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Pirates Are Future Customers

April 27th, 2007

Developers, having their entire livelihood invested in the hope that people will actually pay for their products, are naturally concerned with the problem of software piracy. Attitudes toward piracy cover a wide spectrum, ranging from nonchalant to obsessive. I was talking to Stephan Cleaves about this earlier today, and it started me thinking.

I believe the two extremes are driven more by psychology than pragmatism. The nonchalant type would rather believe that people are honest and that things will work out in the end. So they do believe it, even if it’s not true. I hover dangerously close to that mode of thinking. On the other end, the developer can’t help but fume at the thought of illegal copies of their software being used by pirates. At the sight of one illegal code making its way around the net, they envision thousands of hard-earned dollars funnelling out of their bank account and into the the pirate’s filthy chest. It’s not about money so much as the principle of the matter! They shouldn’t be getting something for nothing!

The last thing I want to do is legitimize piracy. It makes me boil, too. Pirates either have no conception of how hard we work, or else they choose to ignore it and rationalize their theft. Does our working late hours day after day, handling development, marketing, quality, and support, all on hardware we had to purchase ourselves, warrant a $25 payback from a customer who reaps the benefits? Absolutely. But are the pirates getting something for nothing? I’m not so sure.

Pirates give us a lot less than their law-abiding counterparts, but let’s be realistic. A pirating user is better than no user at all. The pirating user may serve all of the functions of a regular user, short of actually giving us the hard-earned money. These services include:

  1. Word-of-mouth marketing. A pirate who is enough of a fan might even sell enough copies of your product to in some sense make up for the theft.
  2. Peer-provided support. A pirate who is expert in your product may serve as a valuable second-tier support mechanism, answering questions about your product in forums or chat.
  3. Market saturation. The pirate who chooses your product and shuns your competitor’s is contributing to your dominance of the market.

And the brightest possible take on these anger-inspiring hooligans? Pirates are future customers. My impression is that theft in general is an immature act. True, some folks never outgrow this particular immaturity, but what can be done about that? When a substantial number of today’s pirates do grow a moral backbone, they’re going to need software. The fact that they’ve been using your product illegally for years will probably make it among the first that they legitimately pay for.

Piracy is a real problem that we should try our best to systematically cure. This means more about teaching wrong from right than crime and punishment. Consider that many of the “rules” in our society are enforced not by threat of punishment, but by mutually agreed conventions of social correctness.

When piracy is viewed by our culture as akin to spitting in somebody’s face or letting a loud fart rip in a conference meeting, we’ll sell more of our software and have easier lives. Until then, I think a pragmatic view is best. Pirates aren’t exactly paying your bills today, but give them a few years to grow up, and they might.

50 Responses to “Pirates Are Future Customers”

  1. Pedro Says:

    Agreed. Give ’em time and they’ll come around, though I can certainly understand some of the hard-nosed approaches to it.

  2. Iain Says:

    I think we need to come up with a better term than ‘piracy’. I think ‘piracy’ invokes a romantic feeling in some, makes them feel like dashing outlaws, or something.

    I’m not happy with the term ‘software theft’ either, because it makes the crime sound worse than it is. As bad as copying software is, it is nowhere near as bad as breaking and entering. And I doubt that anyone who engages in cracking copy-protection schemes or copying software also practises burglary for a living.

    So, I think we need a term that describes the severity of the act, without providing any romantic or heroic overtones. Unfortunately, I don’t have any suggestions at the moment.

  3. ssp Says:

    I really am split about this. On the one hand I can totally relate to using software well beyond its trial period because that’s just what I did when I was young. The shareware fees seemed high when compared to the money I had and I didn’t have a credit card. So paying for software (with the many Mac shareware authors in the US) was something that required me to exchange money into dollar bills, pack them into an envelope and send them around the world. Which I only did for the applications I _really_ liked. And I suppose if I had been alienated too much by anti-piracy stuff going beyond the odd nag to make you know you should pay that might have left a bad impression which stuck.

    On the other hand I told a friend about the new Coda application on Tuesday(!) and he said he had already seen a cracked version of it on their network. And that just made me think WTF?! While I’m all for technical challenges and achievements, I wonder whether people who go ahead to crack applications and publish the cracks will really become paying customers at some stage. Cracking it may be fun but publishing the results starts being on the destructive side.

    Of course this can easily be a lose-lose situation for developers and too stringent piracy protection will only annoy your paying customers and just offer another delighting challenge to the people want to crack it. (e.g. http://fishbowl.pastiche.org/2007/04/15/product_activation_sucks)

  4. Julian Cheal Says:

    I can agree with this to. Being a student (only one month left!). I have not been able to afford all the many wonderful Mac apps available to me.

    So instead I find the next best thing.

    AppZapper were giving away free serials one of which I was lucky to get. So I will pay for the next version when the time comes.

    OmniGraffle / OmniOutliner / OmniPlan. Have been so useful for university project work. They offer a free version, it has less options than the full, however it is on my list of software to purchase once I finish uni.

    Delicious Library offer a 25 item limit on the free version, just enough to get me wanting to pay for it once I can.

    I think that what I’m trying to say is, if I can’t afford software, I really enjoy using a slightly restricted version, than a time-limited version. That way I can still use the app for as long as, but don’t need to buy it (yet) and don’t need to steal it. As the copy I have gets the job done.

  5. Andrés Says:

    In many cases you are right. For many years ( 90’s and still a few years ago ) I was a Windows user, and never paid for a piece of software, a couple of reasons that I can think right now:

    1. Money: Depending on your country ( Costa Rica in my case ) and your work situation ($) the software licenses could be very high relative to the income.

    2. “Playing”: I remember installing cracked applications for a few days just to play with it, maybe applications without trial or years back when only people with good connections could download big applications, or even way back I knew some one who went periodically to Asia just to get CDs burned with tons of software in order to sell them here.

    3. Just because it is an option.

    In theses cases of course, there is a rationalization to justify it. Any way, a few years back I realized I just couldn’t reconcile my career ( programmer ) with a user of “pirated” software. I guess I am one of those cases of a grown up ex-pirate :)

    But I am the exception around here, no one I know ( family, friends-programmers ) pay for their software, they don’t even make up excuses, they just think they can use software without paying because they can get it and no one knows about it.

  6. Steven Riggins Says:

    The only concern with this argument is that it misses the point. I think people agree with this argument because the product is intangible, and therefore apparently not costing the software developer anything.

    What if you applied the same argument to say a BMW? Hey, I’m not rich now, but I might be someday later! So I’ll just take this BMW thank you very much, I’ll tell all of my friends about it, I’ll even help my aunt with her stolen BMW in changing the oil.

    For me, the more interesting discussion is that about societal respect for other’s hard work and property rights. Sure, I’d love to own Adobe Photoshop, but I could not justify the cost for what I would use it for. So instead I use Photoshop Elements or other tools that are free or affordable to me.

    I think that because copying data is an intangible act, people take liberty and give themselves entitlement to the content without even considering respecting the content owner’s right nor requests.

    The same applies to music, etc. Yes, there is no question that “stealing” some music now might lead you to liking the artist and buying later. But isn’t that the right of the artist to decide? If the artist believes in word of mouth, shouldn’t they be able to say “Hey! Its donationware!”

    Nobody does that, though, because we all know how many people are rich from donationware don’t we? I think that answers the debate.

  7. Daniel Jalkut Says:

    Steven: ambitious attempt to tie up the debate, but I don’t think it’s answered so easily. I would never apply the same argument to a BMW because obviously intellectual property is different and can’t be compared to tangible property that requires renewable resources, etc., to produce.

    Music is actually a great comparison because uncompensated distribution of music also embodies many of the “not exactly for nothing” aspects I discuss here. Mix tapes, radio play, etc, are all good examples of market-saturation improvers that don’t directly compensate the owner (OK radio does to a small degree, but still).

  8. Stephan Cleaves Says:

    I agree with your point that education is the answer. This is true of so many things that are a problem in our world today from sexism to racism to environmental destruction to the myth of continuous growth to reckless driving. The root of this education needs to be the understanding that any given action will have an impact on something or someone else. While the impacts of piracy may not be as obvious as the impacts of other actions they still exist.

    There are plenty of excuses used to justify piracy and most of them come down to a false notion that the pirate deserves to use something they haven’t paid for. Just because a thing exists and you want to use it does not grant you the right to do so. The only difference is that software piracy is trivially easy compared to stealing physical goods.

    I don’t think we’ll see this change until the majority of applications in use are tied to an internet-based service of some kind. While existing licenses are basically saying you have licensed use of the software (in other words a service) in the future you will truly be paying for the service and the local software (if it exists at all) will be free, just a means to interact with the remote service. Perhaps it will just result in new forms of piracy, but from my perspective right now it would seem to be an easier way to protect the service from being used without having paid for it.

  9. Christopher Humphries Says:

    I think the bigger problem is that it is commonplace is no many locations. I personally know many people that have friends that tell them about some software and how not to pay for it.

    The thing is that there isn’t a personal connection and there is no recourse that will happen to them for taking the software without paying for it, especially if the company is large (like Adobe).

    It is much easier to feel bad for small software vendors than big companies, yet I think maybe that has gotten lost from pirating software for so long from the big companies (like Microsoft Windows).

    I think a good solution would be somehow having a personal connection with the users. People are less likely to do wrong to you if they have a connection, versus some non-person entity that they think probably has enough money to begin with and won’t miss it… etc etc etc.

    How does one provide a personal connection to potential customers over the internet? Would one want to pay for software if they got to know you versus a professional company entity? I don’t know how to do it, yet I think it is a good solution.

    Connect with the customers and potential customers, they will remember you and probably do ‘good’. Stepping in the user’s shoes here is needed, which may be difficult as software developers selling software.

    Can you provide a personal connection with people over the internet? They already are interested in your program/project, at least there is that segway into communication.

  10. Anonymous Says:

    I would never apply the same argument to a BMW because obviously intellectual property is different and can’t be compared to tangible property that requires renewable resources, etc., to produce.

    So if I’m going to use software that I didn’t acquire by legitimate means, I should acquire it on the net and not by lifting it off the shelf at CompUSA?

    Just trying to play devil’s advocate and arrive at an answer why it is not OK to cost Adobe money for their box and hard goods, and CompUSA for the lost product, but it is OK to cost Adobe money for the bits in the box, which is after all what their primary reason for being in business is (not the fancy box it comes in.)

    And yes, I know the argument that not every pirated copy is equivalent to a lost sale.

  11. Daniel Jalkut Says:

    Anonymous: Who’s saying it’s “OK”? You’re taking quite a leap there. It’s different, is all I’m saying. One kind of theft causes the vendor to have one fewer available to sell. The “pure bits” version doesn’t.

  12. Anonymous Says:

    Stephan wrote:

    But I am the exception around here, no one I know ( family, friends-programmers ) pay for their software, they don’t even make up excuses, they just think they can use software without paying because they can get it and no one knows about it.

    Your character is defined by the choices you make when you don’t think anyone is watching. Makes you wonder how they’d carry themselves about if they didn’t think they were under scrutiny in other situations.

  13. Andrés Says:

    >I don’t think we’ll see this change until the majority of applications in use are tied to an internet-based service of some kind

    I agree. Even business owners have told me face to face, that they will pay for example, for Windows licenses only when Microsoft starts disabling their software remotely.

  14. Anonymous Says:

    Daniel – I agree that stealing the pure bits version doesn’t cost the vendor hard dollars, and doesn’t make the product more scarce.

    Often times the simplified argument is made that since it is just bits, it was free to the vendor and doesn’t result in a net loss.

    This ignores the salient fact that all copies after the first aren’t free to the vendor. The vendor has to sell N copies before they can recoup the investment that it took to produce those bits. Adobe doesn’t recoup all of the investment it too to create Photoshop after it sells just a single copy :-)

  15. Milen Dzhumerov Says:

    Hi,

    I’ve also been thinking about this issue for quite some time. I think there are two main reasons why people pirate:
    1. No accountability – just because of the enormous size of piracy in general people do not give a damn when they pirate something. For example, they download a cracked app and don’t even care what the implications are. It’s like they say to themselves – “Everyone else is doing, so what? Big deal”. So they just feel like they are a needle in a haystack and it their actions don’t matter – but actually it all adds up.

    2. No consequences – Again, what happens if I download a cracked program? ABSOLUTELY nothing.

    3. No real contact – When you download a piece of software you don’t actually see the people working behind it (in most cases). To the pirates, it’s just a .exe which is floating around.

    4. People around you – If everyone else is doing, why shouldn’t I be doing it?

    5. It’s easy to do – That’s helping quite a bit I would have thought. Pirating is usually very easy to commit – simply downloading from a torrent/Usenet.

    I’d like to draw an analogy. For me, a piece of software is like a getting a taxi to go somewhere. The main point is that I pay for a service to get from point A to point B. If you think about it, with a piece of software you don’t get something you can touch – same when you get a cab. At the end of the journey you’re left with empty hands but I’ve made a step – you arrived where you want to go. Same with software – I don’t get a something tangible but it lets me do my job.

    Now… the reasons the taxi driving industry is “ahead of us” is simple – try getting a free ride and you’ll discover the answer :)

  16. Daniel Jalkut Says:

    Anonymous: Indeed – stealing bits is still stealing bits. Hence the “badness” of piracy which I don’t dispute.

    Milen: The difference between driving a taxi and developing software is if 100 people are using my app, and 50 of them are pirates, I’m still providing 49 more “rides” than the cab driver :)

  17. Steven Riggins Says:

    Daniel,

    I’m not attempting to tie up the debate and as I noted, the reason this argument can even be made is due to the intangibility of stealing software, music, etc.

    The reason I made the BMW argument was because I feel its an issue with society respecting each other’s rights. The only reason people don’t steal BMWs as often as software is because they might get caught. (Andrés made this point also). In other words, they respect others because there are consequences if they don’t.

    This is what I’d like to see change.

    While there are the noted benefits of piracy as you mentioned, I think that is a slippery slope to take, as it comes close to justifying theft.

    For example, lets say people could download music from itms for free, full songs. They can also at any time buy the song. It would be up to the customer to decide which songs to pay for and when.

    I wonder how many would pay because they felt that listening to the song once, twice or ten times was appropriate? How many would never pay because, well, nobody was watching?

    Why would customers of IP get to choose when to pay, and customers of tangible items don’t, unless they face a much higher risk of jail time?

    I bought Mars Edit after using the demo for a short while because it helped me do exactly what I wanted and was affordable. I did not buy Dreamweaver because it was far too expensive for what I needed. If Adobe said “Dreamweaver is free, install, and pay if you find it useful” I might install it, give it a shot, but once its free, I think its very hard for people to cough up money for something they already have. Would I pay? I don’t know.

  18. Daniel Jalkut Says:

    Steven: My point wasn’t to defend piracy – just to point out that it’s closed-minded to view pirates purely as enemies. In fact, I’m hoping that some pirate of my products will stumble upon this post, see that I view them as a not entirely evil part of this equation, and choose to convert to a legitimate user.

    I thought I was pretty clear throughout the post that piracy is bad and a problem to our trade. But I think it’s worthwhile to consider the benefits these “half-customers” provide us. I don’t think that discussing it openly will cause more piracy to occur.

    (Thanks for buying MarsEdit!) :)

  19. Steven Riggins Says:

    Daniel,

    I fully understood that you were not defending piracy :) And tho it might sound harsh, my stance personally is not too harsh. I do raise this issue when people copy music, etc and I am *sure* I’m the “dork who gives us a hard time” but I just hope that, as you, the education gets through some skulls.

    On the flip side, many book publishers would love to see libraries go away, which would be a travisty. Maybe software should go through the library system just like books? Borrow it when you need it, return it in a week, and if going back is too much of a pain, then buy it outright?

    Our local libraries do this with some DVD movies now, though the selection is not large.

    Then, you’d have access to all, word of mouth and some system to at least try and oversee it all, while giving those less financially fortunate a chance to learn your application.

  20. Nate Says:

    I honestly feel that donationware might be the way to go for some developers who are battling piracy. Let the consumer pay what they feel the software is worth – some will value, use and pay more than others. I feel that if one makes a great product then they will generally get reimbursed what they deserve.

    There is quite a bit of software out there that I would buy, but I can’t justify the total cost because I know that I won’t use it much, therefore I just don’t buy it. If the option was there that I could float a few dollars to buy I would, but some of the pricing makes the purchase more of a commitment than I want.

    I do believe in tipping, and paying for what you use. Make it easy for users to demo, use, and purchase at a fair cost – to them. Of course I believe in honesty, and have faith that people will do the right thing if you make it easy for them.

    This link from above from ssp is awful and shows exactly how a customer doesn’t want to be treated. Anyone remember Quark? Same type of customer service. No one wants to be treated as a thief – especially if that person paid for the software, and is not a thief.

    http://fishbowl.pastiche.org/2007/04/15/product_activation_sucks

    Ironically David released Inquisitor for free – which I am sure some would pay for – if he made it easy for them to do so, and at a price they felt comfortable with.

  21. Chris Says:

    The only reason people don’t steal BMWs as often as software is because they might get caught. (Andrés made this point also). In other words, they respect others because there are consequences if they don’t.

    Do you really think that? It’s a remarkably dim view of human nature, and I suspect the subset of people it actually applies to (sociopaths) mostly reside in the White House. I think most people don’t take physical objects that don’t belong to them because it is damaging to the person who actually owns the objects.

    For most people (who don’t work at the RIAA) the morality is murkier in the digital domain because, when you copy a set of bits, the person you copied from is not deprived of that set of bits. It’s abstract; there isn’t a gaping hole in someone else’s garage where an overweight German car theoretically bought and paid for with that person’s hard-earned cash should be.

    Also, who wants a BMW? Sure, it’s great to drive (perhaps the 3-series only), but it tags you as an asshole.

  22. Julian Cheal Says:

    Chris makes a good point:

  23. Julian Cheal Says:

    Whoops sorry pressed enter by mistake Ignore my comment above.

    Chris makes a good point.

    Copying software is literally that. A copy is made at no actual cost (to make the copy that is). I hadn’t really thought of it that way.

    I think people will always copy software music etc. Like Daniel said though he wants to convert someone that would copy his apps to someone that will later purchase it.

    I agree that good customer interaction is a good way to give users a reason to purchase.

  24. Stephan Cleaves Says:

    I honestly feel that donationware might be the way to go for some developers who are battling piracy. Let the consumer pay what they feel the software is worth

    This sounds good to customers, but it is not a realistic way to do business. If you are a hobbyist and not looking to making a living writing software go ahead and ask for donations. On the other hand, if you want to make a living you cannot rely on people giving you money from the goodness of their hearts. Requiring the purchase of a license to unlock a demo version of an app is essentially keeping the honest people honest. I.e. without that requirement most would not pay, why should they? They’ve got the full working app right there on their computer.

  25. Steven Riggins Says:

    Of course I don’t think everyone would do that, but as I said, its a slippery slope.

    Do you really think that if a Toyota Prius (heh) could be taken with no chance of being caught (even as you drove it around) that many people would just pass up that chance? No, they’d jump at it, but maybe a different set of people (those with life threatening habits) vs software geeks.

    Again, my point is, and I agree that education is key, its about respecting people and their content, regardless of how easy or free it is to obtain.

    Correct me if I am wrong, but wasn’t it Canada that started taxing blank CDs as a way to help pay back artists (or line govt pockets?) because the blank CD manufacturers were the only ones benefitting from the piracy of CDs.

    And it this same thinking (along with iPod pressure) that gave Universal the heavy hand to squish $1 out of MS for every Zune sold because “All ipod users are thieves” Which of course is not true – they’re just samplers of content they don’t own. :)

    So what I’d like to see is education and discussions, like this one, to make people think about those behind the bits. Respect goes both ways and a long way.

    Another example – Weird Al does parodies of songs and (again, correct me if I am wrong) I don’t think he needs any permission to create the parodies, but he has always gotten permission before doing a song out of respect (There is some dispute over this fact with Amish Paradise I believe) He does it because he doesn’t want trouble and he respects the artists and their work.

    That is admirable.

  26. Chucky Says:

    I download Serial Box every month and run multiple apps that I’m not paying for.

    I also have ended up purchasing many apps that I had been running pirated once I decided they were “mission critical” to my computing life.

    I’d suggest developers take basic steps to discourage pirating, but not go overboard. David Watanabe, for example, has made his apps basically pirate-proof. I think his apps are of very high quality, but the fact that I can’t run them pirated and grow to love them has very likely contributed to the fact that I’ve never purchased one of his apps.

  27. Geoff Says:

    Interesting read, but I do take issue to “theft in general is an immature act.” I dont believe you can generalize like this. If I steal a loaf of bread to survive is that immature? Granted software piracy and stealing a loaf of bread are drastically different things, but I dont think you can generalize the motivations for any act in such a way.

    On that note, Id like to bring to like the distinction between the cracker and the pirate.

    The cracker is the one who did all the work. Hes the one that rebuilt parts of your application solely from the assembly (something most developers couldnt do nowadays) and more then likely is some kind of developer themselves. These people are intelligent and methodical. But….they dont care about your app. They probably have never used it (past making sure what their hard work does in fact function properly (the crack/or sn)) and never will. The vast majority do it for the challenge, no the reward.

    The pirate is the end users. They are the ones using the crackers work. These are the regular people who follow instructions to get free stuff. These people are your potential clients.

  28. Michel Says:

    True, they may well be future customers, and may even bring benefits, but what about the class of pirate that is actively a burden?

    Perhaps it is less common in the application space than in gaming, but I’ve heard several stories of a company paying support costs for a sizable population of software pirates.

    For example: http://www.shacknews.com/extras/2006/072606_ritual_piracy_1.x

  29. Daniel Jalkut Says:

    Hey Michel – I looked you up (ah – finger to the rescue) … funny meeting you here ! :)

    Yeah I think the support issue could get pretty annoying once you have enough pirates who think they are entitled to support. I suppose at the point you could measure it, would be a good time to put some system into place that requires proof of purchase for support.

  30. 2600 Says:

    A software developer will do well to heed this advice:

    Typically for a successful product, you want to push for 10-20% of it to be pirated. The reason? The people that use pirated software are by and large the “opinion leaders” of a software market, they are the uber nerds that control the social direction of good and “bad” software.

    If you make your security toooo tight, it will die on the vine.

    If you make it too loose, you won’t make tons of money.

    So strike a balance…

    Another word for “piracy” is “advertising expense”… never forget this.

    So heed these tips, I’ve seen plenty a great program die just because it was too tightly controlled and couldn’t breathe.

    Apple, MS, (Adobe until recently) have loose software restrictions for a “reason”. It’s what made them successful, so don’t misunderstand the overall “value” of piracy… it’s the fertilizer of your success.

  31. Peter Hosey Says:

    Piracy is a real problem that we should try our best to systematically cure. This means more about teaching wrong from right than crime and punishment. …

    When piracy is viewed by our culture as akin to spitting in somebody’s face or letting a loud fart rip in a conference meeting, we’ll sell more of our software and have easier lives.

    The problem is that it is hated in our culture, but not in their culture. Pirates have their own forums, their own IRC channels, etc.—their community and our community do not intersect.

  32. Ted Says:

    While I agree with most of what you are saying, I’m not sure I agree with the assessment that using a cracked copy of shareware app is not on the same level as someone walking in to CompUSA and theiving a boxed copy of say, Photoshop. To me, they are the same. Actually, the cracked copy of the shareware app is worse. And I’ll explain why. The shareware developer is usually either an individual, or a very small company. Usually they have only a couple of products on which to make their livelihood. They also provide the easiest means possible to acquire the product (the internet). Additionally, they usually provide a trial period to let the end user demo the product. Finally, the product is usually extremely inexpensive.

    Now, on the boxed software side, Adobe has registered a sale once CompUSA buys the software from them, so they aren’t the ones losing out. CompUSA (or whomever the store is) takes the hit, not the developer. Now, I hate to sound callous towards CompUSA (and other retail distributors), but they price their products accordingly to account for “shrinkage” (their term for theft). They have hard numbers on the theft, and can change the price of their products accordingly.

    I’ve been there. I started in Graphic Design, and when I was younger, I couldn’t afford Photoshop, so like everyone else, I pirated it. Once I started getting paid for my work, I bought a copy. Around this time, I started to feel the effects of piracy, as many of my colleagues in design chose not to buy Photoshop, even though they were making more than enough money to purchase it. So what ended up happening? Every kid eventually pirated Photoshop, and the professionals started to have to compete with kids. It lowered the entire value of graphic design. Ditto for web designers. Once Adobe tightened the lock with activiation, I noticed that suddenly I wasn’t competing as much with kids giving away their services (instead, I was competing more with professionals overseas in India and the Phillipines, but that’s another story).

    Those who say piracy of their product is just another “advertising expense” are correct in some ways. But the same could be said of a graphic designer giving away their work to “advertise” their skills to other clients. However, as I have found out, once you give away your work, it becomes near impossible to convince someone that you should be paid for it the next time.

    So, as someone who has purchased over 100 apps from independent Mac software developers, I have to say that piracy can and will lead to future customers. But that still doesn’t make the actual theft of the software any less wrong or any more justifiable.

    I think for the indie developer, the key is to approach the problem from both sides. First, give the user a good taste of the software by letting the use it for 30 days with all the features enabled. Second, make the key as strong as you possibly can, so when the 30 day demo is over, either they pay up or stop using it. Good examples of this are TextMate and Ambrosia software’s products. Sure, it makes extra work for you, the developer. But from what I’ve read from Ambrosia on the topic, they definitley saw a return on the investment.

  33. Chucky Says:

    “Typically for a successful product, you want to push for 10-20% of it to be pirated. The reason? The people that use pirated software are by and large the “opinion leaders” of a software market, they are the uber nerds that control the social direction of good and “bad” software.”

    While not being sure, I think this is likely correct.

    Again to refer to Watanabe, since he’s the only guy to take the time and effort to actually reduce his piracy problem to 0%, I wonder if the results have been positive or negative for him.

    He’s gets generally bad press and has rabid detractors in comments sections throughout the blogosphere. I attribute almost all of this venom to a rather childish reaction to the fact that you can’t pirate his products.

    But childish or not, the reaction is still out there. And it’s certainly a tempting conclusion to think the bad will is losing him more business than he gains through folks who purchase because they can’t pirate, no matter how hard they try.

  34. Chucky Says:

    “Typically for a successful product, you want to push for 10-20% of it to be pirated. “

    I think this is generally correct across IP for a variety of reasons.

    You want to let the edge case users have your stuff for free, since we are talking about nonrival goods, and since the edge case users do provide some marketing benefits as well as being possible future customers. You just need to make damn sure you get revenue from most users.

    The key is finding the balance.

    The movie industry is kinda in a decent position since DVD’s are encrypted and the median movie customer won’t crack the encryption, even though it’s easy for edge case users.

    But the music industry is in a lousy position since CD’s lack even basic piracy deterrents for the median customer.

  35. Daniel Jalkut Says:

    Peter: I didn’t mean “our culture” as a confined reference to some small elite group. I meant it as a world culture. I think in general piracy *is* looked upon rather lightly by the average person. I don’t think you need to go to the special pirate sites or forums to find those who are sympathetic with them.

  36. njyo Says:

    In general I have to agree with Nate. I think he makes a good point with the Donatikonware.

    Personally, I see the problem two-fold: I understand that developers need to live off what they are doing (working in the field myself) but at the same time I see my own financial limitations.

    The first part means to me that I see a difference between the struggle of a independent software developer (Daniel, Wil, OmniGroup) and a big software company (Apple, Adobe or M$). Since I feel that my monetary customer vote has much more effect with the small business – they need my money much more despreately – I prefer to support the small business. Even more, I do not want to use their products unlicensed. As an example I never really used Proteus since it was too expensive for me, instead I went for Fire, which was open source. However, I cannot afford Adobe Lightroom, especially since I use it for my hobby. Coda, on the other hand – written by a small SW house – I will gladly pay as soon as I start using it because at that moment I will use it for real and not just play around with it.
    In this sense the whole view is pretty similar to music piracy. I am voting with my money. I could survive without a Adobe CS4 but I hope that there will be a Coda v.2 some day. That is why I will pay for it – it is more of a donation for future development than a reward for the things achieved. Why? Well – in contrast to the BMW – the software has been written. If you steal it, it will not cost the developer anything more (if we do not count support, etc.). The BMW needs to be produced and stealing it does not only steal the IP but also the material, which is why SW-piracy is not the same as simple stealing.

    The second point is the wallet-share. My applications folder contains something like 180 apps, whereof around 60% are free (open-source, freeware), 10% shareware I have bought, 20% shareware in demo mode and 10% (the big ones) pirated. Alltogether, I would say that only 30% of those apps are used on a regular basis, and these will account form the 10% pirated, 10% payed shareware and 10% open-source. All the other programs are used so rarely that I either happily can use them in demo-mode (e.g. VoodooPad Lite) or could actually live without them. If those start limiting usage I will definitely not buy them but ignore them for the rest of time. In contrast, it would create negative publicity for them. However, if I could donate what they are worth for me, I would do so (honestly speaking I would also consider getting involved by helping out as developer and interaction designer as paying for them).

    For this reason I personally think the way SubEthaEdit had it earlier was a pretty good attitude. Use it in private for free (donations are encouraged), for commercial use one needs to have a license. Give people the possibility to show their support by donating money and/or commitment to the product (testing, helping, feedback) and sell support for it. You could even go so far to give registered users the possibility to vote about feature requests.

    I personally believe in the honesty in educated people, means if they understand that there is this dev putting time into it, they want to support it. I also believe that most people are not depending on software to live their life. If they are forced to choose between buying and not using that they will most often not use a tool (especially because there is also so many).

  37. Benoit Joossen Says:

    Hi, Daniel

    I’ve posted a blog entry to reply yours, also backlinked you.
    “My software doesn’t get enough pirate’s attention”

    http://www.aeroquartet.com/wordpress/2007/04/28/my-software-doesnt-get-enough-pirates-attention/

  38. Julian Cheal Says:

    To what point though does someone distinguish between a small developer or development company and a large one.

    By that I mean people have said they wouldn’t for instance pirate Daniel’s apps since he is a small indie developer and he needs the money.

    But what if tomorrow he became super rich with many tens of thousands of customers would it then be OK to pirate his software. According to some of the posts it would.

    Just a thought

  39. Daniel Jalkut Says:

    But what if tomorrow he became super rich with many tens of thousands of customers would it then be OK to pirate his software. According to some of the posts it would.

    Oooh! Let’s find out, shall we? :)

  40. Chucky Says:

    “By that I mean people have said they wouldn’t for instance pirate Daniel’s apps since he is a small indie developer and he needs the money. But what if tomorrow he became super rich with many tens of thousands of customers would it then be OK to pirate his software. According to some of the posts it would.”

    I think it’s a pretty normal human emotion to think stealing from Wal-Mart is more justifiable than stealing from a mom ‘n’ pop corner store.

    This emotion may break down upon closer examination, but it’s always going to be widely held.

  41. Ted Says:

    “Well – in contrast to the BMW – the software has been written. If you steal it, it will not cost the developer anything more (if we do not count support, etc.). The BMW needs to be produced and stealing it does not only steal the IP but also the material, which is why SW-piracy is not the same as simple stealing.”

    This is just wrong. Look at a company like Panic. I believe they are in the neighborhood of 12-15 employees. Having a stable of talent like that isn’t cheap. Steve and Cabel have to pay these guys, remember. Talented people don’t like to work for free. So every copy of their software that is in use and isn’t licensed is a theft. We can rationalize it six ways to sunday (and many of the rationalizations are made by the developers themselves), but it is what it is. Now, swap out Panic for a larger company like Adobe or Microsoft. At these sizes, people tend to start the super-rationalization machine and say things like “well they’re a large company, my pirated copy of their app isn’t hurting anybody”. But the economics of software development are pretty much the same whether it’s a one man shop or a 800 lb gorilla like Microsoft. Software costs money to produce even when there is no physical product shipped. Every copy that is in use, but not paid for, is a theft. Companies like Microsoft have large enough margins in their products to accomodate piracy. Smaller companies like Panic probably have margins too, albeit smaller. The indie developers have less margins, and obviously feel the sting more.

    Still, as a small developer, I can understand to some degree using piracy as a psuedo viral marketing campaign. Some of those pirating could possibly convert to a sale. I just think the whole development ecosystem would be in better shape if developers made their keys stronger (ala Dave Wantabe and Ambrosia SW), and pirates were forced to pay for the tools that they use.

  42. Anonymous Says:

    Why? Well – in contrast to the BMW – the software has been written. If you steal it, it will not cost the developer anything more (if we do not count support, etc.).

    It has been written, but it was written on credit. The investment is to be made back by selling the software.

    That’s like saying when you steal the BMW, BMW is only out the cost of the parts for the car that you stole, because after all they have already paid the people who assembled designed and assembled the car, the plant it was built in (i.e. software engineer’s office), etc.

  43. Chucky Says:

    “Still, as a small developer, I can understand to some degree using piracy as a psuedo viral marketing campaign.”

    It’s the exact same for big developers.

    Do you think Microsoft and Adobe want users in China to be pirating their software or to be using free/cheaper competing software? They obviously see advantages in gaining market share from users who aren’t prepared to currently pay for their software.

    This is why nonrival goods are fundamentally different from something like BMW’s. A car manufacturer could never adopt the strategy of Microsoft and Adobe.

    “I just think the whole development ecosystem would be in better shape if developers made their keys stronger (ala Dave Wantabe”

    Then I don’t think you’re paying very close attention to the discussion at hand.

    I’ll reiterate that using Watanabe as a case study is crucial to understanding the issue.

    It’s interesting to note that Watanabe is now forced to develop and promote a piece of freeware to recoup the bad PR he’s gotten through his anti-piracy strategy.

  44. systemsboy Says:

    I so want to steal your software right now.

    In fact, I’m hoping that some pirate of my products will stumble upon this post, see that I view them as a not entirely evil part of this equation, and choose to convert to a legitimate user.

     
    Back in the OS9 days, Digidesign used to give away a free version of ProTools. It was fully functional and would run off the built-in hardware, but was limited to 8 tracks (or maybe it was 4). I used that version for years. It was plenty for me. But by the time they stopped offering it I was so addicted to ProTools I went out and forked over $450 clams to have it again. And I’ve certainly recommended the purchase of software I’ve stolen. So to some extent I think you’re right. Free users are better than no users.

    On the flip side, from a systems administrative perspective, there are a lot of licensing schemes that just do not lend themselves to large installations. Hell, there are some that don’t lend themselves to installation at all. We have been completely unable to get Combustion working on our educational lab systems despite numerous emails to the manufacturer. We will NOT be buying it again for just this reason. That’s about 5 sales they just lost, but untold future users. So I’d caution developers to not make their licenses too restrictive. Don’t punish your legitimate users. They will abandon you.

    -systemsboy

  45. Ryan Perry Says:

    Great article Daniel, and great work clarifying your position in the comments above. :)

    Just to flesh out this discussion a bit more, I’ve posted a brief article on this subject on the Big Robot blog, here:

    http://www.bigrobotsoftware.com/blog/2007/04/avast_pirates.html

    As fellow indie Mac software developers, we don’t think software piracy is ok, but we think that protecting our software from piracy needs to take a back seat to the user experience.

  46. Luke Says:

    This is a really excellent discussion. I wanted to just quickly comment on the two seperate concerns that I see clashing here:

    Firstly, the psychology and ethics of software theft – is it ever justified, why do people do it when they know it hurts developers and so on. This has been done many times before, and I don’t see as being very productive overall.

    Secondly, the best response by developers – how do you insist on payment when so many people expect to get a copy for free? This is the practical survival discussion that I think needs some deep thought: there are a lot of different methods, some of which work better than others, FOR SPECIFIC AUDIENCES.

    (An aside on that: I used Isadora – a VJing/live video app – from troikatronix.com for a couple of months before purchasing a licence. The demo works in full, but you can’t save. I had a directory full of screenshots which I could use to remake patches every gig. Other programs had restrictions that meant I couldn’t really use them for real gigs: I could only really play with them at home. The app that got me hooked was the one that let me test it out in practice… the others would have had a better chance of my purchasing them if I could have found a pirated copy to use for performances!)

    The two discussions intertwine: as an indie, you have a much more leverage on the conscience of a customer because they feel like they are robbing a person rather than a faceless organization.

    Piracy won’t stop due to *any* argument you make, it’s more about economics and opportunity.

    Personally, I know that any app I’m after will turn up on the torrent sites within days or hours of release: there’s a really industrious scene out there supporting this! But I still buy my apps (even if I have a period of testing beforehand) because I am subscribing to the continued existence of indie mac developers. The pirates that are your future customers are the ones who understand this ecology. The troubling part is communicating this in a compelling manner.

  47. David Hendricks Says:

    I suppose this is like looking for the silver lining in the cloud – hoping that the pirates will become future customers. I’m sure some will, some won’t. But it happens in the real world too. Some people will always be criminals. Brick and mortar stores budget for physical loss due to theft, breakage, etc, and price things accordingly. I can only assume that software companies build that into their price structure. If people thought about pirates driving their prices up, they might think twice about lending their software to their friends. For an interesting reversal on the phenomenon Check out BradSucks, a musician that gave his music away first, and got paid for it later. I don’t think it would work with software quite as well though.

  48. ryan Says:

    Lots of different opinions here (good thing) but I have to point out that, in my experience anyway, pirates are LARGELY people who simply can’t afford to buy the app. It doesn’t directly hurt the software vendor because you simply could not have bought the software in the first place.

    To use the taxi analogy from way-way up there. If I have 0 dollars in my pocket I can’t take a taxi ride. If I try to take a free taxi ride the driver will kill me because it costs him gas, he clearly will suffer a net loss if I get a free ride.

    Software is not the same situation. If my friend gives me a copy of Textmate (an app so fantastic I would pay double what Allan charges) does Allan really lose anything? He lost one hypothetical license fee, but he doesn’t know that. All he knows is that he didn’t make 5 sales today, only 4.

    It induces eye-rolls but there is such a thing as “I wouldn’t have (or couldn’t have) bought it anyway.”. Either way a sale is ‘not made’, whether I am using the app or not is irrelevant.

    This also applies to overpriced software. If I think that Microsoft is charging an arm and a leg for windows (which they do, and which I cannot afford) then why wont I pirate it? They didn’t have to pay to ship it to me, they didn’t have to pay for the bandwidth for me to download or burn it, they didn’t have to package it. The only person that loses is ME if I don’t pirate it! (ok bad example, I lose if I do pirate it in windows case…. but you get the point).

    If BMW’s were cloneable (ie, i can make an exact replica for a friend at 0 cost) what would be wrong with me doing that? I can’t afford 80,000$ so BMW has gained and lost nothing.

    To clarify, I buy all the software I enjoy using, I’ve even donated and bought t-shirts and so on from certain vendors, but at the same time I don’t really see what the big deal is. I’m a programmer (corporate) too but if I had a killer app and was making a living I wouldn’t care in the least if a few hundred people got free copies. Maybe they’ll even send me e-mails telling me how much they enjoy using the product… I’ll be none the wiser, but it wont matter, because it costs me an inconceivably small amount to ‘clone’ more exact replicas of my product. I can afford to lose a few to pirates.

  49. Andy Says:

    I’m coming late to this discussion, but what the hey. Someone might notice!

    I honestly feel that donationware might be the way to go for some developers who are battling piracy. … I feel that if one makes a great product then they will generally get reimbursed what they deserve.

    Unfortunately, I don’t think this is true. I say this as the developer of a small piece of donationware. 50,000 active users, donations total to date: £250 (or, half a penny per download). I’m not bitter, because I don’t depend on this income at all, and I don’t push the donation angle. But it demonstrates that you’re unlikely to get what you feel your time might be worth!

    I think Wil Shipley has a very enlightened attitude towards piracy:

    It doesn’t hurt you to have something “stolen” that (a) is virtual and (b) wasn’t going to be purchased.

    I’ve sometimes not paid for software in the past, I must admit. It’s not a matter of education – I’ve always known it’s wrong – simply, a matter of money. I’ve always tried to apply a similar principle to Wil’s, just from the other side: I’d only pirate something if there was no chance I’d buy it; ie., given a choice between buying and not using it, I’d take not using it every time.

    It’s tremendously difficult to justify paying that $15 for an app you’re only going to use this once, or simply impossible to pay the $400+ for that massive commercial app that would simply make your life slightly easier. On the other hand, I’ve bought a handful of really useful apps, and donated money to those who give away tools which make my life easier. So my unofficial policy may seem to breed contradictions, but I honestly believe that no-one gets hurt by it, in the same way as I’m not hurt if no-one sends me money for my stuff. I call that fair play.

    Wow, this became an epic. I’d just like to finish with a thought about Dave Watanabe. Whatever you think of his software and his attitude, surely anyone who charges money for software which enables piracy is on dodgy moral ground? How can you possibly defend that?

  50. Jo Says:

    One thing that would stop a lot of piracy: requiring free trials of all apps. Kind of like the Xbox live arcade. Paying for a couple terrible apps is enough for most people to rationalize pirating them.

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