I have been getting a number of comments and suggestions from all around on the last piracy post – this is really inspiring, and very informative! As promised, here’s a summary of all the comments and suggestions received so far for the benefit of all our readers… please keep them coming!
Price cuts and Per feature Pricing
Ravi suggests that software companies can help themselves a great deal by allowing customers to choose the features that they want and pay on a per feature basis (rather than for the entire package). He gives the example of Windows XP and says “unless one reads computer magazines or is a geek one cannot know all the features. There lies the mistake of software companies. They try to sell software with lots of capabilities to ordinary mortals with ordinary requirements…. Similarly music companies think that [the consumers] will be interested in the album where as [they] may be interested in a single track.” He summarizes his comment by suggesting that the industry do some more research into what it is that the customers really want.
I think the idea of unbundling the functions and maybe having charges based on the number of functions the user wants is an excellent and very practical idea. What also occurred to me was the prices of the software itself – (I cant make as strong an argument for music though) if consumers have the option of buying the original for Rs. 1000 and a pirated copy for Rs. 200, many of the consumers would choose the original. However, if the original is priced 20 times higher than the pirated copy, as is usually the case, the option of buying the original does not even occur the middle income user. The profits lost in the form of price cuts would, I believe, be more than compensated by the increased sales.
Extending this reasoning a bit further, it is necessary to note that the purchasing power (in dollar terms) of an average (middle class) buyer in developing countries is much lower than the purchasing power of an average buyer in developed countries. It is therefore not entirely surprising that the instances of piracy are much higher in developing countries than in the developed countries.
The impact that the prices of copyrighted goods have on the buyers in various countries differs according to this purchasing power. In a very interesting article (a little dated, but insightful nevertheless), Lawrence Liang & Achal Prabhala argue that “if consumers in the USA had to pay the same proportion of their income towards these books, as their counterparts in South Africa and India, the results would be ludicrous: $1027.50 for Mandela’s Long Walk to Freedom and $941.20 for the Oxford English Dictionary. It is instructive then, that the prospect of paying $440.50 for Roy’s God of Small Things in the USA is evidently alarming: whereas, paying $6.60 for the book in India (which in Indian terms is exactly the same value as $440.50 in the USA, by this logic) is not treated with similar alarm.” There’s a lot to think about here!
Banning Cracks and Mounting Software
Ajay Chandru suggests that mounting software and “cracks” for software available on the Internet should be banned. This suggestion is close to the law under the US Digital Copyright Millennium Act that proscribes the circumvention of technological measures to prevent unauthorized use of copyrighted materials. This law has been criticized by a few as being over broad. One of the issues that might arise in such cases is whether there are substantial non-infringing uses of the alleged “cracks” and “mounting software.”
Piracy supporting profits?
By far the most interesting point of view that has emerged so far in the discussions under the Piracy posts (and also found its way into our Spicy Comments compilation for the week) is by Sunil who is of the view that piracy is in fact responsible for high profits. For this reason, the industry actually encourages piracy and does not want to completely eradicate it. What made this comment even more interesting was Shamnad’s example. He said: “When SAP entered India, it wanted to ensure that there were no pirated copies of its software at all. And a highly aggressive campaign right at the start ensured that it achieved this result within a year of entering. However, much to its surprise, the market for its software wasn't picking. The hard lesson learnt: had they permitted some piracy or turned a blind eye, cheaper copies at training institutes etc would have increased familiarity with software and helped with its uptake.” For an example of how serious SAP was see this news report from 1999
Lawrence adds to the “spice” by suggesting that the piracy debate is multifaceted; it should not be viewed from the lens of profits and losses alone. According to him, a great deal of cultural diversity has been brought in by media piracy. In fact, in the article by Liang and Prabhala discussed above, the very same argument is made:
“Instead of seeing the copyright industries and the informal economy as two airtight categories, observations on the ground inform us that there is seepage, and the relationship is complex and mutually dependent, with the informal economy sometimes serving as a means to go where the traditional economy cannot. In other words, it is not just the consumer in the South who needs the informal economy: it is sometimes, also, the artist and the copyright industry. Peter Manuel recounts, in this interview with an executive from a maverick start-up music company in India, that piracy could also be a deliberate distribution and publicity strategy (Manuel 2001, 76):
…I tell you that back then, the big Ghazal singers would come to us and ask us to market pirate versions of their own cassettes, for their own publicity, since HMV wasn't really able to keep up with the demand…”
In other words, the high price to be paid (literally!) for avoiding piracy may itself be the cause for weak enforceability of the laws that ban piracy and the low enthusiasm amongst the public to support anti-piracy campaigns.
At a national level, there is an interest in bringing affordable education to a population that cannot afford to pay the price of books required to get a professional degree. While the government subsidizes education in a large number of professional colleges such as AIIMS and IIT, absent piracy, the books necessary to successfully obtain a degree from these institutions would be unaffordable. Are there any known instances of the government subsidizing such books for students in professional colleges?
This brings me back to the original questions – (1) do we as individuals want to contribute to the fight against piracy? If yes, (2) what are the practical ways in which we can do this? I should however modify these questions in the light of the rather engaging discussions and comments of our readers: Given the suggestion that in certain ways, piracy seems to have become a “necessary evil,” what steps can be taken to minimize its “evils,” and yet ensure that its “necessary” (good) effects on culture, economics and education are retained?