The music industry, software industry, film industry, etc. are all quite concerned about so-called Internet pirating (acquiring products digitally via the Internet without paying for them). Allow me to give you a rundown of how this goes. You want the latest Fitty-cent album, right? Why go and pay for it, like a sucker, when you can just download it for free? (Note: you could also download it and pay for it, but again, sucker.) As the story goes, the really crooked used to just go into the store and steal it, but now that it’s so much easier and discrete online, many more people are getting into it. Software companies are especially worried now because their products sell for hundreds of dollars new and their market is probably a bit smaller compared to the average $15 to $20 for the latest Fitty-cent album, which, sadly, has apparently the market of the entire world (possibly to infinity and beyond).

Well, attention said industries.

Over the last several decades you guys have spent quite a bit of time and money securing, locking-up, and placing chastity belts on your products. You’ve also run campaigns of sorts proclaiming how unethical it is and have threatened to prosecute. And you did prosecute some, but only went after a few of the major providers, the mob bosses, if you will. And (look out, incoming rhetorical question) what has it done? Not much. Sure, it has fended off a few thirteen-year-olds looking to download a Britney Spears “album”. But hackers/programmers/crackers/pirates are always one step ahead (and, FYI, I don’t just mean Internet pirates, I mean pirates in general… those sneaky bastards are always one step ahead of me!). The ultimate effect, however, is nearly null and you know it. You are still crying “significant” (a.k.a. probably like 5%) losses from your godzillion-dollar incomes.

Well, I have some helpful business tips, since the lot of you seem to be so lost.

Now I know that “stealing” in any of its forms seems to be just wrong. (I put ‘stealing’ in quotes because I actually prefer the term ‘copying’ for obvious reasons.) However, let us put aside strictly ethical issues for a moment and deal with practical business issues. Do you want to mitigate pirating? If you answered yes to previous question, then listen up. Much like stubborn kids, pirates and consumers in general don’t respond well to the following:

(1) threats,
(2) false advertising,
(3) companies who are looking to basically rip them off,
(4) poor products, and
(5) (most importantly) over-pricing.

The biggest mistakes the music industry are making are (4) and (5). (That industry has failed in all five categories, but (4) and (5) are, I think, the worst.) Granted, prices have dropped a bit. CDs used to be consistantly $20 new. This is ridiculous. The average now is $15 new, but only because it is new and on sale for its new release. After a few months, the album is jacked back up to about $20. I think sales would dramatically increase if CDs, new and non-new, were about $10. Most of the indie music I listen to does adhere to this idea and, consequently, I buy lots of that music. However, there has been a consistent degress in (4) as well. I think many people are really tired of the kind of music that is now churned out by the music industry. It’s as if K-mart and Wal-mart are the two major labels and they’re intent on producing quantity, not quality. So, increase quality, decrease costs. It’s simple business strategies. And don’t give me that crap about how you can only cut costs so much without “going under”. This won’t be a problem if you don’t forget to consider cutting your own salary a bit… say, from 100 godzillion dollars a year to 90 godzillion dollars a year?

A note on iTunes:
iTunes and other pay-to-download ideas have made efforts to provide an alternative to pirating. Such programs allow two advantages to downloading as opposed to going to the store to buy. (a) quicker acquisition of an album (by downloading) and (b) the complete CD is usually only $9.99. So, if you are drawn to pirating because it’s quicker and cheaper, then iTunes is the next best thing to ween you off. This is a good effort. But, iTunes only let’s you download low-quality mp3s (128kbps). They don’t even allow you to pay more for better quality. And let me tell you, most “pirates” are elitists: they want high-quality–just like 192kbps or so. Note: to be honest, I haven’t checked out the quality of other download sites. Perhaps someone does provide higher-quality mp3s. If so, bravo.

(Film industry: follow the same procedure as the music industry. Repeat as necessary and call me in the morning.)

Software companies clearly over-price their products. So they need to work most on that. Very few people can afford $200 for a new copy of Windows and then $100 for the next upgrade. Likewise for other programs such as Microsoft Word, Excel, and Macromedia Dreamweaver. Dreamweaver is about $200 new. Microsoft Office with Word, Excel, etc. is probably several hundred dollars as well. I don’t know of any consumer who thinks these are fair prices.

The gaming industry, a subset of the software industry, has done the best job of all. They have kept prices pretty reasonable (about $50 new). $50 is a bit much, but prices fall relatively quickly and according to how good the game is. This is smart, because it would be quite unfair to charge the same price for a game that took a week to make versus high-quality games that take years to make, like Half-life 2.

However, the gaming industry could do more to fend off scurvy-ridden pirates. They need to focus on (3). This is a bit harsh. The gaming industry (at least the majority) is not trying to scam their consumers. But they need to focus on taking better care of their customers.

Case in point: Valve, who released Half-life 2, sold the game new for $50. This is a reasonable price for this game considering how well it was done and considering how many free mods you can get for such a great engine. But, they didn’t stop there. Upon purchasing the game, you also received a second bitchin’ game, Counter-strike: Source. This is an award-winning online multiplayer game that, unlike a single-player game, will last much longer. But they didn’t stop there. They continue, some two years or so later, with updates at least once a week. And these aren’t just patches to fix their mistakes. They’re improvements, extra maps, more models/player-types, new technology (such as High-Dynamic Range lighting)… at no extra cost! In short, Valve takes care of their customers. Consequently, HL2 & CS:S haven’t really been pirated and the company is well-respected among gamers.

Consider the following as well. I’m sure it costs near the same amount of time and money to create a high-quality game like Half-life 2 as it does to make a program like Nero CD-burning software suite. Half-life 2 was $50 new, came with CS:S, provided many updates and improvements, is now down to $40 with even more games included. Nero is $100 new and will stay that way until they release a new version, which will also be $100. Why are these products so similar in cost-to-make yet so different in price? I think it has to do with the gaming industry listening to their consumer base, while the more general software industry charging whatever prices they want.

See, us consumers don’t have very many ways to tell companies that they are charging more than we’re willing to pay. We can refuse to buy the product. But some of us are too weak-willed to not pay for the over-priced product, because we want it so badly. Why can we not communicate
our disapproval by pirating the product? That way, not only do we not buy the product, but we cause a scene by pirating it. Clearly, pirating has gathered their attention. Some people think that pirating is just childish stealing. But I say it is consumers taking advantage of what little resources they have to fight back companies who are trying to screw them. So, these industries can continue to ignore their bread and butter (the consumer) or they can listen to us and pull their act together.

Basically, large companies have way too much control over consumers in the U.S. for this to be a true capitalistic market. So, we are being over-charged for products that we really want, because we can’t make them lower prices or increase the quality of the product. Why can’t we exercise the very little power that we have to try and balance the market? I think most pirates don’t want everything for free, they just aren’t willing to pay that much for that kind of product. But I can only speak for myself. These are my motives and thoughts. I’m sure there are those out there who will pirate no matter what, just for the fun of it. However, I think the majority of people will support companies they respect. And if you don’t, I suggest you do.

A note on ethics:
So I don’t think pirating is inherently good or justified. I just think that there are situations in which consumers may justifiably do it. I know it’s a form of stealing and that it’s illegal. But, we all seem to think that some forms of stealing are ethical (e.g., Robin Hood style stealing… you know, if it’s for a greater good, etc.). And, frankly, I don’t much abide by the law if I disagree with it… that is, unless I think there’s a good chance I might get caught. Besides, who doesn’t do a California stop every once in awhile?

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