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?
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.
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.
True: in the absence of anticipation of exclusivity rights, creators would seek ways to repoduce the pseudo-scarcity that socially-recognized exclusivity rights would otherwise provide. And they will generally do so via less efficient means: for example, rather than giving the user a copy of the software, the creator will keep it in a “black box” they control, and simply perform the input/output over a network, incurring strictly more overhead than if they could trust the user to keep their own copy and not distribute it.
This phenomenon mirrors the more general ones of how:
societies with people more willing to steal others’ physical possessions will still find ways to be secure in such possessions, but by diverting more resources to securing them; or
societies with people less willing to trust strangers (or honor promises made to strangers) will still make credit transactions, but have to spend significantly more on enforcement mechanisms.
Well some would do it that way. But consider the possibility of cooperation instead of competition. Completely non-crippled software exists today already (open source). Crippling your software to make it scarce means it has to beat the competition by a larger margin. People must decide if the inconvenience is worth it. There’s also the risk of a culture that detests crippling develops that “frees” your software, despite attempts at crippling (e.g. cracking games).
Also, societies unwilling to accept the zero-cost of copying will still have piracy, but at a cost of less trust in the legal system.
Not to mention societies embracing “piracy” would have to divert less resources to discussing it...
A society that has a norm of honoring (creator-desired) exclusivity in creators’ informational creations (i.e. location of narrow, high-value targets within designspace), will be able to use both modes of creation—those that do and do not expect exclusivity (and its resultant monetary or aesthetic returns).
Certainly, the society without anti-piracy social norms can use the method you have labeled cooperative, but so can the one with strong anti-piracy norms. However, the former is cut off from finding the targets that actually do need a monetary incentive to motivate their discovery.
In much the same way, societies with a strong norms against monetary profit (esp in the production of physical goods such as food) can still engage in “communal” production but run up against strong barriers to producing advanced economy goods that require extensive specialization and concentrated risk-taking.
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):
first book by a new writer pretty much has to be free. No one trusts him.
a famous (trusted) writer writes crap book or no book, but gets money anyway. He loses trust. (“Trust” becomes new world currency?)
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.
True: in the absence of anticipation of exclusivity rights, creators would seek ways to repoduce the pseudo-scarcity that socially-recognized exclusivity rights would otherwise provide. And they will generally do so via less efficient means: for example, rather than giving the user a copy of the software, the creator will keep it in a “black box” they control, and simply perform the input/output over a network, incurring strictly more overhead than if they could trust the user to keep their own copy and not distribute it.
This phenomenon mirrors the more general ones of how:
societies with people more willing to steal others’ physical possessions will still find ways to be secure in such possessions, but by diverting more resources to securing them; or
societies with people less willing to trust strangers (or honor promises made to strangers) will still make credit transactions, but have to spend significantly more on enforcement mechanisms.
Well some would do it that way. But consider the possibility of cooperation instead of competition. Completely non-crippled software exists today already (open source). Crippling your software to make it scarce means it has to beat the competition by a larger margin. People must decide if the inconvenience is worth it. There’s also the risk of a culture that detests crippling develops that “frees” your software, despite attempts at crippling (e.g. cracking games).
Also, societies unwilling to accept the zero-cost of copying will still have piracy, but at a cost of less trust in the legal system.
Not to mention societies embracing “piracy” would have to divert less resources to discussing it...
A society that has a norm of honoring (creator-desired) exclusivity in creators’ informational creations (i.e. location of narrow, high-value targets within designspace), will be able to use both modes of creation—those that do and do not expect exclusivity (and its resultant monetary or aesthetic returns).
Certainly, the society without anti-piracy social norms can use the method you have labeled cooperative, but so can the one with strong anti-piracy norms. However, the former is cut off from finding the targets that actually do need a monetary incentive to motivate their discovery.
In much the same way, societies with a strong norms against monetary profit (esp in the production of physical goods such as food) can still engage in “communal” production but run up against strong barriers to producing advanced economy goods that require extensive specialization and concentrated risk-taking.