‘Good’ Pirates Help Companies Sell More Products
Written by enigmax on March 24, 2008If you are downloading stuff you wouldn’t have bought in the first place, according to economist Karen Croxson, you are probably doing the company that created the product a big favor. You, Mr ‘Good’ Pirate, are telling your friends, adding to the media ‘buzz’ and driving up sales.
Imagine a situation in the future where Internet pirates are accepted - maybe even recruited - to replace expensive marketing and consumer awareness teams when bringing a product to market. Imagine the reward for the pirate was a free copy of the software/media he agrees to promote. According to an economist, it could be happening right now.
In her talk at the Annual Conference of the Royal Economic Society, Oxford economist Karen Croxson says that when people copy software, music and movies, it may actually help the producer.
“Digital piracy has been claimed to endanger whole industries” said Ms Croxson. “A natural question to ask is: Why do some companies develop water-tight technology to safeguard their intellectual property when others appear more relaxed about copying?”
Many pirates say that they would never have bought much of the stuff they downloaded or copied. If you fall into this category, you might be a ‘good’ or ‘promotional’ pirate. Croxson says that piracy is only a threat to sales when people who originally intended to buy, didn’t, and pirated instead. The others - of which there a many, many millions - never intended to buy and these, says Croxson, cannot possibly harm the seller.
Far from the “all pirates are evil” cry, these pirates tell their friends, and they tell their friends and so the priceless product ‘buzz’ is generated. This consumer ‘buzz’ is difficult to put a price on, but needless to say it’s very valuable indeed. Even if companies ‘paid’ a pirate with a free copy of their product in exchange for him spreading the word about the product, it’s still a fantastic deal - especially if these ‘promotional’ pirates weren’t going to buy the product in the first instance.
Also considered by Croxson are the reasons why people are tempted to copy something, which include value put on time, concerns about being caught and moral issues. Using these and other factors enables Croxson to discover piracy’s true threat to sales of a product and suggest the best responses.
Due to computer games being most popular in the youth market, they are heavily protected. Although young people place a lot of value on games, they have fewer fears when it comes to copying and have more time than most to do so. It’s suggested that this could be ‘bad’ piracy, in that these activities negatively affect sales, without the ‘promotional’ benefits.
On the other hand, business software companies put a lot less effort into anti-piracy measures. It’s suggested that people who use software in the course of their business place higher value on it, have less time to pirate and worry more about the legal aspects, so are less likely to pirate.
Croxson said: ‘With valuable users shying away from copying, the sellers in the business software market find themselves more naturally insulated against lost sales. Those more inclined to pirate, perhaps students, probably wouldn’t have bought the product anyway, so represent virtually free promotion. This helps explain why business software companies do not put as many resources into protection as computer games manufacturers.”
“Building a theoretical model of `promotional piracy’,” says Croxson, “it is possible to distinguish markets that are best advised to put considerable resource into safeguarding their products from others which may live quite comfortably with a higher incidence of digital piracy.”
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This is a Great article. Hope MAFIAA takes notice. I don’t agree with it may actually help the producer from the 2nd paragraph. It should read as it helps the producer(s)
Still, these sort of excellent articles are what make us return each and every day to ur site.
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If there’s stuff I want, I:
1) d/l it from a public tracker (if it’s available)
2) d/l it from a private tracker
3) if all of the above fails I just live w/o it (this happens very rarely though).
:-)
Yes, for example Correct piracy in India casued them to know abt gaming and now their is a shift slowly form piracy to orignal although games dont sell well here but consoles and GPUs are selling like hell this is the proof of future base of development.
Also I had complained abt few greymarketers of town to Sony (they mainly pirated PS2 so no MS), but instead they were offered to keep orignals and they keep origanls of PS3 which sell although less but sell and also this things goes for 360 its games are also selling atleast much better than Xbox 1, althought it has stronger channel on account of being hacked so it(360) sells more than former.
People will say that company are loosing but see another part if their was no piracy here their would have been no popularity in games here.
“This helps explain why business software companies do not put as many resources into protection as computer games manufacturers.”
Or is it the fact that any US company caught using pirated software will be choked with crippling penalties?
#36 - As far as Photoshop goes, I read somewhere that Adobe’s stand is that the average geek, sitting in his basement and putting fake boobs on Britney Spears’ pictures, aren’t enough of a problem to even worry about as they would never have bought the product, anyway. What Adobe is concerned about is the production houses that purchase 1 copy and install it on a hundred systems - that’s a ton of lost revenue, especially considering that the production houses are making money, themselves, off of the use of the product.
#40 - In a documentary on VH1, Lars Ulrich said, “I don’t care if people download our music, I just don’t want them to download it before the album even comes out”. Their complaint was that songs from St. Anger were available from p2p sources long before the album was ready - some of which were early, incomplete versions that, they felt, gave consumers a bad example of what their new music sounded like.
I went out and bought St.Anger when it first came out and was severely disappointed with it. I wish I had downloaded it, first, because I definitely wouldn’t have paid real money for it, had I known how bad the production was on it.
As far as “good pirates” vs “bad pirates” goes, I beleive we all fall into the grey area (somewhere in between). I do get stuff that I actually want but I also get stuff that I may not have paid any attention to (much less paid any money for) and have reccomended some things to people that they’d never heard of but ended up liking.
I agree whole heartedly on this topic, but the logic may be a bit flawed. Sure, people who wouldn’t buy the product anyway go and pirate.. but what if they couldn’t pirate? If they were of a younger group, would they save up their money for weeks, or even months to eventually buy it? I’d say the “good pirate” theory at least works with music, because it’s such a viral medium. When you play a good tune, everyone notices and they want to go get it themselves.. it doesn’t always work that way with movies/applications.
Let’s show these companies there is at least a difference between good and bad piracy.
The point made about a person illegally downloading software etc… probably wouldn’t have paid for it in the first place is a valid one. Creating a buzz about the product is also a valid one. But here’s the thing, it’s still illegal.
Just because they don’t want to pay for it and companies aren’t really missing out on revenue because of the theft doesn’t make it acceptable. Theft is theft no matter how you put a spin on it.
Whatever next? Car thief writes review of the last Ferrari they stole and sales rocket…thanks car thief please carry on.
Is this academic actually aware that certain record labels routinely leak promo copies via P2P? The RIAA is trying to stop file-sharing, but many of its members actively use it precisely to increase sales. It’s kind of ironic that the record labels send out free copies of promos, but expect the plebian consumers to pay for them.
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While I agree with with most of what you said, the amount of piracy is still losing some companies sales… though this is mainly in 3rd world countries and the fact of the matter is that this is because they don’t actually sell legal products there in the first place….
and about games, the main thing costing them sales is the fact that users are terrified that their game will INFECT their computer and break it… and that pirates get a SUPERIOR product to what the consumers get… the protections are causing most of the piracy in the video game market…
[quote comment="318443"]Whatever next? Car thief writes review of the last Ferrari they stole and sales rocket…thanks car thief please carry on.[/quote]
While your point probably has some validity in it, comparing intellectual property theft with physical theft is always sketchy. The software pirate who wouldn’t have paid literally costs the software company _nothing_, obviously the car thief deprived it’s owner of a $100+K car. Always a difference between theft and copying…
Doing PC tech work for small businesses and home users, I’ve recommended ALOT of software to customers that I haven’t paid for myself. I wish software companies had referral programs.
[quote comment="318443"]But here’s the thing, it’s still illegal.[/quote]
What’s your point? That people should obey a law no matter how silly it is, and no matter how victimless an instance of breaking that law is?
You’re a pitiful stooge.
[quote comment="318443"]
Theft is theft no matter how you put a spin on it.[/quote]
Correct. Theft is theft no matter how you spin it, so why don’t you fuck off and take your spin with you?
If I snap my fingers and instantly conjur up a 1:1 duplicate of your Ferrari, and then drive off in said duplicate, you’re going to have one Hell of a time trying to figure out how that qualifies as THEFT, especially when I would have never in my life bought a Ferrari anyway, whether or not I had the magicial power to duplicate one.
[quote comment="318443"]Theft is theft [/quote]
Undoubtedly. Only filesharing isn’t theft because the author still has the original of whatever is being distributed via FS.
Try and sue me for somehow making an identical copy of your Ferrari (while you still have your car and I’ve never even touched it). I wish you luck. :-)
Provided you do not encourage piracy, this is entirely true.
If you are the first of your “group of contacts/friends” to get your hands on a latest release game, just because someone told you it was cool ( and you wouldn’t have bought it anyway. ) You may end up telling your friends how cool it is.
If you didn’t intend on buying it in the first place, you may have never found out how ‘cool’ it was, and therefore that’s you not telling anyone else, and potentially lost sales for the company.
This in no way justifies the act of Piracy, however, it just points out the industries aren’t going into decline because of piracy, it’s rather a natural equilibrium.
If you’re going to annoy consumers with high-tech anti-piracy technologies ( which never work ) at least put the price down on the game to compensate. ( which contradicts the fact that the technology costs the company more. )
There’s a point where you look at a price, and you say well I could get 5 other not-so-hyped-up games for the same price, and simply being so expensive drives you to pirate it.
Games should start out cheaper, and reduce in price less. ( So the game doesn’t just sell when it becomes cheap. )
Pireacy Is Not That Much a Crime
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“Theft is theft”. True, but in relation to filesharing you fail to show why you label it so. You most likely use the specious argument that it deprives artists and retailers of sales. Since it has often been stated (yes without proof) that most who download wouldn’t have bought even if they couldn’t dl, then you have no leg to stand on, but are only a lying thieving hypocrite.
The bottom line as a student is pirate until I’m able to afford the product. If a company doesn’t have a continual release of updates that temporarily disables the product and if it is valuable even with similar alternatives, I feel loyal to that brand and when I have the ability to legally obtain a version of the software I will.
An addendum, I would be more likely to shell out for a product if that license included any future versions of that product. Also said, if I bought a product when it was new and they release a newer version, it feels less morally reprehensable to pirate the newer copy.
GG
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