Little Economic Lesson

by Callia

Back to The Real World.

Callia2007-01-01 21:49:05
Ok, I have heard mention here, and been encouraged by members of this community to do this, so let me explain why I don't... and why I do not think people who do this are cool, and do not respect them for their '733t' piracy skills.

First off, go look at the price of software these days. For example, the average computer game cost about 50-60 dollars, vs the 30-40 dollars of less then five years ago.

Now inflation has attributed to this cost, as did increase in the costs of technology, and marketing, however a good percentage of it is now dedicated to expected loss from piracy, and to pay for the development of anti-piracy software.

Each time someone breaks one of these anti-piracy prgrams, the cost of a game will go up a couple of hundred dollars, and when that loss exceeds the reserved expected loss fund, then the price of software goes up again.

Things like Windows OS suffer more, because of the rampant piracy there. That is also why 98 costed 75 dollars, and Vista is going to hit the shelves at 500. Basically, the people who are doing the right thing and buying the software like they should, are paying for four other people who have stolen it.

And Microsoft does care, but because they suffer such rampant theft, they do not persucute everyone. Much like DVD and Music Piracy, they spend their time nailing the distrubution of the pirated stuff, and largely leave the indivduals alone. Eventually they will go after the individuals.

So in short, stop footing your bills with the honest people of this world. If the people guilty of piracy in the first place had paid, we would not have the high costs we have now.

Aiakon2007-01-01 22:09:47
Thank you, Vicar.

However, my conscience is clean.
Unknown2007-01-01 22:31:23
If they cut the prices instead of playing with anti-piracy protection (which gets broken almost immediately anyway and is just uneffective), more people would buy the software instead of getting cracked version for free.

As far as I know, even Vista Ultimate will not cost $500. Home version will be available for $199, at least that's what I read on the Internet. Quite comparable with Windows XP when it hit the shelves.

Anyway... simply put, I don't buy that reasoning.
Unknown2007-01-01 22:35:54
But see, here's the thing.. you can't interact with the majority of the PC world without Windows. And Microsoft knows this. Its like having to buy a key just to unlock the ability to buy other programs. That annoys people, because it is a pretty money-grubbing tactic. Excellent OSs are open source and free.. but the problem is, those OSs aren't catered to like Windows.

You don't respect people who pirate software? I don't respect people who support squeezing every last penny out of people when there's no reason for it. For all the cost, Windows blows. Vista is going to suck, and you're going to have to pay $500 to access the future programs that are going to require Vista. Yeah, no thanks.
Callia2007-01-01 22:43:25
I never said I liked those companies either, but I do have a sense of morality that even 'justified' stealing is wrong. It is also a VERY selfish approach. Because you feel it is a rip off, you steal, and that price gets kicked to those who refuse to steal it.

I could care less if you respect me for being bitter that I am footing the bill of others selfishness, I am trying to tell people that by helping themselves, they hurt many many others.

Yes it sucks Microsoft controls the market, but linux community hurts itself, and the Mac communtiy is so black and white that it scares away publishers.

Do you steal text books, they are over priced, why not steal them?
Unknown2007-01-01 22:55:18
QUOTE(Callia Parayshia @ Jan 1 2007, 11:43 PM) 368424

Do you steal text books, they are over priced, why not steal them?

It's not the same thing - book can't be copied for free, it's a physical object. Although, there's just lots and lots of scanned books in pdfs available.

It also might be worth to note that theft of intellectual property is not the same as theft in the usual meaning, although for the sake of discussion it can be simplified to that.
Verithrax2007-01-01 23:33:43
QUOTE(Callia Parayshia @ Jan 1 2007, 07:49 PM) 368393

Ok, I have heard mention here, and been encouraged by members of this community to do this, so let me explain why I don't... and why I do not think people who do this are cool, and do not respect them for their '733t' piracy skills.

Savvy, Callia. Savvy.
QUOTE

First off, go look at the price of software these days. For example, the average computer game cost about 50-60 dollars, vs the 30-40 dollars of less then five years ago.

In my experience here outside the US, costs of software doubled while the dollar devalued nearly 30%.
QUOTE

Now inflation has attributed to this cost, as did increase in the costs of technology, and marketing, however a good percentage of it is now dedicated to expected loss from piracy, and to pay for the development of anti-piracy software.

Yeah, right. You might want to cut back on the Kool-Aid, it's not good for your precious bodily fluids. Anti-piracy 'software' is 99% of the time a restriction that has existed for ten years or so, and doesn't work, and is implemented on the installer, which is outside the domain of the software developer himself. Those companies that do add copy protection to their software usually do so by suspiciously scummy means, like having your software phone home periodically.
QUOTE

Each time someone breaks one of these anti-piracy prgrams, the cost of a game will go up a couple of hundred dollars, and when that loss exceeds the reserved expected loss fund, then the price of software goes up again.

Yeeeah. A couple hundred dollars overhead when your software development costs are paid for and you're essentially printing money in CD form is negligible. If you think that a couple hundred dollars plus in Microsoft's budget translates directly into any mensurable change on the price of software, think again. I'm lazy to look up the figures right now, but I know that Microsoft didn't have enough of their (Copy) protection schemes broken to justify an increase in price. What increased the price of software is just INCREASING DEVELOPMENT COSTS. Games are now done on budgets comparable to Hollywood movies, and Microsoft's last OS was nearly eight years in the making and still not ready (They're going to be patching that sinking boat up for another year or two). Chalking it up to piracy, when it's due to increasing budgets and increasing complexity which everyone can see, is hopelessly naïve.
QUOTE

Things like Windows OS suffer more, because of the rampant piracy there. That is also why 98 costed 75 dollars, and Vista is going to hit the shelves at 500. Basically, the people who are doing the right thing and buying the software like they should, are paying for four other people who have stolen it.

Microsoft does not care. Most people who pirate Windows are in Asian and South American countries where a copy of Windows costs the kind of money that can feed a family for months, and where a single copy of Windows XP Pro costs nearly as much as the computer itself. Due to Microsoft's pricing policy, those people are not their target audience. In fact, if they were unable to illegally obtain copies of Windows, they would just use Linux (I'm not saying Linux is better - it is, but I don't want to argue about this here - I'm saying it's the only other alternative) and Microsoft is interested in keeping their monopoly, which is sustained by having as many owners of Windows boxen as possible.

Not to mention that paying $500, or even $200 for a bare operating system and a crappy GUI shell is ludicrous. This is the kind of software we should expect to get for free.
QUOTE

And Microsoft does care, but because they suffer such rampant theft, they do not persucute everyone. Much like DVD and Music Piracy, they spend their time nailing the distrubution of the pirated stuff, and largely leave the indivduals alone. Eventually they will go after the individuals.

Yeah, the RIAA hasn't sued any grannies yet and Sony hasn't tried to install spyware in our boxes... rolleyes.gif


The mafiaa has come for the individual a long time ago; you're just alienated from reality. Microsoft won't sue people for software piracy because they don't care enough. Their monopoly relies on Windows being easy to obtain; nowadays, if you have a pirated copy of Windows, you can license it easily. That coupled with minor annoyances (Like Windows Genuine Advantage) is all it takes. Microsoft can lose money for years while still having money to develope another generation of operating systems, which enterprise buyers will buy when they break the compatibility on everything and the PHBs decide Office 2037 is superior to the previous one because it fills up a whole screen with buttons and menus, so you have to have a dual-head display.
QUOTE

So in short, stop footing your bills with the honest people of this world. If the people guilty of piracy in the first place had paid, we would not have the high costs we have now.

Wrong, wrong, and wronger. Most people 'guilty' of piracy couldn't afford the software in the first place; a good portion of those who could, got their computers pre-installed with Windows from a dodgy OEM that didn't license the software; those who willingly pirated Windows when they could afford a legitimate copy are almost statistical noise, and Microsoft doesn't particularly care about cracking down on that - More people running Windows contributes to their monopoly.

And quit saying violating intellectual property is theft. It's not. Your black and white sense of morality may say it's universally wrong, but when you steal intellectual property, you're just stealing putative gains which may not even exist, and the notion that it's driving software prices up can only come from someone who is thoroughly ignorant of how the software industry operates.

For the record, I own licenses to all the data in this computer's hard drive.
Callia2007-01-02 00:17:26
Just so you know I am not talking out of my ass Verithrax, here is my employment and education history,

United States Navy Academy: Annapolis, Major in Civil Engineering, Minor in Electrical Engineering.

Eight years active USN, followed by 6 years reserve duty. (Currently reserve, going active again in April.)

Following eight years, I did two years as an Electroical Engineer for San Deigo Gas and Electric. Then I went on to work for Gateway for two years. Then I went back to SDG&E where I am currently employed.

Now while most of that has no relevance to my argument, I will point out my time in Gateway. Most of my job functions revolved around the power supplys installed in the Gateway systems, however my last two months had me in a factory management position, where I was privvy to marking reports and analysis, and projections of costs from Microsoft, McAfee, etc... where they explained their changes in costs, and why. Now, you can say they are lieing about these expenses, but that is called misrepresentation, and if anyone here remembers Enron, we know what happens when you do that. We also followed up reports, to confirm it.

Sierra, Cendent, Adobe, and many many more, have also frequently reported expense losses due to piracy, and attempted new variations of anti-piracy protection, and such. To further nail the cuffin of piracy rising the cost of computer software, I will point you to scholars who have written about these very issues:


http://links.jstor.org/sici?sici=0025-1909...&size=LARGE
http://econ.mckenna.edu/papers/2000-14.pdf
http://www.emeraldinsight.com/Insight/view...ontentId=857579
http://run.iist.unu.edu/bitstream/reposito.../dp2002-115.pdf
Unknown2007-01-02 00:27:49
I don't have the time to read it (the long one), but if the loss they take is evaluated in a similar way that RIAA does it... it's 24 karat BS.
Verithrax aready summed it all up very well. Only a small percentage of people who get pirated copies would buy it if they couldn't get it for free.
Verithrax2007-01-02 00:29:36
QUOTE(Callia Parayshia @ Jan 1 2007, 10:17 PM) 368452

Just so you know I am not talking out of my ass Verithrax, here is my employment and education history,

United States Navy Academy: Annapolis, Major in Civil Engineering, Minor in Electrical Engineering.

Eight years active USN, followed by 6 years reserve duty. (Currently reserve, going active again in April.)

Following eight years, I did two years as an Electroical Engineer for San Deigo Gas and Electric. Then I went on to work for Gateway for two years. Then I went back to SDG&E where I am currently employed.

Now while most of that has no relevance to my argument, I will point out my time in Gateway. Most of my job functions revolved around the power supplys installed in the Gateway systems, however my last two months had me in a factory management position, where I was privvy to marking reports and analysis, and projections of costs from Microsoft, McAfee, etc... where they explained their changes in costs, and why. Now, you can say they are lieing about these expenses, but that is called misrepresentation, and if anyone here remembers Enron, we know what happens when you do that. We also followed up reports, to confirm it.

laughing1.gif
QUOTE

Sierra, Cendent, Adobe, and many many more, have also frequently reported expense losses due to piracy, and attempted new variations of anti-piracy protection, and such. To further nail the cuffin of piracy rising the cost of computer software, I will point you to scholars who have written about these very issues:
http://links.jstor.org/sici?sici=0025-1909...&size=LARGE
http://econ.mckenna.edu/papers/2000-14.pdf
http://www.emeraldinsight.com/Insight/view...ontentId=857579
http://run.iist.unu.edu/bitstream/reposito.../dp2002-115.pdf

Adobe's pricing policies are just as ludicrous. They're the victim of making their software industry standard and making their sotware innacessible to a lot of people; I don't know about their copy protection schemes. I just can't bring myself to have any sort of sympathy for those people. I haven't heard of Sierra, and would ask you to confirm that - The last Sierra game released as of my knowledge is Evil Genius, which I own legally, and which came with no nonstandard copy protection. Cendent draws a blank on Wikipedia and is apparently a car rental and hotel chain. Also, you mispelled 'coffin'.

ETA:

Microsoft's loss estimate methods:

Microsoft Senior Manager: Bob, how many PCs exist in southeast Asia?
Microsoft Middle Manager: Oh, I think about 750 million, Jim.
MSM: Okay, how many Windows licenses did we sell?
MMM: Uh, around 250 million.
MSM: So that's 500 million licenses we didn't sell! That's over a billion dollars worth of piracy!
Unknown2007-01-02 00:32:40
All the reasoning aside...stealing is still stealing.
Verithrax2007-01-02 00:39:13
QUOTE(Jessa @ Jan 1 2007, 10:32 PM) 368455

All the reasoning aside...stealing is still stealing.

IP violation isn't stealing. When you steal IP, you don't deprive anyone of that IP, only of profits that may or may not have come from that IP. When you steal software you couldn't have bought in the first place, you don't deprive anyone of using that software. It's most definitely not the same as walking into a store and stuffing a copy of Windows XP into your pocket.
Unknown2007-01-02 00:47:51
It's still theft though. They created it for profit. Now, I don't claim to be the most knowledgable person in the world when it comes to this sort of thing. But, if an item is intended to be sold and someone gets it without paying...it's still a form of theft.
Verithrax2007-01-02 00:56:10
QUOTE(Jessa @ Jan 1 2007, 10:47 PM) 368457

It's still theft though. They created it for profit. Now, I don't claim to be the most knowledgable person in the world when it comes to this sort of thing. But, if an item is intended to be sold and someone gets it without paying...it's still a form of theft.

No, it's not the same thing. If I walk into a computer store and steal a box with Windows XP on it, then the store owner lost some very real property of his (The box, Windows license and licensing information, the CD) and won't be able to sell it, which means he was actually deprived of something.

On the other hand, by violating IP you're depriving someone of putative gains, which is not the same thing. If you create a product, and I do something that keeps you profiting from it, I haven't 'stolen' anything from you. It's not theft if all you lost were future gains you may or may not have gotten. Putative money is not legal tender.

I'm not saying software piracy isn't wrong under certain circumstances, but I am saying that black and white views of how piracy is 'wrong' even for people who can't in the first place get the data legally, or who won't, is overly simplistic and naive. And that software companies use piracy as a lame excuse to rack up prices, which only incredibly naive civil-engineers-turned-pointy-haired-bosses buy into.
Callia2007-01-02 01:03:54
Verithrax, tell your ass to shut up a moment, read a couple of the articles. One goes into your very 'let the steal it, it helps us' idea of microsoft, and goes into in depth detail on why that fails.

Someone steals a copy of Windows (lets remember, not everyone who steals is in the position where they can not afford to get something legally, you thinking everyone who can afford things legally buys them is awfully childish.) from something like Bit Torrent. They then go on and install it. Microsoft does not sell one copy of windows.

Microsoft lost money out of that.

Also, companies do not exist to lose money, so the agrument that Microsoft can afford to eat the losses may be true, but the falsehood is that they do not eat the losses. Eatting losses earns no one profit, and makes people who, you know, want a paycheck, fairly upset, (including the people running the company.)
Acrune2007-01-02 01:14:16
Good post. While the ones that disagree do make a few good points, they should look at the other two who posted the same and ask themselves if they really want to be one who agrees with them. tongue.gif

What gives people the right to get for free what others pay for? Just because you can't afford it, or won't pay the price doesn't mean that you should have that item anyways.

I don't believe for a second that piracy doesn't affect price. Thats obviously not the only factor, but no one said that it is. Most people can afford windows, but many of them know they can get it for free and don't pay for it. Prices wouldn't lower if piracy decreased, but the prices wouldn't raise as fast either.

QUOTE(Verithrax @ Jan 1 2007, 07:56 PM) 368462

I'm not saying software piracy isn't wrong under certain circumstances


Its wrong under all circumstances.
Verithrax2007-01-02 01:14:57
QUOTE(Callia Parayshia @ Jan 1 2007, 11:03 PM) 368463

Verithrax, tell your ass to shut up a moment, read a couple of the articles. One goes into your very 'let the steal it, it helps us' idea of microsoft, and goes into in depth detail on why that fails.

Microsoft is more insterested in keeping their monopoly and lockdown than in selling a copy of Windows to every single person who owns a computer. That's their strategy, and that's what they've been doing.
QUOTE

Someone steals a copy of Windows (lets remember, not everyone who steals is in the position where they can not afford to get something legally, you thinking everyone who can afford things legally buys them is awfully childish.) from something like Bit Torrent. They then go on and install it. Microsoft does not sell one copy of windows.

Microsoft lost money out of that.

Aw, poor little multi-billion dollar corporation. I'm heartbroken. Poor thing, probably going to tank because of those mean, mean software pirates.

Wake up. Yes, there are people who could buy a copy of Windows and still pirate it. But frankly, if you sell a product at far, far more than it's worth while leveraging your monopoly and mindshare to make it the only really viable alternative for a lot of people, you should expect to be pirated. And like I said - It's not all black and white. "Buying software good, pirating software bad" doesn't work in real life. Some people could very well afford a copy of Windows and are just being cheap. But the majority of people buying pirated Windows copies couldn't afford one in the first place, thanks to Microsoft's market-insensitive pricing. Face it: Losing money on piracy in certain countries is Microsoft's strategy. The other side of that strategy is spreading FUD about how much they lose because of software piracy.
QUOTE

Also, companies do not exist to lose money, so the agrument that Microsoft can afford to eat the losses may be true, but the falsehood is that they do not eat the losses. Eatting losses earns no one profit, and makes people who, you know, want a paycheck, fairly upset, (including the people running the company.)

Except, Microsoft isn't losing money, last I checked. The notion that real human beings are being hurt by piracy, instead of a multi-billion corporation's balance, is ludicrous. And again, repeat after me: Putative money is not legal tender.
Daganev2007-01-02 01:19:34
Yes, nobody cares about people who need to make a living off of software development, they are all evil capitalists.

But someone try to take credit for a work of art they didn't do, and you all rain hell on them....

Theft is theft. You can use any argument you like, but its theft. How do I know this? Because its in the law books, and no ethisist says its ok. Only computer geeks who wish computers and the internet wasn't mainstream think its ok.

Computers are no different than any other intelectual property right. In 50 years, you can have all the free microsoft products you like.

I know for a fact that many people who pirate software would buy it if they could not pirate it. I know of 7 people in my circle of friends alone.
Roark2007-01-02 01:20:21
The best argument I have read in why you should respect copyright law is "Patents and Copyrights" by Ayn Rand. It is chapter 11 in "Capitalism: the Unknown Ideal", but it was originally a stand-alone essay and so sometimes you can find a copy on its own. The best arguments I have heard against it were on talk radio (though that was moreso for patents than copyrights), so I can't really point you to something to read there. Today I'm on the fence, but I used to be on the side of anti-copyright before reading that essay.

Basically Rand argues that trade is based, not on physical objects, but on value, and the value of the software is not the physical media but rather is the mental processes that went into creating the information. So it would follow that laws meant to protect trade should follow the thing that has value, not the thing that has physical substance. Thus it is like theft of a computer programmer's mind to pirate software (or an author's mind to pirate books) from this perspective. As for the anti-copyright crowd, usually I hear arguments that creating barriers to the flow of information and ideas creates barriers to the creation of new information and ideas that would be built on top of the restricted media, and thus it causes growth of the industry to stagnate. (Though some counter this utilitarian approach by claiming that the higher degree of difficulty in profiting would reduce the initial output of information and ideas to begin with, countering any benefit.)
Mirk2007-01-02 01:29:47
QUOTE(Kashim @ Jan 1 2007, 04:55 PM) 368431

It's not the same thing - book can't be copied for free, it's a physical object. Although, there's just lots and lots of scanned books in pdfs available.

It also might be worth to note that theft of intellectual property is not the same as theft in the usual meaning, although for the sake of discussion it can be simplified to that.


QUOTE

NOTE: If you purchased this book without a cover you should be aware this book is stolen property. It was reported as "unsold and destroyed" to the publisher, and neither the publisher or author has recieved any payment for this "stripped book"

The above can be found in many books, and while the situation is not exactly the same in the media it is performed in, the concept behind should still apply.