Even though I’m tempted, I won’t mention either the game Pirates! or Pirates of the Caribbean. Instead, I’ve pondered a bit about software and media piracy. Everyone in the debate seems to focus on the price, and I simply cannot agree that this is the most important issue.

The most common view – both from consumers and publishers – seems to be that a lower price would lure more people into buying original copies instead of download pirated material. A thread on Edge’s forums even starts off with suggesting that piracy is a good thing, since it regulates prices and puts dampeners on the market. So to speak. Of course it trails off later, but one of the things they bring up is something I feel strongly about: the cost compared to the value of the purchased material.

Before I go into that, I’ll make a few layman observations:

1. Adam Smith formulated the theory that (as I understand it) in a market with specific regulating factors, for example demand and price and a bunch of others, a company should always be greedy - make choices that lead to profit for itself.
2. Mathematicians in the 50s proved Adam Smith’s theories to be correct, assuming that the regulating factors exist.
3. In the movie A Beautiful Mind we are shown a John Nash who expresses that Adam Smith is wrong, and that companies would benefit from co-operation and compromise.
4. Hollywood is full of stupid pricks who oughtn’t be let near scientific theories. John Nash formulated theories that concern cases where the market isn’t regulated in the same way, and his theories can co-exist with those of Adam Smith.

Anyway, there really is a point to this ranting: big companies seem too focused on price - on one of the common regulating factors. They ought to look at things in a wider scale. I’ll sum up some points that I believe are valid:

• Downloads are cheap
• Downloads are, in general, faster than purchasing online
• Downloads are easier than purchasing a physical product
• Downloads often provide a better product: music in a portable format, games with patches already applied, and so on

Wow, things are looking bleak. But on the other hand:

• Purchased DVDs have extra material
• Purchased games have instruction booklets, manuals, and so on
• Purchased CDs often come with a booklet containing information
• Purchased goods are often physical – you own the media and not just the data

I guess you see where this is going? I’m skipping obvious points, such that purchased goods are legal and that downloading material demands technical knowledge. The main difference, as I see it, is that the legal choices often bring an added value. That is where the main focus ought to lie: don’t lower the price, since that will lead to lower-quality products that try to compete with practically free ones. The market isn’t regulated by that variable alone anymore.

However: as I understand it, lower-quality music at a low price actually seems to be working for some companies. This could either mean that people are law-abiding and will buy their wares if they can, or that this success is a minimal one compared to the potential profit. Or, quite likely, most people disagree with me and don’t care at all for added value.

Either way: Heroes of Might and Magic V has awesome extras, and I definitely must have the collector’s edition. My theory works for me at least!

This entry was posted on Monday, May 29th, 2006 at 11:42 am and is filed under Observations. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.