Message-ID: <326@hou2a.UUCP>
Date: Fri, 13-Apr-84 17:31:35 EST
Article-I.D.: hou2a.326
Posted: Fri Apr 13 17:31:35 1984
Date-Received: Sun, 15-Apr-84 01:27:48 EST
Organization: AT&T Bell Labs, Holmdel NJ
Lines: 99


The Software Piracy problem is basically a marketing problem.
It is caused by the  interplay of various factors such as:
price of the product, market size of the product, product appeal,
market audience profile and alternative available source.

Market audience is the set of people who are interested in the product.
These people can be rich or poor, high self-esteem or low self-esteem
(e.g., like to borrow tools from the neighbor),
ethical or unethical, aware or unaware of alternative source of this
product at a lower price, ...etc.
However, each person posseses a certain level of each characteristics.
The aggregate of these characteristics within a market audience
makes up the market profile.

Without considering the cost, the price of a product can influence and
is usually influenced by the market size, market profile and the
alternative available source.

Take the computer software product.
The price is very high (relative to other software such as music,
video).  The market is therefore small.  However, if we lower the price of
the software product, the question becomes, will the market size grow
enough so that the resulting aggregate revenue is more.  It may not
because there may not have enough machines to run the software.
In other words, how big is the "potential market size."

The potential market size of a product is usually measured by
marketing research.  But in software case, the answer is availalble.
The potential size is very big.  In fact, Ashton-Tate president David Cole
in defending the establishment of a Software Protection Fund claimed
that there are two to ten times more unauthorized disks than
authorized disks in use.
The potential size is bigger than the combined number of authorized and
unauthorize disks usages because there are people appealed to the
software product but didn't make unauthorized usage.

The next question is why within the market audience, there are
people who will make unauthorized copy of disks while there are
people who will not.
This be explained by two facts.
First, there are available alternative sources of the product (which
is copying, rather than clones).
Second, AT CURRENT PRICE LEVEL, the market profile is such that the
majority (ref. Cole's claim) of the market audience appealed to the
software products are "less" ethical, "less" willing to pay stiff
price, "more" aware of the alternative available source, "strongly"
attracted to the product, ...etc. and therefore, resort to copy-right
violations.  At current price level, the "prize", which is the price
of the product minus the costs (tangible and intangible, e.g.
feeling guilty) of unauthorized copying is high as perceived by the
majority of the market audience.

The interplay of the price of product, prize of obtaining the
product from alternate source and personal profile is
just like the $20 bill on the ground example.
The $20 bill is a product. Its price is $20.
The normal way to "buy" $20 is to earn it (the old fashion way.:-)
When it is sitting on the ground, it is your alternate source.
Depending on your profile (i.e., income, ethical value, awareness of
the $20 bill, ...etc.) you may not pick up and keep the $20.
But what if it's a stack of bills worth $200? $2000? $2 million?
At what "price level" will the "prize" more than your "value"?
With respect to economic activities,
people act to maximize their gains.
The "gain" is a total gain of both tangibles (e.g. $2 Million ) and
intangible (e.g., guilt, violation of own ethical value.)

Hence, as the price of software product comes down, lowered relative
to the "ethical value", willing to pay "value", ...etc., more people
will shift from the copy crowd to the non-copy crowd within the
market audience.  Furthermore, others in the market audience 
with high "value" system will enter the market thus increasing the
market size.
The solution to the software piracy problem is therefore to
determine the "right" pricing so that
ideally, the non-copy crowd is so much bigger than the copy-crowd so
that the effect of the copy-crowd activities is negligible like the
phono-record industry.

Again, the right pricing is influenced by the "quality" of your
product market profile!  I think the software industry should spend
money to study the market profile and determine the right pricing.

But who knows?  Perhaps, the software industry already found out that
the software product market audience is such a bunch of crooks that
the software products have to be priced at around $9.99 in order
to move significant number of "copiers" to the non-copy crowd.
If that is true, then I think
the legal actions against the offenders are justified.
Instead of lowering the price of product, the software inducstry is
increasing the cost of alternative source, thus decreasing the value
of the "prize" to a level that there are less
"copiers".  Whether this will increase the number of "non-copiers" is
questionable.


					S. Kho
					hou2a!kho

Message-ID: <3072@fortune.UUCP>
Date: Mon, 16-Apr-84 14:58:00 EST
Article-I.D.: fortune.3072
Posted: Mon Apr 16 14:58:00 1984
Date-Received: Tue, 17-Apr-84 07:50:42 EST
References: <326@hou2a.UUCP>, <441@dual.UUCP>
Organization: Fortune Systems, Redwood City, CA
Lines: 10

This has become quite an extensive conversation, ranging from morals and
ethics to practicality of protection and theft.

Sounds to me like an opportunity to make some money.  Since all of the
postings went out on a "broadcast" network (and are thus available for
the "appropriating"), I think I'll collect 'em into a package and sell
the whole thing to a publisher.

The title "The Hacker Papers" sounds nice, but it's already been done.

Message-ID: <441@dual.UUCP>
Date: Mon, 16-Apr-84 11:33:08 EST
Article-I.D.: dual.441
Posted: Mon Apr 16 11:33:08 1984
Date-Received: Tue, 17-Apr-84 08:15:57 EST
References: <326@hou2a.UUCP>
Organization: Dual Systems, Berkeley, CA
Lines: 51

> From: kho@hou2a.UUCP (S.KHO)
> Newsgroups: net.micro
> Subject: Software Piracy - Marketing Persipective
> 
Message-ID: <326@hou2a.UUCP>
> Date: Fri, 13-Apr-84 14:31:35 PST
> Organization: AT&T Bell Labs, Holmdel NJ

> The interplay of the price of product, prize of obtaining the
> product from alternate source and personal profile is
> just like the $20 bill on the ground example.
> The $20 bill is a product. Its price is $20.
> The normal way to "buy" $20 is to earn it (the old fashion way.:-)
> When it is sitting on the ground, it is your alternate source.
> Depending on your profile (i.e., income, ethical value, awareness of
> the $20 bill, ...etc.) you may not pick up and keep the $20.
> But what if it's a stack of bills worth $200? $2000? $2 million?
> At what "price level" will the "prize" more than your "value"?

This reminds me of a joke I once saw in a turn-of-the century Swedish
magazine passed down through a couple of generations of my family.
It was originally designed to be read with a heavy (fake) Jewish/German
accent. Translated, it comes out something like:

  So, my son, if you find a pfenning on the ground, you may keep it.
  If, however, you find a thousand marks on the ground, you should turn
  it in to the police, for then you will receive a good name, and a good
  name is a man's fortune. If you were to find a million, you need not
  turn it in to the police, for then you would already have a fortune, 
  and thus have no need for a good name.

Seriously, despite the possible non-relevance of the pile-of-money,
I though this article provided an excellent perspective on the topic,
and thanks for posting it.

I still feel that there is a parallel between books and software. True,
the author of the book is not called upon to do support AFTER the book
is published. Just ask the author of a text how much time he spent
between the time he `finished' writing the book and the time it finally
appeared on the bookshelves. Ture, software is not as static as a book,
but if a good product were properly prepared through the aid of a good
software publishing house, the amount of post-publication support
on the part of the author would also be minimal. I am not saying that
this will happen in more than a few cases, but the parallel still exists.
Most software products make it out before they are really complete,
i.e., there is something there (product OR documentation) that someone
had not thought of. The game packages are probably the closest to
products that don't need post-sales support.

	    Mats Wichmann
	    Dual Systems Corp.
	    ...{ucbvax,amd70,ihnp4,cbosgd,decwrl,fortune}!dual!mats
  

		
		
		
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Message-ID: <719@ihuxx.UUCP>
Date: Wed, 18-Apr-84 21:06:23 EST
Article-I.D.: ihuxx.719
Posted: Wed Apr 18 21:06:23 1984
Date-Received: Thu, 19-Apr-84 04:04:31 EST
References: <326@hou2a.UUCP>, <441@dual.UUCP> <3072@fortune.UUCP>
Organization: AT&T Bell Labs, Naperville, IL
Lines: 20

"collect all the articles into a book and sell them..."

Not too funny; I seriously thought about collecting all of the recipes
from net.cooks for a year, cleaning them up, writing an explanation,
and publishing--net addresses and all.  I figure the novelty alone
would sell enough copies to pay publishing costs and profit...but
wait!  A lot of those recipes are *copied* from extant cook books, and
only some are acknowledged; I'd have to certainly contact the
publishers of those (as the original submitters had not).  And, truly,
is the net public domain, so that I wouldn't have to get permission
from everyone I could contact to publish their recipe?  How about
names--do I credit them, or is publishing their name (and net address)
going to get me into trouble??

I've got all the recipes.  I decided not to do it.  Call me lazy, call
me coward...

				Dave Ihnat
				ihuxx!ignatz

Message-ID: <2324@ecsvax.UUCP>
Date: Wed, 18-Apr-84 10:16:20 EST
Article-I.D.: ecsvax.2324
Posted: Wed Apr 18 10:16:20 1984
Date-Received: Fri, 20-Apr-84 00:28:45 EST
References: hou2a.326
Lines: 20

It seems to me that there is a big difference between copying software and
copying records, from a marketing perspective.  A copy of a record is not
likely to be copied itself, because the quality degrades rapidly.  Therefore
the number of copies of a record is effectively limited by the number of
tapes the record owner is likely to make (or let his or her friends make).
It also takes time to tape a record, and this limits the number of copies.
In contrast, a copy of a program is every bit as copyable as the original, so
it is theoretically possible that only one original need ever enter the
marketplace.

Also, the advent of record-rental stores and the increase in music taping
has led to (according to the record industry) a recent serious drop-off in
revenues.  This is in addition to the commercial piracy problem.  What happens
if it becomes easy and cheap to photocopy books, by the way?  I've seen quite
a few students with photocopies of the D&D manuals, for instance, and I might
note that they cost a lot less than dBase II!

Ramblingly,
D Gary Grady, Duke University Computation Center
(ecsvax!dgary)

Message-ID: <1025@sdcrdcf.UUCP>
Date: Fri, 20-Apr-84 08:03:33 EST
Article-I.D.: sdcrdcf.1025
Posted: Fri Apr 20 08:03:33 1984
Date-Received: Mon, 23-Apr-84 00:54:26 EST
References: <326@hou2a.UUCP> <441@dual.UUCP>
Reply-To: barryg@sdcrdcf.UUCP (Barry Gold)
Organization: System Development Corporation, Santa Monica
Lines: 51


I am the author of two Fantasy Role Playing Games.  The first came to
about 130 pages printed; the second about 100 pages.
Each took about six months to write.  And another 18 months to rewrite,
based on data from playtesting.  (This probably corresponds to debugging.)

I am expected to provide post-publication support in the form of rules
clarifications for everyone who writes my publisher requesting such.

In addition, I edit/publish a small magazine.  And all subscribers expect
to be able to get post-publication rules clarifications/additions from me.
They also expect to be able to take my rules, change them to fit their own
gaming circle, and ask my opinion of the changes.

I love all this.

But whether or not I provided these services, I would expect that people
should not xerox my rules rather than paying for them.  I don't make that
much money a copy and neither does the publisher.  I get 10% of gross
purchase price of a game (and so does the publisher).  One game retails
for $18; the other for $12.  Stores buy at 50% retail price so I get 90 cents
for one game; 60 cents for the other.  Both of us wait for our money.
The publisher sends the games out and gets paid COD (often after they'e
sold).  I get paid 3-6 months after that.

So much for the facts.  Now on to the theory.

Copying material is NOT akin to taking loose money found in the street.
Such money is effectively abandoned unless there exists some method of
tracing the owner, because money does nmot have ID tags.  No one can prove
that's his five dollar bill (though they may well claim a wallet and its
contents).

Copying material is not akin to taking anything found in the street.
Written stuff is not lost/abandoned.  Its ownership is usually clearly
visible.

Copying material is akin to shoplifting.  You are stealing something that
belongs to someone else.  You are stealing it when you could legitimately
pay for it.  You are also (like a shoplifter) forcing others to pay a
higher price if the producer/retailer wish to make a fair profit but
don't get your money.

Lee Gold
Editor, Alarums and Excursions
Author, Land of the Rising Sun
	Lands of Adventure
-- 
	Barry Gold
	usenet:         {decvax!allegra|ihnp4}!sdcrdcf!ucla-s!lcc!barry
	Arpanet:        barry@BNL

Message-ID: <380@ucbvax.UUCP>
Date: Sun, 22-Apr-84 00:23:20 EST
Article-I.D.: ucbvax.380
Posted: Sun Apr 22 00:23:20 1984
Date-Received: Mon, 23-Apr-84 00:55:13 EST
References: <441@dual.UUCP>
Organization: U.C. Berkeley
Lines: 8

Mats at Dual makes an excellent point.  Software, when done properly,
does not need significant after sale support.  Granted, many programmers
later upgrade their software, but then many authors write sequels.
The book analogy is valid.

Scott

...!ucbvax!simpers

Message-ID: <400017@iuvax.UUCP>
Date: Mon, 23-Apr-84 23:19:00 EST
Article-I.D.: iuvax.400017
Posted: Mon Apr 23 23:19:00 1984
Date-Received: Wed, 25-Apr-84 00:31:21 EST
References: <326@hou2a.UUCP>
Lines: 12
Nf-ID: #R:hou2a:-32600:iuvax:400017:000:562
Nf-From: iuvax!Anonymous    Apr 23 23:19:00 1984


The "program update"/"author's sequel" analogy would be more accurate if it
were "revised edition" instead of "sequel". Revised editions contain new or
updated information, while sequels are usually entirely new, and stand on their
own merits as well as following up a previous work (sometimes).  Something
like "Wizardry II" is a sequel (though you must have Wizardry to play it),
but VisiCalc version 2 is a revised edition.
----
		"Fritz! They've killed Fritz!"
						-- Allan Pratt
					...ihnp4!inuxc!iuvax!apratt
				(please do not respond to iuvax!notes)