Women in Technology

Article:		Piracy is Progressive Taxation, and Other Thoughts on the Evolution of Online Distribution
Subject:		Financial cost of copying without paying
Date:		2002-12-12 08:10:44
From:		jasonfriedman80206
I liked the article generally. One argument which I thought was less strong than the others, however, is that copying without paying does not actually cost the producer of the content much money because (1) the people copying without paying likely would not pay under any circumstances, and (2) wider distribution increases awareness which increases sales. This may be true in some cases, and it may be true for O'Reilly products, but it's a mathematical and business question. Micros**t, for example, is probably in a better position than any of us to determine if _Micros**t_ would make more money by clamping down on copying without paying.

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• Financial cost of copying without paying
  2002-12-12 09:34:53  Tim O'Reilly | [View]
  
  
  I think you've stated a position rather more strongly than I did in the article. There are certainly cases where free copying is bad for the content producer -- but my point in "piracy is progressive taxation" is that the damage happens most to people who can most afford it (i.e. those already well known), while there is a benefit to those who are not well known. As with the taxation system, it *may* be worthwhile to trade off the harm to one for a greater benefit. And if you're a publisher, the benefit in distributing your sales over more product may lead to a stronger business overall. "Frontlist" driven publishing, where you have to create new product all the time to get revenue, is much less profitable than "backlist" publishing, where products whose development costs have been recouped, keep on selling. And those are the kinds of sales that are increased by better exposure and availability of older product.
  
  I'm not saying any of this is simple. There will be lots of disruption. But eventually, systems find a new equilibrium. I'm mainly speaking out against those who say the sky is falling. Just that inevitably, publishers will survive because they play an important role, not because they protect an entrenched position with draconian contracts and draconian digital rights management initiatives.