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Companies Coming Around To Piracy's Upside? 259

Posted by timothy
from the why-people-hate-to-call-it-piracy dept.
traycerb writes "The Economist has an article detailing how numerous companies are finding piracy's silver lining: 'Statistics about the traffic on file-sharing networks can be useful. They can reveal, for example, the countries where a new singer is most popular, even before his album has been released there. Having initially been reluctant to be seen exploiting this information, record companies are now making use of it. This month BigChampagne, the main music-data analyser, is extending its monitoring service to pirated video, too.' The kicker is Microsoft's tacit endorsement of Windows piracy in developing markets, namely China. The big man himself, Bill Gates, says it best in an interview with Fortune last year: 'It's easier for our software to compete with Linux when there's piracy than when there's not.'"
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Companies Coming Around To Piracy's Upside?

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  • I'd be happy... (Score:5, Insightful)

    by tyler.willard (944724) on Sunday July 20, 2008 @02:38PM (#24264989)
    ...if such a mindset would only dispell the myth that a every pirated copy equates to one lost sale.
    • by Zerth (26112)

      What they really need to realize(and most of them do) is that everything I pirate changes sales by plus or minus 5 or more sales!

      If it is good, I buy it at least once, and so do several people after hearing me praise it.

      If it sucks, then not only do I not buy it, neither does anyone around me after I bitch about how bad it was.

      Obviously, then, companies that make really awesome&known&notveryexpensive or any kind of sucky products should hate pirating, and those companies that make unknown||cheap||bu

      • I'm afraid I can't agree on that basis.

        I certainly agree that word-of-mouth goodwill is important, as is the goodwill of "influential" users (such as yourself).

        But I am still of the opinion that people should pay for what the use. I only refuse to accept the hyperbole of "IP" vendors and their propagandists.

    • Re: (Score:3, Insightful)

      by Wildclaw (15718)

      Piracy will however cause lost profit compared to if piracy was impossible. However, just as you said not at a 1:1 ratio, and most likely far far far from it, as any extra money would mean less money spent on other goods. Also this doesn't imply that having strict copyright just to increase profits is a good thing.

      In fact, copyright reminds me somewhat about russian plan economy. Just like we could point and laugh at the inefficencies of plan economy, Non-capitalists can point and laugh at the inefficencies

      • Re: (Score:3, Insightful)

        by tyler.willard (944724)
        Piracy will however cause lost profit compared to if piracy was impossible.

        I, most emphatically, disagree. Let's take the classic example: Photoshop.

        I'd wager that nearly everyone who's above the age of 25 and has a computer has had a pirated copy of some version. Mainly, because they thought:

        "COOL! I want photoshop."

        They then launched it once, couldn't figure out what to use it for, and then forgot about it.
        In my opinion, there is no legitimate argument that can be made for the case that the a
        • by Wildclaw (15718)

          They then launched it once, couldn't figure out what to use it for, and then forgot about it.
          In my opinion, there is no legitimate argument that can be made for the case that the above situation cost Adobe any money whatsoever.

          So you claim that not a single Adobe Photoshop has ever been pirated on a system instead of being payed for? I never claimed that the loss would be big. I completly agree with the grandparents assesment of the 1:1 sale to piracy ratio being insane. And in cases like Adobe Photoshop the ratio is indeed very low. For some products it may even be zero, but that is the exception.

          Of course, the argument used by some overly enthuiastic pirates would be that piracy also stimulate sales. However, that is a strawman

          • So you claim that not a single Adobe Photoshop has ever been pirated on a system instead of being payed for?

            No. I don't even know how that could be inferred from what I wrote.

            I never claimed that the loss would be big. I completly agree with the grandparents assesment of the 1:1 sale to piracy ratio being insane.

            For the record, I am the GP.

            Of course, the argument used by some overly enthuiastic pirates would be that piracy also stimulate sales. However, that is a strawman argument.

            I don't di
  • The kicker is Microsoft's tacit endorsement of Windows piracy in developing markets, namely China. The big man himself, Bill Gates, says it best in an interview with Fortune last year: 'It's easier for our software to compete with Linux when there's piracy than when there's not.'

    I keep telling people that when they pirate Windows or Office they're not taking a poke at Microsoft, they're taking a poke at potential competitors for Microsoft. This isn't news, this is not something Bill Gates just realized, Microsoft USED this when Office was getting established, in all kinds of ways, even allowing business users to use the same licensed software at home, rather than using something else because they couldn't get a second license through their office.

    • Mod parent up. (Score:5, Interesting)

      by khasim (1285) <brandioch.conner@gmail.com> on Sunday July 20, 2008 @02:53PM (#24265105)

      Not just MS Office.

      Back when it was WinNT vs NetWare, Microsoft was happy to allow "piracy" because Novell servers automatically checked licensing and would shut down if you tried to use the same license twice.

      • Pre-2000, most MS software could be activated with the universal 1234 1234567 key - I mean, did they have President Skroob on the board or something?

        They weren't alone either, Macromedia's entire business model was predicated on piracy. Dreamweaver became the de facto HTML editor, Flash become popular quickly and Fireworks bit out a chunk of Photoshops then-market all because the majority of candidates for web jobs had experience in them, because they were easily to get your mitts on.

        Just as home taping nev

        • "That sounds like the number from some idiots luggage! And someone change the combo on my luggage!"

          BTW, 1111-1111111 also works equally well.

    • by Shados (741919) on Sunday July 20, 2008 @02:54PM (#24265121)

      Correct. They didn't start offering low cost MS Office editions (Home and Student, 3 licenses for 150$ as long as you're not using it commercially) until people started looking at alternatives (Linux, Mac OSX, etc), -not- when people started pirating (since years and years before that).

    • Re: (Score:2, Informative)

      by Anonymous Coward

      Yeah, even the fact that Gates said it in an interview is (10 year) old news [cnet.com]:

      "Although about 3 million computers get sold every year in China, but people don't pay for the software," he said. "Someday they will, though. As long as they are going to steal it, we want them to steal ours. They'll get sort of addicted, and then we'll somehow figure out how to collect sometime in the next decade."

    • by bri2000 (931484) on Sunday July 20, 2008 @04:31PM (#24265843)
      They still do this through the Home Use Program which is so cheap it may as well be free. I got a legitimate copy of Office Enterprise 2007 under this for £17.99 including P&P.
  • by plasticsquirrel (637166) on Sunday July 20, 2008 @02:43PM (#24265021)
    This is the reason that Slashdotters who support Linux shouldn't be fixing every Windows PC around and giving others pirated software. So many people think they're sticking it to the man by using pirated proprietary software, but it only increases the user base of it.

    Microsoft is happy to let the Chinese pirate everything, because it locks them in and increases their user base. Without it, alternatives like Red Flag Linux might actually have a few users.
    • by maz2331 (1104901) on Sunday July 20, 2008 @02:51PM (#24265099)

      ...and I'll help people with whatever they have and want to run. Linux, Windows, whatever, so long as they are willing to pay the service rate.

      The one thing I will NOT do is install or provide any assistance or other service with pirated software or any illegal activities. Non-negotiable, it ain't happening.

      • by McGiraf (196030)

        "The one thing I will NOT do is install or provide any assistance or other service with pirated software or any illegal activities. Non-negotiable, it ain't happening."

        Amen.

      • Re: (Score:3, Interesting)

        Yes, but *my* service rate is higher for MS products, and I explain its because Windows is such a bitch to admin. And it is.
      • ...and I'll help people with whatever they have and want to run. Linux, Windows, whatever, so long as they are willing to pay the service rate.

        As long as we're namecalling, that's prostitution. But let's not.

        What I think GP was talking about is people "fixing" computers for friends/family members by installing pirated copies of XP (replacing 98, say) -- in fact, since I don't work in computer repair, if I can't answer your question in a minute or two, I'll give the standard "switch to Linux" line -- not because Linux is so much better, but because I would actually know what to do if they needed help.

    • by feedayeen (1322473) on Sunday July 20, 2008 @02:54PM (#24265115)

      This is the reason that Slashdotters who support Linux shouldn't be fixing every Windows PC around and giving others pirated software. So many people think they're sticking it to the man by using pirated proprietary software, but it only increases the user base of it. Microsoft is happy to let the Chinese pirate everything, because it locks them in and increases their user base. Without it, alternatives like Red Flag Linux might actually have a few users.

      The majority of people donâ(TM)t care whether a program is proprietary or open source because the majority of people will never modify their operating system. A free launch is a free launch regardless of packaging and I have no doubt that most of the people who have Linux computers use it because it is free, just as most of the people who use Windows use it because it came with their system. The only difference between the two people is that one person knew how to install an operating system and/or build a computer and the other guy didnâ(TM)t.

      • Most people won't care if their car uses gasoline or solar energy because most people won't be fixing their engines when they break. Heh. Lots of people *do* care. If its Free Software, then many painful headaches go away in terms of licenses paid for but whose activation is problematic. (Wolfram, Microsoft, and Paradigm, you three should be listening.) The straw man fallacy that one needs to be a programmer to care about Free Software is getting old.
    • Re: (Score:3, Insightful)

      by HalAtWork (926717)

      I don't install Windows products and especially not pirated software because of how much of a pain it is to support, not because I want to push a certain agenda.

      For pirated software you would have to make sure any update mechanism is shut off, and that causes security headaches if the updates patch holes. The user will also want to install a new version if they come across it and notice they have an older version, which will probably not work with the crack used to cause the program to activate/val

  • by Aphoxema (1088507) on Sunday July 20, 2008 @02:59PM (#24265173) Homepage Journal

    That article reads like a young adult suddenly realizing how the world really works, but still stuck in the idea that everything they learned before must still be true.

    • Re:Old news for most (Score:5, Interesting)

      by traycerb (728174) on Sunday July 20, 2008 @03:18PM (#24265315)

      That article reads like a young adult suddenly realizing how the world really works, but still stuck in the idea that everything they learned before must still be true.

      [disclaimer: i'm the submitter]

      definitely true, and to be expected from The Economist; like the WSJ and FT, it's just always going to have a rah-rah business attitude.

      still, i think this is good insight into the big businesses' mindsets, and these are encouraging first signs of cracks in the old thinking, and maybe even a sneak preview of how things may change.

  • by mark99 (459508) on Sunday July 20, 2008 @03:01PM (#24265201) Journal

    For example MS, note that it was only with XP that they even tried to introduce some anti-piracy, and it is decidedly half-assed and low priority.

    Good software companies have managed to have it both ways since the 80's and benefit from piracy and cracks spreading their best efforts, while making lots of noises about how bad it is so that those with money will be inclined to purchase it rather than take the risk. To my knowledge they only prosecute big black market dealers who are probably interfering with their attempts to set up profitable distribution channels.

    I am sure they have numerical models in Redmond telling them exactly how much piracy vs. prosecution will maximize their profit in the various markets.

    Only idiots like the RIAA are stupid enough to actually sue and thus alienate their basis directly and for all time.

    • Re: (Score:3, Insightful)

      For example MS, note that it was only with XP that they even tried to introduce some anti-piracy, and it is decidedly half-assed and low priority.

      I don't know about 3.1, but 98 at least did include anti-piracy. It was called a Product Key.

      In fact, the new anti-piracy features in XP caused a bit of a shitstorm (read: storm in a teacup), wherein many people refused to upgrade. Things like having to call Microsoft just because you bought a new hard drive -- that's ludicrous, when you really think about it. It's just that copy protection has gotten so bad that we accept these things as a matter of course, now.

  • by atari2600 (545988) on Sunday July 20, 2008 @03:23PM (#24265347)

    When it comes to individuals pirating their software (their OS, Office, Visual Studio), Microsoft actually would prefer those people pirate their software instead of using alternatives. This is also the same reason they offer Windows, Office and Visual Studio at student discounts for well, students.

    Microsoft would rather have young programmers pirate their Visual Studio and get used to developing in that environment rather than let's say Ubuntu + gvim + gcc. Also there is a chance that the average Joe who's on a pirated WxP copy will go out to BestBuy and buy Vista before calling in the slashdot cousin to upgrade his OS - which the average Joe wouldn't do if he was running Fedora. (This paragraph is directly from a Manager at Microsoft's Active Directory Services team - everything except for the /. cousin).

    As someone else here has noted, MS only cares about piracy when businesses do it or large scale piracy happens (someone's making money from it). I get my genuine copies of Microsoft Software from their employee store (buddies of mine work at MS) at really cheap prices (35$ for XP Pro, Windows games at 10-20$, Xbox 360 games at 15-25$) but I know it costs next to nothing for MS to print out those copies - even 25$ == profit.

    • Re: (Score:3, Insightful)

      by Shados (741919)

      You're quite correct about Visual Studio. Many aren't aware of that, but technically speaking, Microsoft -wants- to give all editions of Visual Studio away. They're not really profit makers to begin with, but only an indirect feature of Windows. But if they don't charge for VS, then all of the third party tools will die out (there already aren't that many for Windows development, compared to Java or Linux development), and that would hurt em in the end.

      The worse bit of piracy is when people print a shiny wi

      • But if they don't charge for VS, then all of the third party tools will die out

        I somehow doubt that. Look at Apple -- Xcode is free, but people still pay for third-party tools. They just have to be a lot better than Xcode at something.

        But what is that saving them from, really? How would killing third-party developer tools hurt MS?

        • by Shados (741919)

          Killing third party developer tools hurt Windows developers. Hurting Windows developers hurts Windows.

          Actually, many tools superior to Visual Studio died in its history. Making a Visual Studio competitor and selling it at the price Visual Studio is being sold will not be profitable. (thats regardless of how good someone actually feel Visual Studio is: the point is that a lot of devs expect its features, and coding something with similar features is hardcore).

          You can look at tools like Eclipse, which are eas

  • i bet many of those who were p2ping for the last 5-10 years have thought that. its SO evident that you'd be stupid not to see. the popularity of a game gives out how well it is doing for example. direct correlation. release a game one day, and if you monitor how widely game is pirated you'll know that how well your game is going to sell. and this happens half a day after release, even before, and doesnt cost a dime. to get such sales forecast reports in real life you have to spend huge money. with piracy, i
  • by DaFork (608023) on Sunday July 20, 2008 @04:08PM (#24265669)
    Nine Inch Nails gave out their new album (The Slip) for free and used the geographic data from the torrent downloads to plan their tour schedule.
    • Which is exactly what we should be seeing more of! The artists make more money via more successful tours, the listeners are happier because they get what they want without having to pay (perhaps using that 18 bucks toward the $35 concert ticket?), and a brilliant file transfer system gets promoted in the light it deserves.

      The only ones left in the dust are the RIAA-types, whom I, for one, shall be saying prayers for tonight. *psyche*

  • ... when someone asked:

    "Did you correct for how the varying standards of each country's anti-piracy measures affected the numbers?"

    "That correction... was redundant"

  • Statistics about the traffic on file-sharing networks can be useful. They can reveal, for example, the countries where a new singer is most popular, even before his album has been released there.

    At first I wondered why people would buy an album they've downloaded from the Internet, then I thought about all of the songs I used to hear on the radio before the album was in stores & it made more sense.

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