What happens if nobody pays for a copy of Windows 8? There won't be a Windows 9.
That would never happen unless MS charged an outrageous sum for it.
If any company finds itself in the position where nearly all of the users are pirating, then there's something wrong. They're charging too much or the DRM is too onerous, or something.
EDIT: if you charge a fair price and make something available, people will buy it rather than pirate it. Louis CK and lots of other people have shown this.
"EDIT: if you charge a fair price and make something available, people will buy it rather than pirate it. Louis CK and lots of other people have shown this."
There are two problems with this assertion. The first is that people's current working definition of a "fair price" seems to be $0.00. Are we really to believe that paying $1.29 on iTunes, or $0.99 on Amazon, for a DRM-free music track is "unfair"? Or that the user experience on either of those services is horrendous and painful? Come on. People pirate, in large part, because they prefer not to have to pay for something if they can get it for free. Let's be honest about that fact. If there's an impulse to "stick it to the man," so be it. I'll be the first to admit that the targets of this mentality -- the entertainment and software industries -- could use a good sticking-to. But let's not pretend that the moral-crusade argument is the sole -- or even the primary -- motivation behind most people's piracy of content. The primary reason is the price, i.e., zero.
Second, while I agree that Louis C.K.'s release shows promise, he seems to be an exception to the rule so far. Who are the "lots of other people" that have "shown" that charging a fair price leads to buying over pirating? Let's take the highly-touted example of Radiohead's pay-what-you-want release of their album "In Rainbows" in 2007. According to the post-release data, 62% of all downloaders of the album paid $0.00.[1] The next-largest segment, 17% of users, paid somewhere between $0.01 and $4.00. If Radiohead were not Radiohead -- i.e., not enormously successful prior to the release of the album -- then they'd not have been able to bear the razor-thin margin on the sale. Essentially, Radiohead gave the album away because they could afford to do so.
When Trent Reznor and Saul Williams released an album online that same year, in the Radiohead model, they gave users the choice between paying $5 and paying nothing. Approximately 154,449 users downloaded the album, and 28,322 users (about 18%) paid for it. At $5 per unit, that's a grand total of $141,610 in revenue for the album, and more likely than not, the production costs met or exceeded that revenue.
And those were hardly releases by big, onerous, anti-consumerist conglomerates, either. Those were pro-consumer, digital-friendly artists willing to put themselves out there to test precisely your proposition: that, if given the choice, people will pay. It seems that, by and large, they won't.
>grand total of $141,610 in revenue for the album, and more likely than not, the production costs met or exceeded that revenue.
Then the business model needs to change. $100K+ is way more than enough to produce an album with modern technology, and it's only going to get cheaper. Music doesn't make as much money as it used to, there isn't room for dozens of middlemen siphoning off the inefficiencies.
In retrospect, I have come to partially disagree with my own assessment. I did not account for the fact that Radiohead also released an $81 box set with the digital download, and that 100,000 loyalists bought the set -- earning the band a cool $8.1 million in addition to the revenues they earned from the digital download (believed to be in the ballpark of $3 million). When you factor this in, the band did very well for themselves. Not quite as well as they usually do on big-label albums (even after middle-men's takes). But for an experiment, I would call it a success.
What's fascinating about "In Rainbows" is that roughly 8% of the users accounted for approximately 80% of revenues from the site. That speaks volumes, and it dovetails really well with recent blog posts (linked here and elsewhere) about the new metrics of success in digital distribution: i.e., monetizing loyalists. A small core of loyalists who are willing to follow you to the ends of the earth are worth more than fairweather fans.
I'm actually contemplating doing a more in-depth analysis on this, Louis C.K., Reznor, and others in this space. While I believe the jury is still out, and I believe that most people will pay nothing if offered the opportunity, there are clearly those who will pony up -- and even those who will pony up big. Piracy -- or free acquisition, in this case -- doesn't seem to matter too much if the loyalists are there, and you can differentiate the product for them. (In this case, the notion of a "fair price" actually seems to be relative).
It's interesting how Radiohead seemed to succeed by recognizing this fact, whereas Reznor's experiment failed to account for it. And Louis C.K. avoided the free option altogether, which is another way to go.
You are not putting forth an argument against my statement. I said "a fair price" and did not include $0.00. Louis CK charged $5. Radiohead and Reznor/Williams let buyers choose. These are very different experiments.
Lastly, I was a huge Radiohead fan until their "In Rainbows" release. I thought it was horrible. After previewing the songs, I didn't buy/download it. I wanted to very badly, because I wanted the experiment to work. I think they did the experiment on that collection of songs because they knew they sucked.
While I understand and see your first point, I strongly disagree with your assessment of the album. It was one of their best, IMO, and critics and fans seemed to have loved it. Go figure.
I wasn't the biggest fan of "The King of Limbs," however.
That would never happen unless MS charged an outrageous sum for it.
If any company finds itself in the position where nearly all of the users are pirating, then there's something wrong. They're charging too much or the DRM is too onerous, or something.
EDIT: if you charge a fair price and make something available, people will buy it rather than pirate it. Louis CK and lots of other people have shown this.