Software Piracy and violation of IPR (Intellectual Property Rights) is the biggest problem faced by industry today. Duplicate CDs and DVDs of popular softwares, movies and music hit market faster than original one. Because of piracy, companies and artists won’t get their due royalty, which they otherwise got had the genuine product been sold. This in turn limits industry’s monetary profit and reduces their ability to come out with quality products next time.
I intend to put my views in this blog, as to what can be done to prevent privacy.
The sole reason piracy has become a menace is cost advantage. If cost is cut (it can be cut, without hitting profit, I’ll illustrate how), most of the piracy can be wiped out.
Genuine copy of Microsoft Office 2007 costs around Rs 16000, an amount more expensive than the whole computer itself. While pirated copy is sold illegally for less than Rs 200. While I have full respect to Mr. Gates and his team of highly qualified Software Engineers who’ve come up with Office 2007 application, where they fail miserably (in my opinion) is marketing the same. For every genuine copy that’s sold at MRP there’re hundred copies which are sold illegally. The cost difference between pirated and original copy is just too high and tempting for individual customers to go for illegal option. IF I pay 20k for original product I’ll be compensating the company on behalf of hundred others who bought illegal copies. As an individual I’ve no interest of doing this and may prefer not to buy the original one.
What I said for Office 2007 also applies for other softwares, movies and music.
What can be done?
For developing a product, a sum of Rs.1,00,00,000 is spent. Company calculates that it can sell 500 copies of the product, hence to recover investment and make profit, each product should cost Rs. 10000000/500 = 20000. It may be true that at 20000 a copy 500 copies will be sold (and 50000 will be pirated), but what’s ignored is the fact that had the price been Rs.200, 50000 copies would have been sold. (Please note that the cost of media (CD/DVD), packaging and distribution cost are negligible compared to cost of the product), This way company can recover its investment and make profit.
It is something companies need to decide as to how they want to achieve brake even: By selling few CDs at huge price or by selling thousands of copies at low price. Moserbaer India has launched a new scheme of selling VCDs and DVDs at around 28 and 34 Rs [details], with a similar objective of eliminating piracy...
90% of people who go for illegal copies due to financial reasons would be willing to buy legal copies if the cost difference is brought down. Even if legal copy costs twice illegal one it makes sense buying the legal one considering the fact that they come with peace of mind, tech support and warranty of genuine product. When there’re no takers, piracy gets automatically wiped out.
Another reason why prices are not cut down is because of corporate customers. Most of the incomes for software application development companies like say Microsoft come from other corporate houses, which are forced to pay hefty license fees. While corporate houses will pay (and can afford to pay) expecting individual customer to pay thousands of rupees will force him to look for other options.
Same for movies and music: Sale of genuine DVDs will shoot up if they’re priced around 100 Rs instead of say Rs. 500+. (Blank DVD-Rs cost less than Rs 25 under bulk purchase, and this is a viable solution)
Its high time industry considers my advice (No payment necessary, this consultancy service is offered free of cost to honor intellectual property rights of artists and software companies).
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