling an iPhone game at 0.99 $ and there's still people pirating it. Does it have to be even cheaper?
Try selling at it $5.99 and see what happens to the app's piracy rate...
With the first link, the chain is forged.
The easiest way to stop illicit trade is to remove the huge profits. True for software, true for street drugs, true for pretty much any commodity. Prohibition doesn't work; lack of profit does.
--- Bill
I agree, they won't ERADICATE piracy with lower prices.
I actually think the sales numbers/experiment from Steam/L4D speak more about charging first adopters a premium, then tapering off your pricing as the new hotness factor rolls off, promoting sales later on for basically free. Using that model alone, you can charge less up front, and still taper the prices off and come away with the same net income, just over a longer period.
Don't worry about the people pirating it, just make it the price at which you make the most money even when some do pirate it. If making it $0.50 would convert enough pirates to buyers than do that, if not don't.
the only way to tackle it is for copyright holders to charge consumers less money for their wares
This isn't hard, nor is it novel. The cost of this media has stayed reasonably steady while its perceived value has dropped considerably. I haven't downloaded a movie in the past 5+ years, yet I've stopped buying them new. Five years ago, I'd buy a used movie for $10 as long as it had some featurettes. Now, my threshold is probably $7, which is four dollars less than five years ago (when adjusting for inflation). I bought In Rainbows for $5 and the Humble Indie Bundle for $20.
Use my userscript to add story images to Slashdot. There's no going back.
No, it doesn't prevent people from using the app store. My iPhone is jailbroken and I use the App store (for both paid and free-as-in-beer free apps. I have exactly zero "pirated"[sic] software on my phone. I use the jailbreak for:
BSD userland
OpenSSH
SBSettings (and all the free plugins)
Action Menu
Nagios (no joke - I monitor servers on the go!)
NO pirated software. I use my phone a LOT, and my very highest 3G bandwidth usage to date (on my unlimited plan) is 1.8GB, when I used netflix a lot while on a trip.
There are reasons to jailbreak which have nothing to do with "piracy"[sic].
The Christian Right is Neither (Christian nor right). See: Matthew 23, Matthew 25, Ezekiel 16:48-50
Reducing prices makes a big difference in how the consumer perceives what they bought. It is actually rare to have a company succeed by increasing prices by distorting the value of their product (for example, Apple). The music industry for example has super high prices and those prices have been extremely high forever. Even at $10.00 per CD the prices is outrageous.
Lately I've heard about how some book and program authors have made significantly more money selling their products at $.99 than even at $2.99. Sometimes the income has risen dramatically. The problem with the music industry is that they want to keep their old business model and sell at the same price thus keeping themselves living as billionaires. The consumer on the other hand has said "definitely no" to those prices. Music stores have gone out of business and the sales emphasis is really focused on digital online sales. But the music industry keeps pushing the numbers because they think they'll make even more if they box us into their old price structure.
The internet changes one significant variable. That is distribution. The internet gives everyone a chance to open their own stores online. Buy what you need JIT and resell. You do the shipping and maintain a minimal workforce. Contrast that with what the music industry wants--to control distribution. In controlling that channel they can determine the prices, even going so far as having the RIAA member companies fix the prices. The internet widely opens almost every market to anyone. Getting your target audience's attention or even growing your target audience is vastly simplified. This is far different than it was even 30 years ago.
The consumer knows it costs less to produce digital works and to distribute them, therefore there's no need to keep paying the high price, so they download the music for free instead of caving in to the music industry's demands. What the music industry doesn't understand is that the ability to get the attention of more people and to let them sample the music is vastly increased via the internet. That means they can continue to grow their businesses with digital sales at significantly lower prices because of that access.
So, to me, the basic premise of price reduction is spot on. Dunce-heads in various industries affected by free digital downloads are killing their own business and giving away the market to others to control (i.e., Apple, Amazon, etc.) To those dunce-heads: lower your prices because we the consumer know that your costs are significantly reduced and your access to the consumer is vastly expanded. And, while you are at it, go back and give those artists what they deserve and stop stealing from them.
You can lead a man with reason but you can't make him think.
It's naive to think it's the only way, or to think it will actually stop it.
It will reduce piracy, at least among groups that are motivated to pirate based on the price barrier, but that's not the only type of group.
From my experience, pirates tend to be broken up into these main categories:
- People who pirate because they can't afford to be legit (at least not on everything), or simply think the prices are too high and refuse to pay the price being asked.
- People who pirate because they are digital hoarders, and they wouldn't care what the price is. They just collect data for bragging rights, to explore all the data that's out there, for trading, or 'just in case' they need or want it one day (or in case someone else might want or need it.) Or maybe it's just to be rebellious.
- People who pirate for trial purposes, to help them in making a buying decisions. Despite skepticism to the contrary, some of these actually buy.
- People who pirate in order to avoid the bad user experiences that are often associated with buying legitimately these days, and who might actually be legit if there were less hassle involved.
Pirated software has an opportunity cost. When the legit cost of your app is cheaper than the time opportunity cost of finding the pirated version, you will make a sale to all but the stupidest of pirates.
"Who is the Journal of Quantum Physics going to believe?" --Stephen Hawking
You'd be surprised how much better pirated versions of games can be due to buggy or invasive DRM. Even as simple as not needing to put in the DVD each time you want to play the game can be enough drive for someone to download a no CD hack if not outright pirate the game.
That thing you mention doesn't happen in countries where piracy is high. I live in Argentina, and I WISH I could get the matrix trilogy for $9. Or even $50 (the trilogy would cost me $100). I know they don't have $5 bins (except really truly bad crap like a macarena remixes CD).
I think there's more to it than that. Take the case of the "Humble Indie Bundles" - you could set your own price, down to a single cent, and much of it (buyer-determined) went to charity. And yet piracy of those games was not only prevalent, but actually increased during these sales.
This tells me that there is a significant mental barrier between "$0.01" and "$0.00". I do not believe it is the financial cost itself, but the difficulties of buying something online compared to pirating. The hassle of Paypal or credit cards or anything else is, IMO, the primary barrier. What is needed is a fast, zero-pain, minimal-set-up system for buying goods online. When buying the software is as easy as pirating it, piracy will drop.
This is probably why Steam has been successful. Once you've set up purchasing with your account, buying a game is simple - most of it consists of clicking "next" a few times. It's not perfect - it tends to assume you want to buy multiple games at once, making buying a single game more difficult than it should be - and of course there's the DRM issue, but it seems to be doing this better than most.
I occasionally do freelance work, making small game models/levels for random people online. Several times, rather than accept payment via Paypal or anything, I've simply told the client "find a game on my Steam wishlist that's about $10, that's enough payment for me". That's how difficult handling actual money online is - trading a service for a product is actually easier.
Yes, pricing is part of the problem. I haven't bought a game at release-day price since the last big Zelda game came out. I don't mind waiting a few months (or even years) for the price to drop from $50 or $60 to $20. I also haven't bought music anywhere in forever - 8 songs that came out in 1986 are not worth $15, even if it is a magnum opus of heavy metal.
So, really, the pricing is only half the issue. First is the divide between "what the product is worth" and "what the product is priced at", second is the divide between "how easy buying it is" and "how easy pirating it is". Solve those two, and piracy will drop significantly. Not to nothing, of course, but it will drop to reasonable levels.
This guy does it: http://www.mrexcel.com/
You can download his books and read them for free. If you like them enough, he will gladly sell you a hard copy. It works so well he's been doing with every new book of his for the last couple of years.
Dead on right. Absolutely. Apple didin't even like DRM... they had to do it.
Is that why they were claiming jailbreaking was highly illegal and it would crash the phone towers?
http://apple.slashdot.org/story/09/07/29/1440233/Apple-Says-iPhone-Jailbreaking-Could-Hurt-Cell-Towers
This space for rent.
Apple didin't even like DRM... they had to do it.
Yeah. If there's one thing Apple hates, it's controlling the user's experience.
Sorry, I meant "managing their rights".
"Our two-party system is like a bowl of shit looking at itself in a mirror." - Lewis Black
But you don't spend $50. You spend that plus another $12 to $19 for each other part of the game afterwards for "DLC" that is actually part of the game to begin with.
I would stop all tormenting of tv shows if hulu plus had everything I wanted. They do not carry 90% of the BBC shows and many lesser networks AND give me a commercial free option.
Do not look at laser with remaining good eye.
Did you miss the point that when they lowered prices, profit and revenue went up?
This is /., where people are almost as ignorant of economics as the Congress and White House.
You are in a maze of twisty little passages, all alike.
Pirated software is free. There is no way to compete with that at any price.
Yet plenty of games, music, and movies have been quite successful despite pirated copies being available before the official release.
Face facts: People are willing to pay for stuff. If we were the big stingy tight asses these industries all thought we were, Starbucks would never have been a massive success and iTunes would simply be a bit of trivia only Slashdotters would be aware of.
"I like to lick butts!" by MobileTatsu-NJG (#32700246) (Score:5, Informative)