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Vaste comments on Ethics of piracy - Less Wrong
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Comments (43)
What would making piracy legal really imply? (I.e. assume there are no IP rights/restrictions/monopolies.) How would a company like Adobe make money that way? This is something worth considering.
How might programmers make money? The people who buy the software (e.g. a database for a warehouse) still needs it, and would still be willing to pay for someone to make it. The company may also try to keep it local and secret, if the warehouse database is a strategic advantage. Or they might share it if they care more about e.g. the better quality that naturally comes from more users (e.g. more bug reports and developers -> fewer bugs).
What about Adobe? They might have to sell the first copy of their software, i.e. setting a price that people pool together to meet before they will release the new version, after which anyone can copy it freely of course (anyone with a computer). This is a very different business model from earning money from the software continuously (i.e. from each copy), and might generate less funds. I don't know if any area uses this business model already?
That sounds like the threshold pledge system, which is fairly common in the nonprofit world and has been applied to a few media projects that I'm aware of. Kickstarter is probably the most famous service to use the model.
I am not an economist, but I wouldn't expect it to generate the funds of sale by unit if widely adopted. There's a basic information asymmetry there which I'd expect to make people averse -- and justifiably so -- to letting go their money.
What asymmetry?
I can think of two problems (context being writers and books):
In a way, the relationship writer - readers becomes more similar to that of employee - employer.
Readers have more information about the quality of a new book in a business model where the book exists publicly and can be browsed in a bookstore, borrowed from friends, etc. than in a business model where the book has no public existence until bought and paid for. This can be diluted somewhat by giving out sample chapters, advance copies for reviewers (but they'd better be trusted reviewers), et cetera, but nonetheless I'd expect it to push willingness to pay down at the margins. Especially taking hyperbolic discounting into account -- readers will generally pay more for a book today than a book to be published at some indefinite point in the future.
The marginal cost of producing new digital copies of a book is miniscule, so it might still end up being favorable to an (established) author relative to dead-tree publishing -- but compared to self-published digital media sold per copy, I'd expect it to come out to a loss. There are other piracy-friendly business models out there, though -- I'm rather fond of Baen's Free Library, for all that their books are unabashed pulp.
There's also government contracting, which is a similar situation, but with lowest bidder instead.