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Software piracy exists because-
1) Lack of appropriate technological controls (like those on DVDs) or on Bit Torrents (an innovation on the centralized server like Napster) or on Streaming etc etc.
Technology to share content has evolved at a much higher pace than technology to restrict content from being shared or limited to purchasers.
2) Huge difference in purchasing power across the globe.
An Itunes song at 99 cents might be okay buy in USA, but in Asia it is very expensive. Maybe if content creators use Purchasing Power Parity to price their goods, it might make an indent.
3) State sponsored intellectual theft as another form of economic warfare- this has been going on since the West stole gunpowder and silk from the Chinese, and Intel decided to win back the IP rights to the microprocessor (from the Japanese client)
4) Lack of consensus in policy makers across the globe on who gets hurt from IP theft, but complete consensus across young people in the globe that they are doing the right thing by downloading stuff for free.
5) There is no such thing as a free lunch. Sometimes software (and movie and songs) piracy help create demand across ignored markets – I always think the NFL can be huge in India if they market it.Sometimes it forces artists to commit suicide because they give up on the life of starving musician.
Mostly piracy has helped break profits of intermediaries between the actual creator and actual consumer.
So how to solve software piracy , assuming it is something that can be solved-
I dont know, but I do care.
I give most of my writings as CC-by-SA and that includes my poems. People (friends and family) sometimes pay me not to sing.
Pirates have existed and will exist as long as civilized men romanticize the notion of piracy and bicker between themselves for narrow gains.
- Ephesians 4:28 Let the thief no longer steal, but rather let him labor, doing honest work with his own hands, so that he may have something to share with anyone in need.
- A clean confession, combined with a promise never to commit the sin again, when offered before one who has the right to receive it, is the purest type of repentance.-Gandhi
- If you steal, I will wash your mouth with soap- Anonymous Mother.
- You shall not steal- Moses
- Steal may refer to: Theft, the illegal taking of another person’s property without that person’s freely-given consent; The gaining of a stolen base in baseball;
When I was doing my MBA (a decade ago), one of the principal theories on why corporations exist was 1) Shareholder Value creation (grow wealth for investors) and a notable second was 2) Stakeholder Value creation- creating jobs for societies, providing tax to countries, providing employees with stable employment and incentives, and of course creating monetary value for shareholders.
There were two ways you could raise money- debt or equity. Debt had the advantage of interest payments being tax deductible. Debt payments had to be met regularly. Equity had the advantage that equity holders were the last ones to be paid in case of closing the company down, which justified that rate of return on equity is generally higher than cost of debt. Dividend payouts to stockholders could be deferred in a low revenue year or due to planning reasons.
Or in plain English, over the long term borrowing money from share holders in lieu of stocks was more expensive than selling bonds or borrowing from the banks.
Hybrid combinations of debt and equity were warrants and debentures that started off as one form of instrument and over a period of time gave much more flexibility and risk safety nets to both issuers and subscribers of capital. Another hybrid was stock options (now considered as a default option of rewarding employees in technology companies, but this was not always the case).
The use of call and put options in debentures, and the idea of vesting period in stock options was to promote lone term stability and minimize fluctuations in stock prices, employee attrition, besides of course to minimize the weighted average cost of capital. Venture capital was another class of capital known for both huge rates of return and risk taking (?)
But in today’s world where a Google has three classes of shares, companies trade shares before IPOs, and valuations of technology companies sink and rise by huge % over weeks (especially as they near IPO dates)- I wonder if traditional theories in finance need a much stronger overhaul.
or do markets need a regulatory overhaul, that would enable stock exchanges to have once more the credibility they had as the primary sources of raising capital.
Who will guard the guardians? Their conscience- the regulators or the news media?
There are ways of raising money that are not evil.
But they are not perfectly fair as well.