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Are Big Corporations Funding Piracy?

Big corporations use auto-software-piracy as an effective method to penetrate certain markets and to create product dependency and conditioning. This is a well-known fact.  As more and more countries align to and enforce international copyright treaties, and as more people are aware of the piracy problem and the ethics involved, the number of people using pirated goods in actual business production is decreasing, almost dramatically. This is good news for small software companies as they can be seriously hurt by software piracy. To conform to the new times, we see now pirated versions become fully functional “leaked” versions, or at least beta versions with no expiration date, along with a dramatic price drop for the original product in certain markets and almost free academic versions.

Small companies, garage ventures and illuminated individuals are the engine of innovation and paradigm shifting. It is more likely that revolutionary, interesting, useful technology comes from a small or micro company than from a big corporation. As we have seen repeatedly, a single innovation can change the tech and economic landscape forever.

“Treat the competition as the enemy” is the primary motto in business.  Certainly corporations do not foster or promote innovation by helping small business when governments hardly do it. A strategic (or not so) buyout is what happens in most cases, when the small business owner, or micro CEO does not have the vision regarding the impact of the technology that he/she has created and developed. What follows in most cases is the failure to integrate or to further promote the new technology, this on purpose or due to internal wars and egos.

New software that “may” have a notable impact is almost instantly pirated, properly packaged (digitally and physically) and signed by one or more groups in several locations around the globe. You may know this very well. You may know also that you software might be promptly associated with the word “shareware” that in the mind of end users equals free or almost free, shady and acceptable but low quality software.  By today standards all digital goods are commercialized as try-before-you-buy. 30-day trials are the industry standard and we have corporations offering 60, 90 and even 6 months of full trial.

Piracy affects small companies in a radically different way. In this case piracy helps to promote the product but hurts the sales in a far more dramatic way. This is not free advertisement. And you cannot probably sustain the progressive damage. Your big brother competition knows this. So, piracy is an effective tool used by “bigger than yours” companies to crush your salient and newborn business. Piracy groups are then a consulting service, handsomely paid by those who can afford it.

Thursday, June 26, 2003

Sorry Pablo but I ain't buying what you are trying to sell.

Just look at the music industry and the effect piracy is having on corporate sales.

Software piracy is not a new issue, however, it has become a VERY big problem in recent years.  Here are a few reasons why piracy has exploded:

* The opening up of the Internet to the general public
* The voluntary removal of various copy protection schemes in software by software companies
* The low cost of PC related hardware
* Easy to use P2P software applications

One Programmer's Opinion
Friday, June 27, 2003

The alleged link between internet piracy and declining record sales has in no way been proven.

Record sales went UP after Napster went on line, not down.

Record sales DROPPED after the RIAA shut Napster down.

I personally think that the record industry's problems have more to do with the recession and the constant production of recycled crap instead of good music, rather than piracy.

Chris Tavares
Friday, June 27, 2003

Also I heard DVDs have eaten into the CD market.  People haven't changed their entertainment budget much, but in recent years, consumers have decided that DVDs are a much better value.  Would you rather pay $18 for a CD with 3 good singles on it, or $20 for a DVD with a 2 hour movie and extras.  Bargain bin DVDs are as cheap or cheaper than bargain bin CDs.

Somebody smart in the movie business figured out where to set the price point for DVDs to make them an impulse buy.  They are much cheaper than VHS tapes were.  And supposedly the DVD extras have been very attractive for many movie fans.  It's all a matter of giving consumers what they want.  The record industry has not changed with the times.

Friday, June 27, 2003

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