What kind of software is this, please give me advise!

Andrew Dalke dalke at ks.uiuc.edu
Sat May 4 00:45:40 EST 1996


In a bizarre fit of financial ignorance wizkid at sirius.com babbled:
> Don't buy anything from the software companies! $500 for Pagemaker or 
> Adobe Photoshop. All we pay for is the damn advertisting that they do. 
> Support pirate software!!! They blame that they lose money from 
> pirating. yeah right. Look at how much they make. people can't affored 
> to buy 5 disk for $500. Damn software manufactures rip us off, and we 
> let them, what a joke!!!

Ever hear of economics?  A budget?  Since you are a "kid", let me give
you a simple lesson:

  1) To give you an idea of the costs involved in software publishing,
we produce software (it is free software, paid for by a grant from
the US National Institutes of Health).  We have 1 1/2 programmers and
support staff.  We spend about $125,000/year in salaries and overhead.
  We only advertise by our web site and usenet.  During the last year
we have had about 800 downloads, of which about 100 are users (others
found that the progam wasn't useful for their work).  Hence, if we
required payment, it would cost $1,250.

  Please point out to me where the advertising cost comes in and
how we can reduce our costs by advertising less.  I'm sure our
funding agency would love to learn about this idea.

  2) there's this thing called "supply and demand".  If Pagemaker isn't
worth $500, why buy it?  Since it is being sold for $500, obviously,
someone is buying it.  You could always do your layout with scissors and
glue -- maybe $20 total!

  3) Another priciple - "economy of scale".  If more people buy software,
the overall price can be reduced, especially since producing another unit
of software is cheap.  If you thives didn't steal the software, more would
be sold, and the price to you lessened.

  But you may be right.  If thieves like you would never actually
buy software at any price, then the companies wouldn't loose money
to you.  On the other hand, how many thieves are opportunistic and
would have bought the software if they didn't scam it from someone else.
If there is even one, the company lost money.

  4) there's this thing called a "free economy".  If software publishers
are ripping you off, make your own version of the program and undersell
them.  You'll make money selling cheap and useful software.  Of course,
that would be joining the system, wouldn't it -- so make better software
and give it away free!  Choice of the GNU generation.
   But of course, you've probably never written anything more complicated
than "Hello, world" or a class project.  If you had, you would have
known how much time was needed to make a good commercial product
and wouldn't have rushed to support your neighborhood crook.

  5) This is a different form of economics.  Laws against illegal
copying of software are slowly coming into effect, and companies
are becoming more savvy at figuring out when their software is
being used.  
  Imagine the days when your computer is always connected
to the net, and every 100th time you start a program, it contacts
the main server for the company.  If you aren't registered, you
get this nice letter from their attorney.  Think something like this
won't happen? It already does.
  The economics here is the tradeoff in "free" illegal software vs. 
a fine or jail time.


						Andrew Dalke
						dalke at ks.uiuc.edu




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