Some 'piracy' is good

From the ever relevant The Long Tail site Ray Lawton argues that not only is piracy inevitable, but it is actually beneficial.
...I was chatting with a former Microsoft manager the other day and he revealed that after much analysis Microsoft had realized that some piracy is not only inevitable, but could actually be economically optimal. The reason is counterintuitive, but intriguing.
The usual price-setting method is to look at the entire potential market, from the many at the economic lower end to the few at the top, and set a price somewhere in between the top and bottom that will maximize total revenues. But if you cede the bottom to piracy, you can set a price between the top and the middle. The result: higher revenues per copy, and potentially higher revenues overall.
...piracy helps seed technology markets, and can be a net benefit. Especially in fast-developing countries such as China and India, the ubiquity of pirated Windows and Office have made them de-facto national standards.
I think we see over and over that technology is rarely the solution to stop criminal behavior. DRM doesn't stop real pirates, just the casual copiers. And as the darknet paper indicates, with DRM you will sometimes force people to use these tools to pirate something they can't get otherwise, and like a gateway drug, will introduce these people to the darknet and other media that they might have paid for.
There are parallels in life:
  • Cops stopping speeders is far better than radar traps, for example. This is because cops will stop bad drivers, radar traps only fine speeders, and way after the fact. And these radar traps don't take into account that the highway was clear or that your wife is in labour, etc.
  • Video surveilance doesn't stop criminals as well as cops on the street do.
  • The idea of putting speed limiters on cars may work but who would want to buy a sports car if all cars have such devices?
  • DRM will punish customers and do nothing to prevent copyright infringment. See this boing boing article for a recent issue with DRM and Windows Vista.

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