[raydiatian]

There’s some economic idea I heard a long time back whenever I hear about piracy, where basically the argument for allowing piracy of digital goods is “well, the majority of digital pirates lack the income to be honest customers in the first place; even if you managed to stop 100% of digital piracy, you’re not going to find any residual revenue.”

I don’t know how I feel about it, but it always intrigued me.

[eep_social]

To model this, start by considering an abstract price vs demand curve - as price goes down demand goes up. Since we are looking at a digital good, supply is effectively unlimited (actually the marginal cost of offering a file for download which is zero until you’re too big for “free” options like google drive or imgur etc). So if we offer our digital good at the low low price of 0£, everyone who is interested in our product will “buy” it (ignoring discoverability and marketing, this happens with technical books all the time). However, if you raise the price to £5, some percentage of those who are interested will no longer be willing to buy. Perhaps money is tight and that’s their lunch, that means the opportunity cost of buying the digital good is lunch. Those people are never going to buy, at practically any price, so piracy is the only way to reach that segment of the market. The question is how big that segment is and whether there exists some price point that will get them to buy while continuing to provide incentive for you to offer the good.

There is also an interesting sidebar on the overhead of doing a transaction for any non-zero amount vs giving something away for free. The gist is that if you could do a (micro)transaction for $0.01 cheaply enough, you would be able to capture more of that market by lowering your overhead for offering the good.

This is also related to the idea that the optimal amount of fraud is not zero [1].

[1] https://news.ycombinator.com/item?id=32701913

[crazygringo]

I think it has limited truth.

Everyone I know who used to pirate music, now just subscribes to Spotify or whatever. So definitely not the case there.

On the other hand, not one person I know who used to pirate Photoshop, has ever then personally paid for it once they started making money. (Their employer often did, though.)

Movies/TV are somewhere in the middle. I think a lot of people pirate because the content they want to watch is spread out among so many services that need separate subscriptions. You can't pay for all of them all the time when you go for months without touching some of them, but constantly canceling and resubscribing is madness.

Also dealing with the nonsense that Netflix won't display high-quality resolution on all external displays, etc.

[dylan604]

>On the other hand, not one person I know who used to pirate Photoshop, has ever then personally paid for it once they started making money. (Their employer often did, though.)

Hi! Nice to meet you. With the much derided (on HN) monthly plan, I have been paying for Photoshop (and its cohorts) for my own personal use without an employer paying for it. I even have a paid for version of Office. In fact, I no longer have any software illicitly obtained. It's either a fully paid version or something offered for free. Why? Because I can afford it in direct counter to your argument.

[daft_pink]

I'm not sure that's true. I think that large software packages like photoshop have become way more available for people to pay for with subscriptions. I never paid for it and never would pay thousands of dollars for it, but now it is included in a $30 a month subscription from Adobe that I got mostly for Acrobat.

The only practical way for a high school student to get photoshop was to pirate it when I was a kid. My parents weren't going to shell out thousands of dollars for something like photoshop or autocad.

[bigfudge]

From the perspective of most artists, piracy and Spotify aren't much different.

[lostgame]

Well, they also still bought CD's they liked back then. Usually their favourite bands, or whatever. Even in the Napster/LimeWire days when everyone was doing it they always still seemed to buy their favourite artist's new CD's when they came out.

[raydiatian]

> Everyone I know who used to pirate music, now just subscribes to Spotify or whatever. So definitely not the case there.

Sure, people can ascend through income classes, but there’s always a new cohort of broke young people. I imagine young adults today are pirating plenty as well.

[ilyt]

I think there is probably few percent of revenue to find but person pirating 10 $60 (or now $70) games is not going to buy 10 games when they won't be able to pirate them.

They might save up to buy one $60 game. Or wait for it to go on sale and buy it for $30

On flip side, seeing some DRM-ridden game often just makes me throw it on wishlist and buy in a year or two when they remove it and game is now half the price.... not like I have time to play all the games I want anyway

[k__]

Probably a plausible deniability issue.

If you wouldn't prohibit piracy, it would become normal and the people who could pay stop paying too.

[unaindz]

In Spain is legal to download and share but people often pay for it anyway.

As Gabe Newell said the best way to combat video game piracy is by offering consumers better service than what they might receive from pirates. Piracy is not a pricing issue, but rather a service problem.

[tastyfreeze]

That was true for me the years I wore an eye patch. Now I have the money but turn to piracy occasionally for convenience. Make it easy for people to pay and consume content and piracy goes down.