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Piracy of software, and why it helps software companies

14 February 2007 5 views 12 Comments

bit-torrent.jpgHow many of you guys reading this blog have actually purchased a copy of Photoshop, Illustrator, or Windows XP? Well, I own a legal copy of Windows XP Home Edition because my Toshiba laptop came with it, and the license price is included in my retail purchase. Other than that, honestly, how many people actually buy them?

With the pricing of the software, it’s more or less impossible for most freelance designers/developers (like me) to purchase the software. It’s too much of a burden, especially if you consider that they come up with a new version every 2 years or so, or even less. The Adobe Creative Suite 2 Premium bundle costs $1,199.00 US.

I recall something that Bill Gates said about the issue of piracy of Windows 98 a few years back. The piracy situation was pretty bad in South-East Asia (and the rest of the world) and he did not seem to mind. I can’t remember the exact quote, but it was something to the effect of “I don’t mind them using my software for free as long as they are using it. I understand they cannot afford the price, especially in this part of the world.”

Let me interpret that statement.

As Windows becomes more and more popular, and more wide-spread, it will create a monopoly in the OS world. If the general public all across the world is used to this platform, and file formats/computer instructions/expected skillsets are all accustomed to that of Microsoft Windows, I will be happy, because ultimately the sales will come. Large corporations will have to buy our software because of licensing regulations. We cannot track down all the individual users, but the companies and government agencies will have to buy them. There are other software that work well with Windows that we can make, and the rest of the software industry will code their work to our standards. Computer hardware will be manufactured to our standards. By letting the little ones go, the big one comes in later.

Essentially, the motive is this : if the general public (or in the case of Adobe software, the developers) is adapted well to a certain company’s software, their products are bound to sell eventually. That explains why they put the large price-stickers on. The larger companies will have to buy them because they can be more easily tracked down for abuse. Also for the sake of stability and guaranteed updates/support, the larger corporations with more on the line will purchase these licenses at the high price. Think about it – if the majority of young and upcoming designers/developers all used Adobe Photoshop and Illustrator, what else would the big design companies buy?

Now, you are probably asking the following questions :

  1. If that’s the case, why don’t they simply make their software free for the public but make sure business/government agencies purchase?

    The unattainable is more valuable. Nobody takes a 100% free software as serious as they would with a software that is available only through a crack, and takes a day to download through torrent files. Just because it has to be obtained illegally, it appears to be better. It’s simple psychology. If it’s free it’s not that great. If you have to steal it, it’s valuable.

    Also, do keep in mind that if these software companies wanted to make it more difficult to pirate their software, they could. They could have a method where the software has to do a live-query to a database on their server every time it runs, in order to validate an ownership. And they could have additional security measures where upon the automatic update, it screws up your software if the CD Key, activation key, and the owner’s name does not match. They do not go this far – they always make it tough enough to be taken seriously!

  2. Couldn’t they simply drop the prices of the software?

    Whether the Creative Suite is $1,199.00 or $399, the piracy rate will still remain the same. Let’s put it this way. Unless you are loaded with cash, would you turn from Bit Torrent to the Adobe online store if the price dropped to that price? No way. You’d still want to save the $399 and search the torrent database. And by dropping this price, they are reducing their potential revenue to be had from businesses/government agencies etc.

    Now, if they dropped the price to $50 or something ridiculous like that, many people would choose to purchase it for the convenience and security of it – IF they took it seriously. At $50 it is hard to appear to be the “industry standard for vector graphics” as Illustrator boasts to be. High price and a mild difficulty of obtaining it upholds the authority of the software as the standard.

So there it is. If you guys all thought Adobe is a sucker because you’re able to use $1,199 worth of their programs for free, think again. They’re not idiots – it’s carefully plotted out so they can secure the larger revenue!

So there. There’s a one of my many conspiracy theories… more to come!

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12 Comments »

Comment by Austin
2007-02-14 05:19:41

This is something I’ve dealt with for many years. I have found many legitimate competitors to the expensive (often pirated) software titles. I am building a list to make free software easy to find. Check out http://www.PirateRehab.com

Comment by Jeff Kee
2007-02-14 12:36:23

Wow that is a great site! and a great concept as well.

The greatest obstacle I see is how much value can be recognized by the public about free software.

let me tell you a true story :

A department store was selling umbrellas for dirt cheap on the 1st floor. They did not sell out as good as they thought. The manager decided to double the price and move it to the second floor. It sold out within days.

If people can get over that factor freeware can become more popular, but I don’t think that’s going to happen.. that’s simply the value system that is instilled in people of our society.

Comment by Paul Butler
2007-02-14 13:13:33

I read a similar story in the book “Freakonomics”. Part of this could also be the fact that companies like adobe have larger marketing budgets, so their products seem more prestigious. I use Xara X1 as an alternative to Illustrator and I love it. It cost me $30 to have a legitimate hard copy of the software shipped to my house. I’m sure illustrator has more advanced features, but nothing I need for my occasional use. I remember seeing a statistic that the average user only uses 10% or so of a piece of software.

Academic versions are also a good way to go for students like me. I just picked up a copy of Visual Studio for about $70 CDN, with the professional version starting at $300 US.

(Comments wont nest below this level)
Comment by Jeff Kee
2007-02-14 13:28:48

Even as I am involved in design/development, yeah, I never use all the features of a software. Although I am positive that I do know and use a lot more than most software users because I have the demand for high-end work and efficiency..

Freakonomics seems like a good book. I will pick up a copy of it soon!

 
Comment by Jeff Kee
2007-02-14 13:38:26

Oh, and I fixed the tab order issue. It was a problem in the plugin that allows the threaded comments. It did not index the tabindex attribute for the input button… so it would skip to the top.

If you ever get this plugin remember that – after the plugin is installed you need to go into comments.php under your template folder, and add the tabindex=”5″ and such to the form elements.

 
 
 
 
Comment by Leroy Brown Subscribed to comments via email
2007-02-14 05:55:06

An interesting, if controversial, viewpoint. I’ve always said that people who ‘pirate’ software will either download it illegally, or they won’t use it at all. So I wouldn’t really say that they’re helping software companies with their actions, but at the same time, they’re not hurting them. After all, you don’t download software that costs $1199 if you can afford it. And if you can’t afford it and don’t download it, you’ll simply do without, or go with a lesser, free program. Total lost revenue for the software company? $0.

Comment by Jeff Kee
2007-02-14 12:38:56

Yup that’s true. It’s money that I never would have ended up giving them.

This is a very controversial viewpoint, and i do not know if this is entirely true or not. It’s just one of my conspiracy theories that I come up with!

All that said, I’m very convinced of this… to make something widespread and common it has to be accessible. $1,199 isn’t accessible. The software market is interesting because technically speaking, each additional product stolen does NOT mean reduced inventory or materials, unlike cars or food or anything else… It’s a niche that digital products have, and they should be marketed from a different angle.

 
Comment by theGrinch
2007-02-14 18:23:19

the only software i’ve ever bought was an anti-virus software.. but no need now, i have a mac!

 
 
Comment by Robb
2007-02-14 07:27:18

Great post. I myself have a legal version of windows XP on my laptop I bought and my desktop as well, but before I got these, I had a cracked version on my old computer. I understand fully what Bill Gates is saying about the corp.’s having to buy the products. My father was taking a computer class and they wanted the teacher to buy an individual license of microsoft office for EACH of her 30 computers. 500.00 per license X 30 computers. That adds up quick.

Comment by Jeff Kee
2007-02-14 12:41:32

THAT IS EXACTLY MY POINT.

Thank you Robb. That is exactly what happens.

Most of the workforce knows how to use Office and Windows, nothing else. I remember when I went through an employment agency way back in teh days before I started my own gigs. They tested me on XP and Office. That is the standard. That employment agency had copies of the software. Bell Mobility had copies of the software. They have over 16,000 employees cross-country(if I remember correctly). That’s a lot of licenses, and a large corp like that CANNOT be meddled with software piracy allegations. 16,000 X $300 (assumign they got a volume discount) is still a boatload of cash, and this is only 1 Canadian company.

 
 
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