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Cutting Prices Is the Only Way To Stop Piracy 620

Posted by CmdrTaco
from the way-to-obvious dept.
Stoobalou writes "The only way to stop piracy is to cut prices. That's the verdict of a major new academic study that reckons copyright theft won't be halted by 'three strikes' broadband disconnections, increasing censorship or draconian new laws brought in under the anti-counterfeiting treaty ACTA. The Media Piracy Project, published last week by the Social Science Research Council, reports that illegal copying of movies, music, video games and software is 'better described as a global pricing problem' — and the only way to tackle it is for copyright holders to charge consumers less money for their wares."
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Cutting Prices Is the Only Way To Stop Piracy

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  • by Anonymous Coward on Tuesday March 15, 2011 @02:53PM (#35495504)

    Netflix streaming is a good example of good pricing vs content offered. TV shows and movies sold on the iTunes Store is a good example of bad pricing. TV Shows in HD should cost 99 cents to own, 50 cents to stream and SD shows should cost 50 cents to own and 25 cents to stream. Movies should be priced at least half if not a quarter of the price for the DVD or BluRay version.

  • by UnknownSoldier (67820) on Tuesday March 15, 2011 @02:54PM (#35495538)

    > I rather spend $50 and have a great game than small little games for a few dollars.

    Fortunately people don't want that $50 over-priced nonsense and show otherwise....

    http://www.techdirt.com/articles/20090219/1124433835.shtml [techdirt.com]
    Valve dropped the price on L4D and sales went up over 200% !

            * 10% off = 35% increase in sales (real dollars, not units shipped)
            * 25% off = 245% increase in sales
            * 50% off = 320% increase in sales
            * 75% off = 1470% increase in sales

    http://www.g4tv.com/thefeed/blog/post/693342/live-blog-dice-2009-keynote-gabe-newell-valve-software/ [g4tv.com]

    "Valve decided to do an experiment with Left 4 Dead. Last weekend's sale resulted in a 3000% increase over relatively flat numbers. It sold more last weekend than when it launched the game. WOW. That is unheard of in this industry. Valve beat its launch sales. Also, it snagged a 1600% increase in new customers to Steam over the baseline."

  • Re:Bollocks (Score:4, Interesting)

    by spydum (828400) on Tuesday March 15, 2011 @03:07PM (#35495712)

    I agree, they won't ERADICATE piracy with lower prices.

    I actually think the sales numbers/experiment from Steam/L4D speak more about charging first adopters a premium, then tapering off your pricing as the new hotness factor rolls off, promoting sales later on for basically free. Using that model alone, you can charge less up front, and still taper the prices off and come away with the same net income, just over a longer period.

  • The only way? Stop? (Score:4, Interesting)

    by N0Man74 (1620447) on Tuesday March 15, 2011 @03:18PM (#35495856)

    It's naive to think it's the only way, or to think it will actually stop it.

    It will reduce piracy, at least among groups that are motivated to pirate based on the price barrier, but that's not the only type of group.

    From my experience, pirates tend to be broken up into these main categories:

    - People who pirate because they can't afford to be legit (at least not on everything), or simply think the prices are too high and refuse to pay the price being asked.
    - People who pirate because they are digital hoarders, and they wouldn't care what the price is. They just collect data for bragging rights, to explore all the data that's out there, for trading, or 'just in case' they need or want it one day (or in case someone else might want or need it.) Or maybe it's just to be rebellious.
    - People who pirate for trial purposes, to help them in making a buying decisions. Despite skepticism to the contrary, some of these actually buy.
    - People who pirate in order to avoid the bad user experiences that are often associated with buying legitimately these days, and who might actually be legit if there were less hassle involved.

  • Re:Bollocks (Score:4, Interesting)

    by gman003 (1693318) on Tuesday March 15, 2011 @03:26PM (#35495966)
    I think there's more to it than that. Take the case of the "Humble Indie Bundles" - you could set your own price, down to a single cent, and much of it (buyer-determined) went to charity. And yet piracy of those games was not only prevalent, but actually increased during these sales.

    This tells me that there is a significant mental barrier between "$0.01" and "$0.00". I do not believe it is the financial cost itself, but the difficulties of buying something online compared to pirating. The hassle of Paypal or credit cards or anything else is, IMO, the primary barrier. What is needed is a fast, zero-pain, minimal-set-up system for buying goods online. When buying the software is as easy as pirating it, piracy will drop.

    This is probably why Steam has been successful. Once you've set up purchasing with your account, buying a game is simple - most of it consists of clicking "next" a few times. It's not perfect - it tends to assume you want to buy multiple games at once, making buying a single game more difficult than it should be - and of course there's the DRM issue, but it seems to be doing this better than most.

    I occasionally do freelance work, making small game models/levels for random people online. Several times, rather than accept payment via Paypal or anything, I've simply told the client "find a game on my Steam wishlist that's about $10, that's enough payment for me". That's how difficult handling actual money online is - trading a service for a product is actually easier.

    Yes, pricing is part of the problem. I haven't bought a game at release-day price since the last big Zelda game came out. I don't mind waiting a few months (or even years) for the price to drop from $50 or $60 to $20. I also haven't bought music anywhere in forever - 8 songs that came out in 1986 are not worth $15, even if it is a magnum opus of heavy metal.

    So, really, the pricing is only half the issue. First is the divide between "what the product is worth" and "what the product is priced at", second is the divide between "how easy buying it is" and "how easy pirating it is". Solve those two, and piracy will drop significantly. Not to nothing, of course, but it will drop to reasonable levels.

C for yourself.

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