kho@hou2a.UUCP (S.KHO) (04/14/84)
The Software Piracy problem is basically a marketing problem. It is caused by the interplay of various factors such as: price of the product, market size of the product, product appeal, market audience profile and alternative available source. Market audience is the set of people who are interested in the product. These people can be rich or poor, high self-esteem or low self-esteem (e.g., like to borrow tools from the neighbor), ethical or unethical, aware or unaware of alternative source of this product at a lower price, ...etc. However, each person posseses a certain level of each characteristics. The aggregate of these characteristics within a market audience makes up the market profile. Without considering the cost, the price of a product can influence and is usually influenced by the market size, market profile and the alternative available source. Take the computer software product. The price is very high (relative to other software such as music, video). The market is therefore small. However, if we lower the price of the software product, the question becomes, will the market size grow enough so that the resulting aggregate revenue is more. It may not because there may not have enough machines to run the software. In other words, how big is the "potential market size." The potential market size of a product is usually measured by marketing research. But in software case, the answer is availalble. The potential size is very big. In fact, Ashton-Tate president David Cole in defending the establishment of a Software Protection Fund claimed that there are two to ten times more unauthorized disks than authorized disks in use. The potential size is bigger than the combined number of authorized and unauthorize disks usages because there are people appealed to the software product but didn't make unauthorized usage. The next question is why within the market audience, there are people who will make unauthorized copy of disks while there are people who will not. This be explained by two facts. First, there are available alternative sources of the product (which is copying, rather than clones). Second, AT CURRENT PRICE LEVEL, the market profile is such that the majority (ref. Cole's claim) of the market audience appealed to the software products are "less" ethical, "less" willing to pay stiff price, "more" aware of the alternative available source, "strongly" attracted to the product, ...etc. and therefore, resort to copy-right violations. At current price level, the "prize", which is the price of the product minus the costs (tangible and intangible, e.g. feeling guilty) of unauthorized copying is high as perceived by the majority of the market audience. The interplay of the price of product, prize of obtaining the product from alternate source and personal profile is just like the $20 bill on the ground example. The $20 bill is a product. Its price is $20. The normal way to "buy" $20 is to earn it (the old fashion way.:-) When it is sitting on the ground, it is your alternate source. Depending on your profile (i.e., income, ethical value, awareness of the $20 bill, ...etc.) you may not pick up and keep the $20. But what if it's a stack of bills worth $200? $2000? $2 million? At what "price level" will the "prize" more than your "value"? With respect to economic activities, people act to maximize their gains. The "gain" is a total gain of both tangibles (e.g. $2 Million ) and intangible (e.g., guilt, violation of own ethical value.) Hence, as the price of software product comes down, lowered relative to the "ethical value", willing to pay "value", ...etc., more people will shift from the copy crowd to the non-copy crowd within the market audience. Furthermore, others in the market audience with high "value" system will enter the market thus increasing the market size. The solution to the software piracy problem is therefore to determine the "right" pricing so that ideally, the non-copy crowd is so much bigger than the copy-crowd so that the effect of the copy-crowd activities is negligible like the phono-record industry. Again, the right pricing is influenced by the "quality" of your product market profile! I think the software industry should spend money to study the market profile and determine the right pricing. But who knows? Perhaps, the software industry already found out that the software product market audience is such a bunch of crooks that the software products have to be priced at around $9.99 in order to move significant number of "copiers" to the non-copy crowd. If that is true, then I think the legal actions against the offenders are justified. Instead of lowering the price of product, the software inducstry is increasing the cost of alternative source, thus decreasing the value of the "prize" to a level that there are less "copiers". Whether this will increase the number of "non-copiers" is questionable. S. Kho hou2a!kho
mats@dual.UUCP (Mats Wichmann) (04/16/84)
> From: kho@hou2a.UUCP (S.KHO) > Newsgroups: net.micro > Subject: Software Piracy - Marketing Persipective > Message-ID: <326@hou2a.UUCP> > Date: Fri, 13-Apr-84 14:31:35 PST > Organization: AT&T Bell Labs, Holmdel NJ > The interplay of the price of product, prize of obtaining the > product from alternate source and personal profile is > just like the $20 bill on the ground example. > The $20 bill is a product. Its price is $20. > The normal way to "buy" $20 is to earn it (the old fashion way.:-) > When it is sitting on the ground, it is your alternate source. > Depending on your profile (i.e., income, ethical value, awareness of > the $20 bill, ...etc.) you may not pick up and keep the $20. > But what if it's a stack of bills worth $200? $2000? $2 million? > At what "price level" will the "prize" more than your "value"? This reminds me of a joke I once saw in a turn-of-the century Swedish magazine passed down through a couple of generations of my family. It was originally designed to be read with a heavy (fake) Jewish/German accent. Translated, it comes out something like: So, my son, if you find a pfenning on the ground, you may keep it. If, however, you find a thousand marks on the ground, you should turn it in to the police, for then you will receive a good name, and a good name is a man's fortune. If you were to find a million, you need not turn it in to the police, for then you would already have a fortune, and thus have no need for a good name. Seriously, despite the possible non-relevance of the pile-of-money, I though this article provided an excellent perspective on the topic, and thanks for posting it. I still feel that there is a parallel between books and software. True, the author of the book is not called upon to do support AFTER the book is published. Just ask the author of a text how much time he spent between the time he `finished' writing the book and the time it finally appeared on the bookshelves. Ture, software is not as static as a book, but if a good product were properly prepared through the aid of a good software publishing house, the amount of post-publication support on the part of the author would also be minimal. I am not saying that this will happen in more than a few cases, but the parallel still exists. Most software products make it out before they are really complete, i.e., there is something there (product OR documentation) that someone had not thought of. The game packages are probably the closest to products that don't need post-sales support. Mats Wichmann Dual Systems Corp. ...{ucbvax,amd70,ihnp4,cbosgd,decwrl,fortune}!dual!mats
bowles@fortune.UUCP (Mark Bowles) (04/16/84)
This has become quite an extensive conversation, ranging from morals and ethics to practicality of protection and theft. Sounds to me like an opportunity to make some money. Since all of the postings went out on a "broadcast" network (and are thus available for the "appropriating"), I think I'll collect 'em into a package and sell the whole thing to a publisher. The title "The Hacker Papers" sounds nice, but it's already been done.
dgary@ecsvax.UUCP (04/18/84)
It seems to me that there is a big difference between copying software and copying records, from a marketing perspective. A copy of a record is not likely to be copied itself, because the quality degrades rapidly. Therefore the number of copies of a record is effectively limited by the number of tapes the record owner is likely to make (or let his or her friends make). It also takes time to tape a record, and this limits the number of copies. In contrast, a copy of a program is every bit as copyable as the original, so it is theoretically possible that only one original need ever enter the marketplace. Also, the advent of record-rental stores and the increase in music taping has led to (according to the record industry) a recent serious drop-off in revenues. This is in addition to the commercial piracy problem. What happens if it becomes easy and cheap to photocopy books, by the way? I've seen quite a few students with photocopies of the D&D manuals, for instance, and I might note that they cost a lot less than dBase II! Ramblingly, D Gary Grady, Duke University Computation Center (ecsvax!dgary)
ignatz@ihuxx.UUCP (Dave Ihnat, Chicago, IL) (04/19/84)
"collect all the articles into a book and sell them..." Not too funny; I seriously thought about collecting all of the recipes from net.cooks for a year, cleaning them up, writing an explanation, and publishing--net addresses and all. I figure the novelty alone would sell enough copies to pay publishing costs and profit...but wait! A lot of those recipes are *copied* from extant cook books, and only some are acknowledged; I'd have to certainly contact the publishers of those (as the original submitters had not). And, truly, is the net public domain, so that I wouldn't have to get permission from everyone I could contact to publish their recipe? How about names--do I credit them, or is publishing their name (and net address) going to get me into trouble?? I've got all the recipes. I decided not to do it. Call me lazy, call me coward... Dave Ihnat ihuxx!ignatz
barryg@sdcrdcf.UUCP (Barry Gold) (04/20/84)
I am the author of two Fantasy Role Playing Games. The first came to
about 130 pages printed; the second about 100 pages.
Each took about six months to write. And another 18 months to rewrite,
based on data from playtesting. (This probably corresponds to debugging.)
I am expected to provide post-publication support in the form of rules
clarifications for everyone who writes my publisher requesting such.
In addition, I edit/publish a small magazine. And all subscribers expect
to be able to get post-publication rules clarifications/additions from me.
They also expect to be able to take my rules, change them to fit their own
gaming circle, and ask my opinion of the changes.
I love all this.
But whether or not I provided these services, I would expect that people
should not xerox my rules rather than paying for them. I don't make that
much money a copy and neither does the publisher. I get 10% of gross
purchase price of a game (and so does the publisher). One game retails
for $18; the other for $12. Stores buy at 50% retail price so I get 90 cents
for one game; 60 cents for the other. Both of us wait for our money.
The publisher sends the games out and gets paid COD (often after they'e
sold). I get paid 3-6 months after that.
So much for the facts. Now on to the theory.
Copying material is NOT akin to taking loose money found in the street.
Such money is effectively abandoned unless there exists some method of
tracing the owner, because money does nmot have ID tags. No one can prove
that's his five dollar bill (though they may well claim a wallet and its
contents).
Copying material is not akin to taking anything found in the street.
Written stuff is not lost/abandoned. Its ownership is usually clearly
visible.
Copying material is akin to shoplifting. You are stealing something that
belongs to someone else. You are stealing it when you could legitimately
pay for it. You are also (like a shoplifter) forcing others to pay a
higher price if the producer/retailer wish to make a fair profit but
don't get your money.
Lee Gold
Editor, Alarums and Excursions
Author, Land of the Rising Sun
Lands of Adventure
--
Barry Gold
usenet: {decvax!allegra|ihnp4}!sdcrdcf!ucla-s!lcc!barry
Arpanet: barry@BNLdan@idis.UUCP (Dan Strick) (04/20/84)
This from an old AP news article: GRABBER OF $1 MILLION IS ACQUITTED OF THEFT PHILADELPHIA (AP) - Joseph Coyle, the "Robin Hood of South Philadelphia" who scooped up $1.2 million that had fallen from an armored truck last year, was acquitted on all three charges stemming from the incident. Coyle, an unemployed longshoreman who gave $100 bills to friends and strangers after finding the money, was found not guilty by reason of insanity on two of the charges. ... Defense lawyer Harold Kane had argued that Coyle's mind become boggled when he found the cash inside the two canvas bags that had fallen from a Purolator truck into the middle of a south Philadelphia street ... Coyle had been arrested at a New York airport about a week after finding the money, as he prepared to board a flight to Acapulco, Mexico, with $105,000 strapped to his ankles. ...
simpers@ucbvax.UUCP (Scott Simpers) (04/22/84)
Mats at Dual makes an excellent point. Software, when done properly, does not need significant after sale support. Granted, many programmers later upgrade their software, but then many authors write sequels. The book analogy is valid. Scott ...!ucbvax!simpers