Piracy and cost

I haven’t been posting about the business side of film, but there was an article about apps for the iphone (or tablet) that got me thinking.

Before the music business was crushed by piracy, computer software was pirated on a regular basis.  In fact, software has always been pirated.  It’s an industry that grew up while being pirated.  I never bought Microsoft Word in my life, and I’ve used it since 1990, but Microsoft did pretty well in the 90’s.

Apps have come along and nobody appears to be stealing them.  I have no idea how difficult or easy it is to do, but the fact is that people are paying for them.  In my mind, there is really only one reason for that: they are cheap.  They cost, generally, 99 cents.  It’s not worth it to pirate.  Even the priciest ones are about five bucks.

Microsoft Word has always been hugely expensive, and it never made sense to me.  It’s always cost more than 150 dollars.  I would have gladly paid fifty for it.  If they had been charging fifty, more people would have paid for it and it could have been cheaper.  I’m sure they did the math and figured that they made more with the 150 dollar sale than with more 50 dollar shares, but the fact is that it was pirated because it cost too much.

Itunes charges 99 cents for music and, amazingly, people are buying music again.  This, after years of getting it for free.  It’s still available for free, but it’s slightly easier to do it legally, and 99 cents seems like a fair price to keep the musicians alive.  And you’re not breaking the law, which always feels nice.

Films haven’t figured out their price point yet.  Rather than go for the cheap seats, they’re trying to squeeze extra money out of us by going 3-D.  It’s true that there is a value for a film that may be diminished by charging less for it.  But getting it for free, and it’s fairly easy to get a movie for free, devalues it 100%.  Why not make films more affordable?  Surely a DVD doesn’t have to cost 15 bucks.  Downloading legally has to compete with illegal, but legal downloading can compete.

But even without this, look at the huge software industry which manages to survive even with piracy and still has plenty of high-priced software.  Piracy of films has been around for a long time, at least since VHS ruined the sales of E.T. in England before it came out there.    It’s bad, but it’s not as bad as, say, Tower Records going out of business.  That’s a bigger problem with much tougher solutions.

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