Althouse: "If you are building a business model that says that people can only copy things with your permission..."

May 24, 2010

"If you are building a business model that says that people can only copy things with your permission..."

"... your business is going to fail because whether or not you like it, people will be able to copy your product without your permission. The question is: what are you going to do about that? Are you going call them thieves or are you going to find a way to make money from them?"

26 comments:

Anonymous said...: Is there a link here?

I agree with this wholeheartedly. The music industry is a perfect example. As is the DVD industry. The gaming industry.

The solution here is to either find a way to be profitable at a price people are willing to pay or add value to the product you sell so that people will buy the product instead of taking a free copy that is merely the thing itself.; 5/24/10, 7:23 PM
I'm Full of Soup said...: How about Microsoft? They are fairly successful. Not that I know anyone who has ever copied their software without paying. Heh.; 5/24/10, 7:30 PM
Anonymous said...: Microsoft is a great example of a company that provides added value by paying for the product.

Most people don't steal things if the price is fair for the thing relative to them.; 5/24/10, 7:31 PM
Revenant said...: The music industry is a perfect example. As is the DVD industry. The gaming industry.

In the case of the gaming industry, things are shifting towards service and subscription models. It doesn't do you much good to pirate a copy of World of Warcraft.; 5/24/10, 7:39 PM
MayBee said...: How does the new "pay what you'd like" Panera Bread restaurant fit with this idea.
There's a very similar underlying concept, is there not?; 5/24/10, 7:40 PM
Bob Ellison said...: Like Seven Machos, I wonder where the quote came from.

Speaking as a software industry person, I have to say that the quote is a little naive. Consider the many, various forms of video games, especially those with proprietary cartridge formats, like the Sony PSP. Cost to pirate is prohibitive. That may not be so forever, but it is now, and the companies that market the stuff will always find more ways to combat piracy.

Besides, as AJ Lynch and SM said, Microsoft and plenty of other software companies make plenty of money selling easily pirated stuff...and they, too, have their methods.

My contention is somewhat opposite that of the author of the quote: if you build a society that does not respect intellectual property, your society will not necessarily fail, but it will always lag behind those societies that do respect IP. This is my warning to China, Russia, all of South America, and many of the countries in Europe.; 5/24/10, 7:42 PM
Jason (the commenter) said...: Bob Ellison: My contention is somewhat opposite that of the author of the quote: if you build a society that does not respect intellectual property, your society will not necessarily fail, but it will always lag behind those societies that do respect IP.

Maybe if we were a country where copyright lasted ten to twenty years, but we live in one where it lasts 70+ years. Any dynamic country that dropped that number substantially would blow us away culturally.; 5/24/10, 8:10 PM
Rialby said...: Wild - hadn't heard about that Panera concept until you mentioned it. Should be a fast fail. I give it 90 days or less.

From the Dallas Morning News article, "Similar experiments have worked elsewhere. The One World Salt Lake City restaurant has operated as a nonprofit with pay-what-you-want prices since 2003, said founder Denise Cerreta.

"It somehow stays in balance," Cerreta said. "I think ultimately people are good. They want to contribute.""

Hmm.. why would it succeed in Salt Lake City? That's a topic Liberals probably don't want to touch.; 5/24/10, 8:24 PM
Largo said...: My Google-Fu is good today.; 5/24/10, 8:32 PM
bagoh20 said...: You can both call them thieves and make money off of them, because they are until they pay you. You can get them to that point by enticing or threatening, but both can work.; 5/24/10, 8:45 PM
Ann Althouse said...: Sorry about the missing link. Fixed.; 5/24/10, 8:57 PM
Ann Althouse said...: Thanks, Largo.

It really is easy to Google the quote when this kind of thing happens, but I know it's my job not to let it happen.

Again, I apologize.; 5/24/10, 8:58 PM
KLDAVIS said...: This comment has been removed by the author.; 5/24/10, 9:04 PM
KLDAVIS said...: A few weeks ago I was reading (some French or Belgian daily...not sure where I was at the time) that DVD piracy is such a big problem in Spain that one movie-house has decided to stop selling their movies there...the headline stopped me dead. Whoever is running that studio deserves to be fired on the spot. The idea that not selling your DVDs in a country would in any way reduce piracy is idiotic on its face and would only be espoused by someone completely out of touch with modern technology. All they would accomplish is having fewer customers when they inevitably return to that market.; 5/24/10, 9:04 PM
bagoh20 said...: "Again, I apologize."

Too bad. You're fired! From now on I'll come here and read without paying you. No severance pay either. Now get out of my office.; 5/24/10, 9:21 PM
Revenant said...: The idea that not selling your DVDs in a country would in any way reduce piracy is idiotic on its face and would only be espoused by someone completely out of touch with modern technology.

Not necessarily. Currently you have the pirates (who benefit from piracy), the normal folks (who aren't affected at all), and the studios (who get hurt by piracy). Refusing to market films in the country until piracy is reigned in means that the "normal folks" group is now being hurt by piracy. They can respond by (a) becoming pirates themselves, (b) by doing without the movies, or (c) by supporting crackdowns on piracy.

In the long run, the studio's business is doomed unless (c) happens. So even if (c) is unlikely to be the end result of this, if this stunt is their best bet for achieving (c) they've got no choice but to hope it works.; 5/25/10, 12:26 AM
Anonymous said...: Studios are only doomed if they insist on keeping their 1970s-era business model replete with layers of management and spending so lavishly on product, all the while insisting on setting prices too high and hoping that governments will protect their investment and bureaucracy.; 5/25/10, 12:38 AM
Bob Ellison said...: Revenant said: "Currently you have the pirates (who benefit from piracy), the normal folks (who aren't affected at all), and the studios (who get hurt by piracy)."

The studios aren't hurt by piracy. What harm befalls them if some distant person does something the studio doesn't even know about?

This fallacy ("piracy hurts me!") is responsible for the most foolish policies of content-owners. Many anti-piracy measures (inability to copy or backup content, for example) hurt legitimate customers far more than they inhibit pirates, for example.

No, content owners must forget that fallacy. Piracy exists, and some cultures seem quite dedicated to it. I have no problem with denying a given culture a product because it fails to minimally protect IP. But for the most part, all content owners should focus on their paying customers and make sure their efforts to combat piracy, if any, are both effective and not unjustly irritating to the good folks.

Jason, I agree re: length of copyright. The current American regime is ridiculous.; 5/25/10, 6:33 AM
Anonymous said...: Maybe if we were a country where copyright lasted ten to twenty years, but we live in one where it lasts 70+ years.

So if you wrote a book that sold well for 100 years, you would rather strangers profit from it than your own heirs?; 5/25/10, 7:45 AM
Anonymous said...: I can't find information on how much Cory Doctorow (the speaker of the quotation) made from his sale of Opencola to Open Text, but people who sell software companies usually aren't poor. I wonder if he would be so willing to give away his writing if he weren't (probably) independently wealthy.; 5/25/10, 7:55 AM
themightypuck said...: The USA did pretty well in the IP stealing sweepstakes in the early years.; 5/25/10, 8:19 AM
Anonymous said...: I have to agree with Jason on copyright. Let's go back to the standards of, say, 10 years ago. I sometimes wonder what an academic author can be thinking when he/she refuses to let instructors photocopy an essay in an arcane academic journal for classroom use. Or give a student a 20-page royalty contract to sign so the kid can use an image in a thesis.

Obviously, they must prefer obscurity to piracy-–but why?; 5/25/10, 9:57 AM
Anonymous said...: There's an interesting related issue in MMOs: if you think you can prevent players from trading goods and services and establishing their own market for doing so, you're delusional. Your choices are to be eternally battling "gold farming" and shutting down "illegitimate" accounts (World of Warcraft) or to make your money the old-fashioned way, i.e. by arbitrage (Second Life). Choose wisely.; 5/25/10, 10:52 AM
jimspice said...: Make weigh for uber product placement for anything you can't hold in your hand, including talent.; 5/25/10, 11:12 AM
Unknown said...: I'm sure J.K. Rowling would agree completely. She hasn't made a dime off Harry Potter.; 5/25/10, 12:59 PM
Zach said...: A whole lot of people make their living in the space between "whether you like it" and "not."; 5/25/10, 1:01 PM