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How many people steal Quickbooks? How many people steal ERP or CRM software? Now how many people steal Photoshop, Microsoft Office, and computer games? Its ov

by alttab 17y ago

How many people steal Quickbooks? How many people steal ERP or CRM software? Now how many people steal Photoshop, Microsoft Office, and computer games? Its overpriced for the market, based on the added marginal value. The supply is greater than demand (especially for digital products - versus services - supplies are virtually unlimited), and people are correcting it by downloading it off the internet for free. These people probably wouldn't have bought it anyway - so its not stealing. And its not wasted resources by the these firms so they can't count it on the books as a loss. This is economics 101. A supply curve goes up with cost, a positive relationship with price. As price goes up, demand goes down, and the market price is where they meet in the middle. Because it cost virtually nothing to copy bits, the supply goes up. As the supply curve shifts up vertically, the demand doesn't necessarily change (demand curve shifting to the right) to compensate to keep it at the same price. Since demand is still at a constant rate (a certain number of people want to play these games), but supply is practically unlimited, ethically people can talk themselves into stealing it for free (correcting market price). As software developers I think HN is a perfect forum for audience polarization, but the fact of the matter is both arguments have their merits and can coexist without mutual exclusion. After reading the article then looking at the comments I was actually very surprised. But I'm merely adding my portion to the discussion.

cellis 17y ago
How many people steal natural gas, electricity (yes you can equate stealing electricity to stealing digital media: it's transient, marginally inexpensive to transmit, etc)? The difference is simply a matter of enforceability.
- alttab 17y ago
  Natural gas is a resource that can not be digitally copied, and you may think electricity comes from vapor but I can assure you it costs money to produce it unless you have your own solar panels and are off the grid. And its not necessarily a matter of enforcability as it is availability. If natural gas and electricity were as easy to steal as computer games or WiFi then people would do it. Natural gas and electricity, while commodities, are still limited by our technology and can not be given to everyone with a computer as easily as computer games.
marilyn 17y ago
Producers of software like Photoshop and Office stand to benefit from user level piracy. For example, not many students and graphic artists starting out can afford to buy a copy of Photoshop, let alone the entire Creative Suite. If all the talented creative types opt to spend their time learning GIMP instead of pirating Photoshop and learning how to use it, the companies that hire them have no reason to buy the expensive software. In effect Adobe needs users to pirate their software to ensure there are as many people as possible who know how to use it, thus securing the sales to businesses.
- alttab 17y ago
  That is a very good take on the Photoshop business model. Very nice. I never looked at it that way but I'd agree 1000% because professional shops will usually have legit licenses. "Photoshop experience a plus"
- nzmsv 17y ago
  Actually, MS has finally figured this out, and has a deal on Office for students ("the ultimate steal"). It's Office Ultimate for $60. Pretty much everyone I told about this who was using a pirated Office bought a copy.
  - aneesh 17y ago
    Yeah, this is their version of "get 'em while they're young". There's also http://dreamspark.com http://dreamspark.com which gives out free copies of Microsoft's developer tools (Visual Studio, SQL Server, etc) to students.
    - Ras_ 17y ago
      IEEE and ACM also dole out MS developer tools to students for free (price of subscription). For example I got Windows 7 release to manufacturing -edition from ACM this way two or three months before its launch date. They've since pulled the plug on the offer.
richardw 17y ago
"Because it cost virtually nothing to copy bits, the supply goes up." There's a lot more to this discussion, because it's not a theoretical 'perfectly competitive' market. Supply in the case of one product is restricted to one supplier so it doesn't mirror a normal S-D curve. In a normal supply-demand curve supply moves up because others enter the market with equivalent products, driving the price lower until there's a balance. In the case of Office, others have entered the market and, having created alternatives, the price is lower than it would otherwise be. There is a lower limit to the (price x sales) of Office below which Microsoft would have no incentive to create it. If the software market could be equated to a normal S-D curve with a single product in the market, software developers would quickly restrict the amount of applications they sell. You'd only have 100k Office licenses per year.

by alttab 17y ago

cellis 17y ago

How many people steal natural gas, electricity (yes you can equate stealing electricity to stealing digital media: it's transient, marginally inexpensive to transmit, etc)? The difference is simply a matter of enforceability.

alttab 17y ago
Natural gas is a resource that can not be digitally copied, and you may think electricity comes from vapor but I can assure you it costs money to produce it unless you have your own solar panels and are off the grid. And its not necessarily a matter of enforcability as it is availability. If natural gas and electricity were as easy to steal as computer games or WiFi then people would do it. Natural gas and electricity, while commodities, are still limited by our technology and can not be given to everyone with a computer as easily as computer games.

marilyn 17y ago

Producers of software like Photoshop and Office stand to benefit from user level piracy. For example, not many students and graphic artists starting out can afford to buy a copy of Photoshop, let alone the entire Creative Suite. If all the talented creative types opt to spend their time learning GIMP instead of pirating Photoshop and learning how to use it, the companies that hire them have no reason to buy the expensive software. In effect Adobe needs users to pirate their software to ensure there are as many people as possible who know how to use it, thus securing the sales to businesses.

alttab 17y ago
That is a very good take on the Photoshop business model. Very nice. I never looked at it that way but I'd agree 1000% because professional shops will usually have legit licenses. "Photoshop experience a plus"
nzmsv 17y ago
Actually, MS has finally figured this out, and has a deal on Office for students ("the ultimate steal"). It's Office Ultimate for $60. Pretty much everyone I told about this who was using a pirated Office bought a copy.
- aneesh 17y ago
  Yeah, this is their version of "get 'em while they're young". There's also http://dreamspark.com http://dreamspark.com which gives out free copies of Microsoft's developer tools (Visual Studio, SQL Server, etc) to students.
  - Ras_ 17y ago
    IEEE and ACM also dole out MS developer tools to students for free (price of subscription). For example I got Windows 7 release to manufacturing -edition from ACM this way two or three months before its launch date. They've since pulled the plug on the offer.

richardw 17y ago

"Because it cost virtually nothing to copy bits, the supply goes up." There's a lot more to this discussion, because it's not a theoretical 'perfectly competitive' market. Supply in the case of one product is restricted to one supplier so it doesn't mirror a normal S-D curve. In a normal supply-demand curve supply moves up because others enter the market with equivalent products, driving the price lower until there's a balance. In the case of Office, others have entered the market and, having created alternatives, the price is lower than it would otherwise be. There is a lower limit to the (price x sales) of Office below which Microsoft would have no incentive to create it. If the software market could be equated to a normal S-D curve with a single product in the market, software developers would quickly restrict the amount of applications they sell. You'd only have 100k Office licenses per year.