Companies Coming Around To Piracy's Upside?

traycerb writes "The Economist has an article detailing how numerous companies are finding piracy's silver lining: 'Statistics about the traffic on file-sharing networks can be useful. They can reveal, for example, the countries where a new singer is most popular, even before his album has been released there. Having initially been reluctant to be seen exploiting this information, record companies are now making use of it. This month BigChampagne, the main music-data analyser, is extending its monitoring service to pirated video, too.' The kicker is Microsoft's tacit endorsement of Windows piracy in developing markets, namely China. The big man himself, Bill Gates, says it best in an interview with Fortune last year: 'It's easier for our software to compete with Linux when there's piracy than when there's not.'"

I'd be happy...

...if such a mindset would only dispell the myth that a every pirated copy equates to one lost sale.

Re:I'd be happy if pirates* would acknowledge...

If someone avoids downloading software if he won't pay for it anyway, then the productivity he could gain from that software is lost.

If he does download it without paying for it, he gains productivity, while the author of the software loses nothing.

Why is it that you prefer that he loses the productivity, all other considerations being equal?

Re:I'd be happy if pirates* would acknowledge...

Because software isn't food or clothing. You're not entitled to it. If you can't afford it, use a free alternative, or nothing at all. You'll still be alive tomorrow even if you don't get to use the latest and greatest software.

So let me reverse the question with the above: Why is it that you feel people are entitled to luxury?

Re:I'd be happy if pirates* would acknowledge...

Why is it that you feel people are entitled to luxury?

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Re:I'd be happy if pirates* would acknowledge...

You're right that software isn't food or clothing. It isn't tangible. Thus, whoever created the software must have known that their efforts were going toward creation of a product that can not be bought or sold in the same manner that bread and milk are. With tangible goods, either one has or one does not have the item. With intangible products like software, music, or movies, the question of whether or not one has the item is ambiguous. I think the real problem here is that the global economy is based on the construct that all products bought and sold are tangible. The industrial revolution brought us the ability to make the same thing many times, with a lower unit cost due to volume discount. The concept of mass production is meaningless when the cost of replicating a product is zero. The internet eliminates the distribution cost and allows every consumer to become a reseller in a zero-cost market.

As a software engineer myself, I have come to realize one simple fact about the 21st century global market. I do not and can not sell the product of my efforts. I sell my effort itself. I provide a service for a fee. Eventually, most of the software people need will have already been created, and with any luck the software will be organized and self-governed by open source communities. The people in these communities will not be paid by the users of the software through some sort of licensing system. They will be paid by the companies who produce tangible goods that can be sold in the marketplace, companies who derive benefit from integrating the software into their business model. The software itself will be free. The value provided to these companies by the software engineers will be the integration and application of the software to improve revenue generation of some tangible product.

Re:I'd be happy if pirates* would acknowledge...

The consumer looks at a product and says "hey, i like that, but i can't afford to spend $20 on it. so i will not buy it." but now all of a sudden there is a way for that person to get it for free so they obtain it that way.

Why, then, should anyone pay for the software? There are an almost unlimited number of things to spend money on. I am guessing that most "pirated" copies are not a matter of either I eat or I pay for the software -- it's a matter of either I go-to-the-movies or buy-a-new-TV or I pay for the software. At what point does "I can't afford it" justify the piracy in your mind?

The software clearly has some value to the "pirate". It has filled some useful purpose, and the creator's efforts are going unrewarded (that is, the creator didn't intend to give it away -- he or she wanted to be paid for it). Is the creator who wants to be paid for his or her software simply inherently wrong?

Re:I'd be happy if pirates* would acknowledge...

Okay, but I think that compatiblist responses like this only serve to procrastinate the answer to this question.

Right now, the sanctity of bits is protected by lots of social mores and traditions. Copyright law is one of them. Another is the practice of including album art and liner notes in albums. The way we trade information in the commercial world still seems to ascribe value to owning the authentic recorded media, rather than just having access to the bits contained therein. This is the way we have learned to think, growing up buying albums and games and so on.

The 4-year-olds growing up with YouTube are not going to think about data the same way. They are going to feel a deep, bellyfeel inconsistency between the notions that data has value, and that copies of data have value. Cars and books and guns all have a physical component which, consistent with the laws of matter, must carry an element of scarcity. but they're going to balk at the notion that scarcity in the world of bits should be created where it doesn't occur naturally.

The bits-for-money industries will never die completely, as people want to watch/listen to/play stuff and will pay for it. But I assert that the produce-once-sell-indefinitely model is doomed, just because it's inconsistent with what information is.

Re:I'd be happy if pirates* would acknowledge...

"The 4-year-olds growing up with YouTube are not going to think about data the same way. They are going to feel a deep, bellyfeel inconsistency between the notions that data has value, and that copies of data have value."

And you actually think that when the 4-year-olds are old enough that youtube will still be around in its current form? Youtube sill has yet to turn a profit and the only reason it's still around is because google can take the loss. This won't last forever.

Why is is such a stretch that something that has value costs money? Even if it is a copy, each individual person will get value from it.

"Cars and books and guns all have a physical component which, consistent with the laws of matter, must carry an element of scarcity. but they're going to balk at the notion that scarcity in the world of bits should be created where it doesn't occur naturally."

The bits aren't the scarcity with software, movies, or anything digital. The scarcity is the talent that it takes to put the bits in that order (the developers, artists, and producers create this order), which can't be replicated easily.

"The bits-for-money industries will never die completely, as people want to watch/listen to/play stuff and will pay for it. But I assert that the produce-once-sell-indefinitely model is doomed, just because it's inconsistent with what information is."

The bits-for-money industries are the sole reason why they are available for you to download and enjoy. Without any kind of commercial industry, all of the content will be gone.

Re:I'd be happy if pirates* would acknowledge...

...youtube will still be around in its current form?

I said nothing of the sort. All I claim is that today's kids are going to understand data differently from us. I'm sure the businesses catering to them will change names and owners and business models many times along the way.

Without any kind of commercial industry, all of the content will be gone.

Poppycock. Music and art existed before they could be monetized for mass-production, and they will continue to exist after they can't be monetized in this way anymore.

You're right that the big-money industry might collapse. Maybe it will be impossible to recoup an $80M film budget in the future, and so $80M films won't get made anymore. Maybe A-list celebrities will cease to exist.

I can't wait.

Re:I'd be happy if pirates* would acknowledge...

I learned 3D animation on a pirated copy of 3d Studio Max. On my own, I could never justify the purchase of this piece of software, as at the time it was just a hobby.

Down the road, when I got a job at a university doing environment design, my boss had a quite understandable interest in not having pirated software installed on school computers. A copy was subsequently bought for me, and discreet inc. has warez to thank for that sale.

Re:I'd be happy if pirates* would acknowledge...

Ok, so person A writes the software, person B benefits from using it. Your argument is that if B "won't pay" for the software, A should give it for free, right? So in your opinion payments for products and services should be voluntary? You don't think this is unfair to A, or more to the point, it doesn;t discourage A from writing software in the first place?

Re:I'd be happy if pirates* would acknowledge...

In my opinion if Person B is using the software commercially to make a profit then they damn well should pay for it.

If person B is using it at home just to mess around with it for personal non commercial projects then there is no harm done, Person B was never going to buy the software in the first place, they arent profiting from it and no harm is done to anyone.

Id say that software should have specific Home Editions which should be alot cheaper, but then Small to Medium business could potentially exploit this system.

Piracy seems to be becoming the new Home Use Only Licence, but only because one isnt provided or is still far too expensive.

Re:I'd be happy if pirates* would acknowledge...

I totally agree. The problem starts with non-corporate software. Devil May Cry 4 just came out for PC a few weeks ago. I don't foresee many corporations buying it... so what exactly do you do? The answer to this so far has either been: A) put some fucking annoying and useless DRM on it, or B) make games that require a corporate server that isn't being distributed to run (WoW).

So now what do you do? Not very many people will lend their time to make something like that...coding a PC game sucks. The drivers are buggy as hell, there's tons of them, you have to support the lowest common denominator, then there's customer support, etc... so while free software isn't completly out, it will be rare in that field. So exactly what is the solution? These things cost millions to develop, and as technology to push games further comes along, it will take more and more artists to make the graphics and sounds in the game, the voice actors, etc.

I also know a LOT of people who pirate photoshop and do a heck of a lot more than just "messing around", and will openly say that its a critical piece of software for them (its a hobby for them...but hey, sports are hobbys too, and the gears are expensive -too-). So what do you do about those?

The home edition is a good idea and it does work (I've witnessed a lot of people buying Office Home and Student... 150$ for 3 licenses, thats not bad at all), but when people start feeling entitled to the top edition, or we're talking about single player games... I don't see an easy solution.

Re:I'd be happy if pirates* would acknowledge...

To put it plainly: go take a flying fuck at a rolling doughnut*.

I, personally, pay for all the software I use, music I listen to, and movies I watch; despite the fact that I have the technical chops to crack whatever I'd want.

Also, in the interest of full disclosure, I make my money in software; and, by extension, "IP". Ergo, I want to be paid for my work and I think others should be too.

However.

And, that's a big "HOWEVER", I do not accept the rhetoric, propaganda, and evil litigiousness of the software lobby. The idea that everyone who illegally uses a copy of some software product is either: a danger to society, an irretrievable thief, a tax cheat, or a supporter of terrorism is obscene.

The most disgusting part of this, to get back to the point of my original point, is that all the aspersions cast upon those who engage in such piracy notwithstanding, they still wouldn't have paid for "it" anyway.

So, in the end, draconian laws and mindsets are being fostered for no morally, or fiscally, sound reason.

*Thanks to Kurt Vonnegut for that vignette.

This part is old old news.

The kicker is Microsoft's tacit endorsement of Windows piracy in developing markets, namely China. The big man himself, Bill Gates, says it best in an interview with Fortune last year: 'It's easier for our software to compete with Linux when there's piracy than when there's not.'

I keep telling people that when they pirate Windows or Office they're not taking a poke at Microsoft, they're taking a poke at potential competitors for Microsoft. This isn't news, this is not something Bill Gates just realized, Microsoft USED this when Office was getting established, in all kinds of ways, even allowing business users to use the same licensed software at home, rather than using something else because they couldn't get a second license through their office.

Mod parent up.

Not just MS Office.

Back when it was WinNT vs NetWare, Microsoft was happy to allow "piracy" because Novell servers automatically checked licensing and would shut down if you tried to use the same license twice.

Re:This part is old old news.

Correct. They didn't start offering low cost MS Office editions (Home and Student, 3 licenses for 150$ as long as you're not using it commercially) until people started looking at alternatives (Linux, Mac OSX, etc), -not- when people started pirating (since years and years before that).

Linux users: don't support proprietary software!

This is the reason that Slashdotters who support Linux shouldn't be fixing every Windows PC around and giving others pirated software. So many people think they're sticking it to the man by using pirated proprietary software, but it only increases the user base of it.

Microsoft is happy to let the Chinese pirate everything, because it locks them in and increases their user base. Without it, alternatives like Red Flag Linux might actually have a few users.

Software Is NOT A Religion...

...and I'll help people with whatever they have and want to run. Linux, Windows, whatever, so long as they are willing to pay the service rate.

The one thing I will NOT do is install or provide any assistance or other service with pirated software or any illegal activities. Non-negotiable, it ain't happening.

Re:Linux users: don't support proprietary software

This is the reason that Slashdotters who support Linux shouldn't be fixing every Windows PC around and giving others pirated software. So many people think they're sticking it to the man by using pirated proprietary software, but it only increases the user base of it. Microsoft is happy to let the Chinese pirate everything, because it locks them in and increases their user base. Without it, alternatives like Red Flag Linux might actually have a few users.

The majority of people donâ(TM)t care whether a program is proprietary or open source because the majority of people will never modify their operating system. A free launch is a free launch regardless of packaging and I have no doubt that most of the people who have Linux computers use it because it is free, just as most of the people who use Windows use it because it came with their system. The only difference between the two people is that one person knew how to install an operating system and/or build a computer and the other guy didnâ(TM)t.

Old news for most

That article reads like a young adult suddenly realizing how the world really works, but still stuck in the idea that everything they learned before must still be true.

Re:Old news for most

That article reads like a young adult suddenly realizing how the world really works, but still stuck in the idea that everything they learned before must still be true.

[disclaimer: i'm the submitter]

definitely true, and to be expected from The Economist; like the WSJ and FT, it's just always going to have a rah-rah business attitude.

still, i think this is good insight into the big businesses' mindsets, and these are encouraging first signs of cracks in the old thinking, and maybe even a sneak preview of how things may change.

The PC Software Industry has known this for years

For example MS, note that it was only with XP that they even tried to introduce some anti-piracy, and it is decidedly half-assed and low priority.

Good software companies have managed to have it both ways since the 80's and benefit from piracy and cracks spreading their best efforts, while making lots of noises about how bad it is so that those with money will be inclined to purchase it rather than take the risk. To my knowledge they only prosecute big black market dealers who are probably interfering with their attempts to set up profitable distribution channels.

I am sure they have numerical models in Redmond telling them exactly how much piracy vs. prosecution will maximize their profit in the various markets.

Only idiots like the RIAA are stupid enough to actually sue and thus alienate their basis directly and for all time.

MS only really cares about large scale piracy

When it comes to individuals pirating their software (their OS, Office, Visual Studio), Microsoft actually would prefer those people pirate their software instead of using alternatives. This is also the same reason they offer Windows, Office and Visual Studio at student discounts for well, students.

Microsoft would rather have young programmers pirate their Visual Studio and get used to developing in that environment rather than let's say Ubuntu + gvim + gcc. Also there is a chance that the average Joe who's on a pirated WxP copy will go out to BestBuy and buy Vista before calling in the slashdot cousin to upgrade his OS - which the average Joe wouldn't do if he was running Fedora. (This paragraph is directly from a Manager at Microsoft's Active Directory Services team - everything except for the /. cousin).

As someone else here has noted, MS only cares about piracy when businesses do it or large scale piracy happens (someone's making money from it). I get my genuine copies of Microsoft Software from their employee store (buddies of mine work at MS) at really cheap prices (35$ for XP Pro, Windows games at 10-20$, Xbox 360 games at 15-25$) but I know it costs next to nothing for MS to print out those copies - even 25$ == profit.

NIN did this recently...

Nine Inch Nails gave out their new album (The Slip) for free and used the geographic data from the torrent downloads to plan their tour schedule.