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Where I come from software is considered something you can get for free (same goes for movies, etc.) The willingness not to pay for software is quite strong. It is putting me off, that people would rather go through hoops and risk legal issues than to pay a small amount of money for a piece of software. This attitude is somehow embedded in the society. I'm just trying to understand the situation.

What do you think is causing this? Why won't some people pay for software even if it's cheap and they use it every day?

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55 mln active users on Steam. Doesn't seem as making people pay is as hard as you put it. –  vartec Oct 3 '12 at 15:18

23 Answers 23

For me some of it comes down to licensing. I use both Windows and MAC systems, have bought software directly from vendors but always first check the license. Something like Xplorer2 has a great license and and a great product. DxO - less liberal but high quality product for the task so there is a balance there - like selling anything.

Since the MAC App store came to be I have actually purchased more software for MAC simply because they make it easy. I can install it on another MAC I won, if I reinstall the OS it is not a huge hassle to reactivate and the software is semi-curated. Windows 8 App store gets this wrong by sending users to a web site for some apps.

Music was similar - before Apple removed DRM I purchased either MP3s from Amazon or CDs and made the files myself now I feel free to buy from several vendors and have bought more music as a result.

Likely I will still buy PC applications but having lost access to paid for PC applications over time or only having the application on one of my systems has been a real concern.

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You might have answered one of the questions but you certainly didn't answer Why won't some people pay for software even if it's cheap and they use it every day? –  Ramhound Feb 5 '13 at 18:29

Some vendors are making it hard for you to give them money even if you want to, by not offering alternative methods of payment.

Take the Google Play Store, for example.

I'm in Germany, and credit cards are not very common here.
Quote from the above link (emphasis mine):

The German aversion to debt also translates to credit card use — or non-use. Only 36 per cent of Germans over the age of 15 even possess a card, compared with 62 per cent in the U.S., according to World Bank figures. And even when Germans do have a card, the limit is usually tied to a customer’s bank balance and the bill is automatically paid off — in full — from the customer’s account within a month or so.

“If I pay with my Visa, then Visa takes it from my account — I don’t get any real benefits,” said Rainer Hoedt, a Berlin high school teacher. “When we use our credit cards it’s basically only when we go to the States and do our travel expenses through it because it’s so easy. Here in Germany I don’t use it at all.”

(note: I don't know where they got the 36% from, but this is a rather high value. I recall that a few weeks ago, I read an article on a German site that said 17%, but I can't find the link anymore)

You don't need a credit card for anything in Germany (we pay in cash or with debit cards) and most stores, especially small ones, don't even accept credit cards.

But still, the only way to pay in the Google Play Store is by credit card.
All the other main players in e-commerce (Amazon, Apple, eBay...) allow other methods of payment, but Google doesn't.

Among those of my friends who are using smartphones, about half use iPhones and half use Android phones.
But the majority of them (including myself) don't have a credit card, so nearly all of the Android users (including myself) are not able to purchase paid apps in the Google Play Store at all.

There exist third-party app stores that accept other methods of payment, but most of those are quite unknown. The only one that I can even name without googling would be the Amazon App Shop, and this one is brand new, they launched it just a month ago here.

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And why is it so hard for a software developer to guarantee anything about the software he wrote?

And why is it so hard to find an insurance company that will cover for that?

Most times they don't even warrant you another copy if you accidentally delete the one you already downloaded.

Tell you that, sir, this software thing you're selling, sounds fishy to me.

Really, selling software is treating costumers like shit. We give them none of the warranties they get by buying a pack of gums and sometimes we even have the nerve to ask more money for support or updates. (updates that cover bugs — that is to say that correct our own errors — that's all they see)

We can't do otherwise because of a combination of market and technical issues, (as computers are built over layers upon layers of logic and no one can guarantee for all the layers he doesn't control) but at the very least we should try to understand and sympathize with their perplexities.

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How is this an anwser? Who are you referring to? –  Kugel Oct 8 '11 at 20:13

"Bootlegging doesn't deprive the vendor of a sale because I wouldn't have bought it anyway" is a false argument in favor of bootlegging. When you choose not to buy X because you "can't afford it," and instead buy Y (something you can afford), you have given X the value of Y.

For example, if you decide you can't afford Photoshop's price of, say, $500 and bootleg it, and instead buy an iPod for $100, you have effectively assigned Photoshop the value of $100 because you would have bought it had it been priced at $100. Therefore, by bootlegging Photoshop you have deprived Adobe of $100.

Alternatively, you could have saved your money by not buying that iPod and a few other things so you could eventually purchase Photoshop. It's not true that you can't afford Photoshop; you just choose to not afford it.

In the aggregate, this gives bootlegging software a real monetary value. When you and thousands of other people make conscious decisions to bootleg and use software that you supposedly can't afford and instead buy other discretionary things which you can afford, you are depriving the vendor of sales, even if they aren't the full retail values.

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The conception that created goods should (have a moral right to be) be gratis and shared is a very nice idea-virus and has spread all over the world.

Software enables that conception really nicely.

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One thing most people forget is that lots of software is priced for countries with mature economies, like the US, Canada, Western Europe, etc. However, people in countries with far lower income (even more than ten times lower) still have to pay the same prices; with an average monthly income of $300 that $30 application doesn't seem as cheap as when you have $3000. Look at Eastern Europe, China, India, etc. for a good example of this.

In addition to that, big companies have achieved de facto status with some software (Microsoft Windows, Office and Visual Studio, Adobe Photoshop and Dreamweaver - these are just some examples); people start using them when young (at home, school, college), thus they become familiar with them, yet they can't afford them. It's not so easy to say "don't pirate it if you can't afford it" when you don't know how to use other software.

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I know of several students who decided to pirate software they couldn't afford, just so they can keep up with their (pirating) peers (many who would be their future competition for jobs making use of such software). There's no easy solution to this one. –  Mark Freedman Dec 19 '10 at 22:28
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-1: did you actually bother to check what are game prices in these countries? –  vartec Oct 3 '12 at 15:36

Well, I think the answer to this is more and more to just do Software as a Service. Desktop apps that the "buyer" runs locally have become really easy for people to pirate. With SAAS, there is no way to pirate it as you control the accounts, etc and they simply can't access it if they aren't in the system and current on their payments.

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Its economics 101: the marginal cost of producing software is 0, and people are used to roughly estimating value by marginal cost (along with the comparative prices of other similar goods).

There's lots of free software available, and it costs nothing to duplicate any software. So, in general, people don't see much value in it unless it very obviously benefits them.

Expanded answer : how do you make money from software?

Jon asked a good question - if there's no profit, why would anyone supply software?

Background : supply, demand and equilibrium

Most people know that supply and demand work together to determine price: this is almost intuitively obvious. But the 'how' is a bit more complex than that.

Over the long term in an efficient market, price will end up being approximately equal to marginal cost (that is, the cost of making the last unit). This is called equilibrium. This happens because whenever the price is higher that the marginal cost, competitors will move into the market and price their product between the marginal cost and the orginal price. This continues to happen until P = mc.

So how do you make a profit?

Market equilibrium doesn't happen immediately. If you release a product with no direct competitors, it takes time for others to create competing products. During that phase you charge whatever you want (this is essentially a temporary monopoly).

How hard it is for competitors to turn up is known as the 'barrier to entry'. In a highly efficent market, barriers to entry are low and competitors arrive quickly, pushing down price.

So you have basically two strategies for making a profit:

  1. You continually come up with awesome new products and ride them until the market catches up, then move on to the next thing
  2. You do whatever you can to increase the barriers to entry

The second point can be done a few ways: some legal, some not. For example, you can buy up all your competitors, but at some stage you'll attract the attention of the regulators. Or, you can make products so well or so complicated that they're hard to compete with. Or you can look at ways of locking in customers so switching is difficult.

In the long run though, price will tend towards marginal cost. You're delaying the inevitable, but you might make a lot of money in the process.

The third way

The third way to make money "off software" is to use it as a loss-leader, and make your money off a complimentary product: eg service and support.

Final thoughts

It's important to note that this is true for all products, basically. Even those with non-zero marginal costs. Whenever P = mc, there's no profit. The reason that the service industry is so attractive is because it's relatively easy to differentiate your service and hence charge a premium for it.

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Economics 101 would be supply and demand surely and the issue with that is if people pay nothing there is no (profitable) demand and therefore there will over time cease to be a supply. –  Jon Hopkins Nov 22 '10 at 11:12
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This reminds me of the Graham piece from a while ago paulgraham.com/publishing.html wherein he claims that traditional publishers, essentially, sell marked-up paper (as opposed to the content of their books). If true, that explains the effects we're seeing; incremental cost for printing a book was much higher than incremental cost for a piece of software. And it required a lot of specialized, expensive equipment that had nothing to do with the act of writing, whereas with software, you can use the same equipment to write and distribute it. –  Inaimathi Nov 22 '10 at 16:00
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@Jon Of course they still work - take a look Microsoft, IBM & Oracle. There's still a lot of companies that make money directly off selling software. The key re piracy is to pick a customer base who can't/won't steal from you. You are right though - if in the long term software piracy becomes absolutely mainstream, direct sales of software will end. People will have to take the 'loss leading' approach. –  Ben Hughes Nov 24 '10 at 22:36

Some basics:

Economics

In selling things, we can divide costs into fixed and marginal. Marginal cost is the extra expense incurred by selling one more thing, while fixed costs are independent of how many things are sold. By subtracting marginal costs from total revenue, we get the marginal revenue (not as standard a term), and costs are normally set to maximize that. By subtracting fixed costs from marginal revenue, we get profit or loss.

Setting prices is normally done to maximize marginal revenue (high prices mean high revenues for few sales, low prices mean lower revenues for more sales). Further, companies are normally greedy, since they're normally rated on profits. Therefore, high prices are not because a company wants more money (they all do), but because that's the price that makes the company the most money. Similarly, companies can't just raise prices to make up for costs or anything else, since if they're doing things right that will reduce their profitability.

Traditional manufacturing

Traditionally, the economy has been based on selling tangible things, even when it appeared otherwise. Newspapers were good at selling packages of cheap paper with news printed on it, not news itself. The secret of being successful was to make and sell things at low cost, and sell at higher prices. In a competitive environment, the market price of something was based on its marginal cost, and it was stable because the manufacturers could make things less expensively than their competitors or customers. This is what most people's ideas of a market economy are based on.

Information Economy

The main difference is that information, in various forms, can be reproduced at almost no cost, both by the original manufacturer and the customer. By conventional market standards, above, this means that the price of music or software or other such things should be approximately zero. The other major effect is that valuable things can be easily copied, so somebody who wants a copy can get one without depriving anybody else of theirs. Indeed, if what is copied has value, then making additional copies, with or without anybody's permission, increases total wealth.

Another effect has been the breakdown of media channels. "Channels" was a good word, because it implied constriction and potential control. When I was younger, the easiest way for me to get access to the AP news feed was to buy a newspaper and read what they printed of it. Today, I have direct access from my phone, so the easiest way is to take my phone out of my pocket.

Music sales, for example, have been affected by both those main effects. It used to be that a music company could manufacture an object containing music much less expensively than I could, and I had no way of getting the music off the object except simply listening to it. This meant that I had to get music from record companies. Today, I can make copies of music easily, and I can get such copies from many sources.

Copyright

The solution to free copying was originally copyright. As long as marginal costs remained significant, and media channels ruled, it was fairly simple. Anybody seeking to make copies in any significant quantity required expensive equipment, and any attempt to make money by selling large numbers of properties could be caught and prosecuted. There was no need to worry about individual copies, since they weren't economically significant.

The legal basis for copyright in the US is the provision of a monopoly for a limited time to encourage people to create things. (I've seen no evidence that this was considered as any sort of property back then.) Copyrights that make it easier to profit from creative work have two desirable features: they allow sufficiently good artists to concentrate on their art, and they provide financial incentive for creating.

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The ease of getting software without paying for it.

  1. The act of duplication is easy. Copying/applying a crack might be even less hassle than getting it "properly".

  2. Use of the duplicated software might be easier (no DRM constraints etc.).

  3. It is easy to avoid prosecution. Stealing cars or shop items is far more risky.

  4. It is culturally easy. Just like certain social groups share an acceptance of drug consumption or a preference for classical music, there are many social environments where digital stealing is accepted or even expected behaviour. I know of people which would feel ashamed to buy a Photoshop for 600 Euros instead of stealing it, because their friends would call them dumb then.

  5. It is easy not to be recognized. People tend to act more selfish if they do not fear social consequences. Like people behaving less orderly while on a vacation spot than when their neighbours are watching. I think many people will keep the surplus money if someone hands them erroniously too much exchange at a shop. But they would think twice if they knew they are watched and others know about the mistakenly given money, too.

  6. Not thinking is easy. The inflicted damage and the morale behind it is abstract. Ethical issues are harder to grasp and to live by. Everyone knows eating too much is unhealthy but still many are doing it. The immediate fun beats higher goals (like living more healthy).

  7. Payment is done individually not automatically, so there is choice (that's a a totally different argument than "ease", but thrown in as a sweetener). Many industries dealing with intellectual properties have developed automatic payment systems (like a radio station having to pay for songs they play, like automatic fees on blank CD sales etc) to remove such a choice, because everytime there is a choice, there will be one to make the wrong one.

I think most justifications using an ethical point of view to justify software duplications without paying for it (like "software has to be free", "it's not worth that much money", "I would buy it, but..:" etc.) are clever excuses for very mundane human urges that children already show while playing in a sandbox: Why should I ask for permission if I can just take the shovel from him much quicker with force? It is a very strong argument that Darwin had called "survival of the fittest"...

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Lots of good answers but I'd suggest another:

Because they've not yet had to face the consequences of piracy. By that I don't mean fines, prison or other legal sanctions, I mean the impact on software developers, authors and so on.

One of the justifications for music piracy is that it actually ends up being marketing for the band live and there is some truth in that. You can't pirate the live experience so crank up the prices there, sell more t-shirts and make your money that way.

The problem is that doesn't work for software developers (or authors if you pirate eBooks). If we stop paying for software people will, in many many cases stop making it and that's the consequence.

The reality is that it's not all Adobe and Microsoft who make enough from corporates to survive individuals stealing their stuff (and arguably actually benefit from it as it enforces their position as the defacto standard). It's hundreds of small companies who aren't making so much money that they can survive having their markets cannibalised. For every hobby programmer churning stuff out in their spare time for the love of it, there are dozens and dozens who are doing it for the money (either a salary or as an independent software developer). Not because they're evil or money grabbing but because they have mortgages and kids and need to work to live. I'm guessing that many of the people on here fall into that category.

For some of these there will be alternative business models (support or focusing on corporates where the laws are enforcable or bespoke software where it's very nature means it can't be copies) but for many there won't be and when that happens that software will cease to exist and there will be less competition, less innovation and far less quality out there.

And at that point people might just realise that they shouldn't have been quite so off hand when talking about marginal cost and lose of "potential sales" because if you lose enough of your potential sales it hits actual sales.

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@Alan - Adobe and MS make enough from corporates (where the law can be enforced) that they can still be profitable even if many home users don't pay (and in fact as you say it can be argued that they benefit as it encourages skills in their products and re-enforces them as the defacto standard). But say you write (random example) WireTapPro for the Mac - a small (rather good) sound recording tool. There are no easy to enforce corporate sales and you're never going to be mass market so if individuals don't buy your software then frankly no-one will. –  Jon Hopkins Nov 22 '10 at 14:47

There are several reasons not related to perceived value or cost.

  1. Cracked software overrides DRM which means I can actually use it the way I want.

  2. It's actually difficult to buy some software. I actually had to call Microsoft Support to find out where I could buy a copy of VS Professional. By the time I actually had a copy in hand, I could have downloaded and installed it from a pirate site.

  3. Versioning issues. I've already bought this software, but it's the previous version. I've bought the 6 previous versions. But you've changed the file format, and now I can't read documents that others are sending me.

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@Gary Rowe: Arguably, Sony-style draconian DRM is just as bad, and that's a 100% risk. At least some cracks are virus-free. –  MSalters Nov 23 '10 at 14:05

One issue is that you can often get a better product by pirating instead of buying. Games frequently come with DRM that can make them difficult or impossible to play legitimately, and some DRM has damaged people's computers. You can't buy the non-DRM versions, you can only pirate them.

Some people buy games, don't bother opening the shrinkwrap, and then get copies from pirate sources and play them. If you get people in the habit of doing that, don't be surprised if they start skipping the "buying" step.

DVDs are in a similar state. Many of the DVDs I've paid for have unskippable ads and such. If I wanted to play the movie or TV episodes or whatever without playing through those, I'd have to pirate rather than buy.

When you can spend money on an inferior product, or pirate a superior one, you're far likelier to pirate and less likely to pay.

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+1 for the DVD unskippable ads contributing to an inferior product than the pirated version. –  Gary Rowe Nov 22 '10 at 15:13
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My take on many DRM schemes: Making the life of people who do the right thing hard while doing little to affect the people who do the wrong thing sounds like the wrong kind of incentive. –  MIA Nov 23 '10 at 3:21
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Did Anybody else find the unskippable FACT "ad"(youtube.com/watch?v=HmZm8vNHBSU) on DVDs annoying. For a start its preaching to the converted? –  thing2k Nov 23 '10 at 13:01
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Good point. But there is one part of games that may balance out DRM somewhat since it's only available for legitimate copies: multiplayer. Since in most games multiplayer is software plus services (S+S) rather than just software, it can't be pirated (although it can be imitated to some degree). This provides an added value that encourages you to purchase the game. DRM is still a pain, though. –  Allon Guralnek Nov 23 '10 at 18:58
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@Loren - I didn't say it was. My point was that if you're already breaking the law just to ensure you can use the product you paid for, then the law isn't going to be the thing that stops you pirating. In fact breaching DMCA-like laws to fairly use a product you paid for is a crime, whereas breaching copyright is merely a civil offense. –  Steve314 Oct 9 '11 at 8:01

Maybe not anymore, at least not in Europe (particularly in Switzerland, where I live). Many people pay for their apps on the iPhone. If an app costs as little as 1-2$ many people don't think twice before buying it..

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Hmmm, that's interesting. Maybe if it's as simple (or even simpler) to buy an app than to hunt for a cracked yet working version, people won't bother to pirate it? (and yes, buying software is a hassle for the most part, what with e-mail registrations and mandatory multi-page questionnaires) –  Piskvor Nov 22 '10 at 16:34

Most of what I use is free, so no reason to pay.

For games, they are too much expensive.

You also have to consider that peoples that don't really know how software is done, hence have no clue what was done by whom and how it is separate of their OS, so obviously they don't really care for the people who, they might say, "stayed on his chair for weeks".

I guess we live in a world where we don't really figured out how to morally distribute the product of our true physical efforts and depending on merit, so until that, I guess nobody will really want to pay money which has more a physical/survival value (food, house etc), rather that a thing which they don't really know how it has been made, or even the purpose of the software.

Plus the software industry is really young, and I don't really think you can really monetize something else than OSes or entertainment software (games, video editing stuff).

Of course what I said is not true in the professional environment, but in that field, I guess it can vary, but don't forget the quality can vary a lot, as prices.

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Yes, you can. Add up the hours it took to produce the software, multiply by a reasonable wage, and that's how much it cost. Figure out how many copies you want to sell (or how many you think you can sell in a reasonable period) and divide by that - there's your price per copy. Add a reasonable markup, and that's the retail price. –  Michael K Nov 22 '10 at 13:28
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How to you justify the games are much too expensive claim? A large video game might have a team of 100 people working for a year. The outlay will run to millions of pounds/dollars which has to be recouped. –  Jon Hopkins Nov 22 '10 at 13:38
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+1 For "stayed on his chair for weeks", for many people we do not perform a real job. In that we do just sit about and get paid to think and type, often I find myself agreeing with my friends coming home from hard physical labour or monotonous drudgery. Work you enjoy is not really work after all, is it. –  Orbling Dec 19 '10 at 18:51
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@Orbling: +1 if I could: it's not seen as a Real Job (TM), for computing is now infrastructure: our effort is only visible when it fails. As long as the Network is up - links are online,DNS resolves,car traffic signaling does The Right Thing,card payments are processed,and FarmVille is up - we're useless: "why do you sit on your chair?The Golden Calf Just Works, by itself!" The instant it goes down however, we're again useless, if not downright evil: "why didn't you prevent that, instead of wasting your time sitting on your chair?". Not really good for PR, now is it? (what, me bitter?) –  Piskvor Dec 20 '10 at 9:57
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@Orbling: Not in the developed world, no. On the other hand, I have heard many people complain when they don't, myself included. –  Piskvor Dec 20 '10 at 13:54

Answers seem to be coming down on the effect of software piracy and it's relative harm, mostly due to the marginal cost of the software duplication. After all, once a team has created the software the cost of making more of the same is effectively zero. Pure profit I hear you cry. Not so. This team of (non-corporate) people has invested their own personal time in the development of that software, making sacrifices in the hope that they will see a decent return. However, piracy reduces this return.

Even if the team is paid by some big faceless corporation, the corporation still take a hit. They still have to pay their marketing department and so on. To mitigate the cost of this piracy, big software companies used to choose the easy option of driving up their prices so that the legitimate purchasers help to susidise the losses attributed to piracy. How that is actually measured and evaluated I can't imagine - it seems more like sticking your finger in the air and just seeing how much the legitimate market will stand until the honest folks turn to piracy. There are variations on this strategy which include punishing piracy way outside of its actual damage to profits in order to drive the herd back into the legitimate market. These tend to be counter-productive because they criminalise your customers which is never good for sales.

So to combat piracy you have to add value in a manner that is not directly related to the initial purchase. As other people have stated, this can involve access to an exclusive community (this could be a service contract), or special rewards only available with a legitimate purchase (VIP access to something). There are many ways to add value, but this does introduce additional cost which can't be part of the initial payment. So a two-pronged strategy is employed: online exclusive communities with an ongoing small subscription (usually with a difficult cancellation policy). Essentially, the software development cost is treated as a loss-leader to hook you in to a long term payment plan. If your market is well known in terms of their reaction to this strategy (Facebook/XBox Live profiling anyone?) then the overall cost can be calculated in advance to determine how much budget you can have for your development costs.

So, to summarise. Piracy is wrong, but corporations and individual developers need to ensure that they offer real value for their product so that their customers can trust that they are getting a fair deal.

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+1 for explaining that it's not pure profit. –  Michael K Nov 22 '10 at 13:30
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@Michael: Marginal costs are the amount of extra cost per unit sold, while fixed costs are independent of number sold. For a pure software product, marginal costs are awfully close to zero, and the question is whether total revenue is more or less than the fixed costs. –  David Thornley Nov 22 '10 at 15:20

As I said in a comment, there's a lot of people that feel entitled to having a piece of software (be it an advanced piece of image editing software or the latest video game), and feel that it's OK to pirate something if you can't afford it - probably also because pirating something is a lot easier than stealing.

There was a discussion years ago about stealing food if you couldn't afford it - I guess this would be something like that, except software isn't a primary requirement for survival. It's a secondary luxury, especially considering there's a lot of free alternatives. Perhaps not as feature-rich or awesome as the paid ones, but still.

A second reason for piracy is that a lot of people don't see any benefit in buying software. The purchased thing does the exact same as the pirated - and in some cases, the pirated one is even easier to install or acquire as the purchased version, for example when there's heavy copy protection on it that does things like require an internet connection or the disk to be inserted into the drive at all times.

Recently, some video games have a very big online component, and it's very difficult or inconvenient to play the game online with a pirated version (or you play in a 'niche market' of a pirated online game, away from the main bulk of online players). This is actually a good way to go against piracy, as buying the product gives a clear advantage over pirating - access to the big online community behind the game. Especially considering most of these games are finished in 6 - 10 hours, while one can spend hundreds on the online component.

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The interesting question is: How do you tell that to your friends without feeling like a jerk. Seriously, I tried it several times, and it always back-fired. People don't need to use a pirated copy of MS Office, when Open Office does everything they need to do, almost as intuitively. –  Robert Giesecke Nov 22 '10 at 8:58

As long as software publishers charge for every copy of the software instead of simply the labour cost that went into producing it, not many will be interested in paying. That is why technologies such as HD DVD and BluRay are developed. They are one way to restrict people from copying and reproducing copies of software, thereby artificially increasing the software reproduction costs many folds.

OTOH, the open source and free software world simply charges for the labour cost. The buyer is free to do whatever they will, of course under the terms and conditions of the license under which they bought the code in the first place.

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FOSS charges the labour cost? Huh? Last time I checked it charged nothing. Sure some models charge for support and the like but that's different - the user isn't paying the labour cost for the product development. –  Jon Hopkins Nov 22 '10 at 11:09
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There's nothing wrong w/ charging for every copy, esp. hardcopy like CDs. What is wrong is price gouging. Once the development costs are paid, prices should go down to not too much over what it cost to burn it. Or if buying the product gets you support, the price should include that as well. However, I can't say whether companies factor all that in or not as I am not a businessman, just a lowly programmer :) –  Michael K Nov 22 '10 at 13:19
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@Michael - with respect I don't think you do the same yourself. I'm guessing your salary is based on what the market will let you charge rather than you working out your basic living costs and just charging that. How come you're allowed to charge extra but they're not? –  Jon Hopkins Nov 22 '10 at 14:30
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@Jon That's true. However, couldn't the fact that piracy is so prevalent imply that the market doesn't want to pay those prices for the software? –  Michael K Nov 22 '10 at 14:34
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I was wrong in saying that piracy is only an artifact of price gouging being rampant in the software industry. I personally feel that greed, on both sides, is creating the problem. Unless that is fixed, there will be no solution. –  Michael K Nov 22 '10 at 14:57

There is another part of this that you guys are also forgetting. What is the difference if you take a $59.99 video game and walk out of a store from pirating/copying/stealing the same $59.99 game online?

Pretty good chance you wont be in handcuffs 10 minutes later from downloading it online.

On a side note: I don't care it Piracy is considered Stealing or not, If I made something and you use it or take it from me without paying, you stole it. Plain and simple.

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The difference is that if you're the game shop, you're out of pocket. The better analogy here would be the difference between stealing a bottle of spring water from a shop versus going camping and drinking directly from the source stream. ie Somebody has suffered an actual financial loss. In the piracy (or drinking from the stream) case, it was only a loss of a potential sale of the game/water. But noone is actually out of pocket. –  Bobby Tables Nov 22 '10 at 8:58
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@Guzica - that's fine when it's a few people stealing it but when it's a lot of people (which is becoming the norm) and the developer is no longer making the same money they would have done, it might as well be a physical theft. People justify their actions based on the economics of copying Office or Photoshop but then behave the same for applications from small software houses who don't make that sort of money and where there is a genuine impact on the people working there. –  Jon Hopkins Nov 22 '10 at 10:52
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@Guzica: "So guys, we have 1000 actual sales and about 10000 illegal copies. Sorry, but we can't pay you full salary this month, as we didn't get the expected income and thus we don't have enough money." But hey, the illegal downloaders don't see this direct financial loss, LA LA LA IF I CAN'T SEE IT, IT DOESN'T EXIST. (true story - not every company is Microsoft-sized; consequently, not every company can sustain the same lack of income that MS can. (Oh the wonders: programmers (like, y'know, people who make money from writing software) argue that pirating software doesn't hurt anyone.)) –  Piskvor Nov 22 '10 at 11:51
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@Piskvor: Your answer might as well be valid lisp code. –  Alan Pearce Nov 22 '10 at 14:39
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@Piskvor: The important thing is not 10K illegal copies, but 1K actual sales. Most of those 10K illegal copies wouldn't have been sales, and they cost the company nothing in addition. –  David Thornley Nov 22 '10 at 15:12

As a student, I don't really have a way to pay for the software I use or the games I play. I just don't have a disposable income. If I could afford it, I would be glad to purchase them and support the developers. It's just that a lot of software I use is completely out of my price range.

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This argument I see used a lot - "I don't have the money for it, so I pirate it". I believe a large part of software piracy is caused by a sense of entitlement - people that believe they somehow /have to/ play video games or have certain (paid) software, even if they can't pay for it. It's probably a cultural thing, not wanting to be left behind, not wanting to have anything less than others, that kinda thing. Thing is, you're not entitled to it. Would you steal a car if you couldn't afford one? –  Cthulhu Nov 22 '10 at 8:12
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@Cthulhu "Would you steal a car if you couldn't afford one?" - No but I might clone one –  Willbill Nov 22 '10 at 9:43
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Oh look, it's the canonical example of the "I cannot afford this" straw man. If you could not afford that, you'd be very poor and you'd have different problems (as in "how can I pay for food/housing/electiricty this month?",not in "I really shouldn't buy the 5th frapumochacino today").99% of the cases, it stands for "I don't want to pay for this,and I won't (because I can get away with it)".Also,you learn "I don't have to pay":don't get me started on the graphic/SW designers with pirated software who get angry when someone steals their work, because "my creations are something different!" –  Piskvor Nov 22 '10 at 11:40
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If I don't have money to buy X, where X is a piece of software, then by pirating it I haven't deprived the vendor of a lost sale, because I wouldn't have bought it anyway. Therefore, the vendor loses nothing from that particular piracy. If I then get used to X and buy it when I've got the money, the vendor has actually benefited. The difference between pirating and theft is crucial here: a pirate deprives the legitimate copyright holder of nothing directly. –  David Thornley Nov 22 '10 at 15:05
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@Piskvor: Sometimes it works like that, sometimes it doesn't. Baen Books seems to have made a good deal of money with a business model that includes giving away free electronic books and selling physical copies. Microsoft, at one point, seemed to be allowing bootleg copies of some of its software on the grounds that people pirating Microsoft were at least not being familiar with the competitors. (From what I've read, a visit from the Business Software Alliance is less pleasant than just having to buy some licenses quick.) –  David Thornley Nov 22 '10 at 17:43

Most of the time, it's about the culture i.e. the big environment instead of the price itself.

In the case of donation to Wikipedia, I believe it's somehow related to pluralistic ignorance in social psychology. People choose to think others (many of them) may donate, so they don't have to.

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I think a big part of it is the act of duplication. And this goes for all forms of IP, not just software.

The thought process is basically this: "If I take a program/movie/song/whatever, and make a copy of it, there are now 2 of them instead of 1. And the person who had the first copy still has it, they haven't lost anything!" - This is quite different to tangible items. For example, if someone takes your bicycle, you no longer have the bicycle, it was stolen from you. Not so with IP duplication.

The consequence of this is that it's very easy to think "eh, I just want to get this program/song/movie and try it out". Since the copy is free and nobody "loses" anything directly, it feels like a harmless move.

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@Kugel: IP = Intellectual Property. –  Bobby Tables Nov 22 '10 at 2:11
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@Guzica: it is precisely for the reason that you explained that the whole notion of Intellectual "Property" is stupid. I think the Disneys and Microsofts of our world shot themselves not only in the foot with this but basically blew their entire leg off with trying to push this metaphor. –  Jörg W Mittag Nov 22 '10 at 3:56
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I have a simple and stupid evaluation process for those morale things. I ask myself: "what if everybody does that ?". I guess many singers would still be obscenely rich without private CD's royalties, between concerts, TV and radio broadcasts. At the same time, as a self employed developer, I would hate to see Mr.B use for free the program I charged Mr.A for. But then so many people today release free software...there must be some intrest, right ? The question is not simple, and definitely not a Yes/No question. –  iDevlop Nov 22 '10 at 12:46
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@iDevelop, that's not stupid at all. If we applied the "what if everyone would be doing x" to a lot of things, this planet wouldn't be so crowded of egocentric parasites. ;-) –  Robert Giesecke Nov 22 '10 at 14:45
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@iDevlop: Musicians typically don't make money on CD sales, but rather on live concerts and souvenirs. A group has to make it really, really big before the big labels' accounting practices have to acknowledge profit from CDs. Obviously, this doesn't apply in all fields. –  David Thornley Nov 22 '10 at 15:23

I think part of the issue is that when you bootleg software, movies, etc. you only deprive someone of a potential sale. The person selling the goods is no worse off than if you had simply done without it. When you steal a physical good, you actually deprive someone of that good. The person is worse off than if you had simply done without it, because they no longer have the good.

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There is also strong question as to whether bootlegging actually deprives someone of a potential sale. It's a rather sticky philosophical issue, but one not supported by independent studies. –  greyfade Nov 22 '10 at 5:22
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@greyfade - semantics and an excuse. At the end of the day you are using something without the owner's consent and I think that generally we can agree that that's not nice. –  Murph Nov 22 '10 at 8:26
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@greyface - agreed there is debate but (anecdotally) I know a lot of people who pirate a lot of stuff to the point they no longer buy anything legitimate. Now maybe not all of those were potential sales but a small number would have been so as piracy becomes closer to the norm there is real loss involved. –  Jon Hopkins Nov 22 '10 at 11:14
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@Erik: Many people think "intellectual property" is a meaningless phrase, and that the reason for copyright is to provide an incentive to create, not to make some new property right. Do you think the world would have been better off had Shakespeare strictly controlled the distribution of his plays? –  David Thornley Nov 22 '10 at 14:55
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There are definitely potential sales lost, but they're not always the one you would think. For example, if photoshop couldn't be pirated, there would be much more sales of lightweight photoshop alternatives than of photoshop itself. The continued piracy of photoshop deprives its upstart competitors from potential sales. –  Joeri Sebrechts Nov 22 '10 at 20:29

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