Exactly.

You know an hidden assumption in the music/book/movie complaints about piracy is that they assume piracy is free. But finding, downloading, transferring, and then using pirated materials has very real actual and opportunity costs. The only reason large numbers of people pirate music and movies is that the costs imposed by the producers are often significantly higher than the opportunity and actual costs of downloading from a filesharing network.

For example, say I want album X in MP3 format. Finding album X in the format I want at the bit rate I want is nontrivial. Downloading it and organizing it (since so much music offered on filesharing networks has non-existent metadata) is an additional cost.

If I could download the album for $5, the costs of downloading would be significantly higher than going out and stealing it. But once the album costs me $20, the situation is reversed.

That’s the real secret behind Baen’s success IMO. The low cost plus lack of DRM means, frankly, it is cheaper for me to buy it from Baen than look for those books on some filesharing network. Moreover I have that positive experience I have with Baen makes me feel less like some point on a spreadsheet at some megacorp and more like buying a book at a traditional bookstore or con, which I almost never feel buying ebooks anywhere else.

Bottom-line dollar is not the deal-breaker for most people. I think the issue is ‘how easy and pleasant are you making it for me to get what I want at a price that is reasonable to both of us?’ My Mac is the single most expensive item I own, but I would do it again in a minute even though there are cheaper options, because I liked the user experience. I also bought my Doctorow print books in part because I respected what the author was doing in the e-world and wanted to show my support. If the author in question was a total jerk who made me pay 5 cents every time I visited his website, I certainly wouldn’t be supporting such a business model. Better for the author to gain a fan base, even if that means judicious use of a freebie or two, and make people feel like part of a community they want to participate in.

That would be the royalty called a tithe. (Satan get behind me!)

The thing about pirated ebook is they’re not as reliable as other forms of pirated media. Many are, in fact, simply OCRed scans that have varying degrees of accuracy (I’m just speaking hypothetically of course! I assume that this is the case.)

Books-for-a-buck is a great idea…hell, Baen’s pricing model is excellent. For everyone else, the cost of finding the book in an acceptable format and then paying for it is typically higher than just finding someone who is filesharing the book.

A – ’substitutes for purchasing’ – classic piracy; addressable through existing law (e.g. allofmp3) for commercial piracy, addressable though DMCA take downs for YouTube style collaborative sharing. These steps break fragment piracy and should greatly stunt it. This should leave something like the ‘lend the book you liked to your father’ sharing, technically here you are left with a copy and thus violate copyright law – but the economic effect is probably similar to lending it.

B – ’sample before buying’ – maybe this is even a benefit, from studies it seems the jury is still out here.

C – ‘hard to find / out of print’ – as paper is taken out of the equation this should naturally disappear, converting to A or B.

D – ‘free (libre) content’ – applying DRM to public domain works – is that a kind of piracy? locking people out of their own property?

We should in general be careful about letting computer code manage law – how often does tech go wrong? In the US Fair Use is some complex 3 (or 4) aspect ‘test’, there is no way code can do that so DRM says ‘no fair use’.

One of the comment is actually quite interesting:
“What idiot thinks Kindle doesn’t support ebook standards?

Mobipocket and Kindle support OPS 1.0, the official ebook standard since 2000. It will also support OPS 2.0, the official ebook standard since 2007. OPS 1.0 is a standard for files to be converted into ebooks using Dublin Metacore data, an XML schema, and so forth.

It also supports conversion from Word, RTF, Simple HTML, and PDF (beta) but you’re saying Amazon should sell devices that it’s not easy to convert things into?

That worked so well for Sony…”

I answered to this person (it’s signed “Some guy”) that the Kindle cannot be considered like a device that support current e-book standards. But don’t you think that this comment sound like someone from Amazon (or Lab126) ?

I established my business on the theory that books should be sold at an affordable price and that eBook technology offers significant savings that can be passed to readers. But affordable shouldn’t have to mean completely free.

As you know, and as Apple is trying to show, lack of DRM doesn’t have to mean free content. DRM is designed as a mechanism to enforce, through technology, copyright law (at least that’s its ideal form). I’ve used the newspaper analogy before but I’ll trot it out again. In the old days, before technology, newspapers used to sell in open machines. You’d put in your dime and take a paper. Some were stolen but most people paid for what they took. I like to think we can move there with eBooks, too.

Rob Preece
Publisher, http://www.BooksForABuck.com

The economics of recorded music are fairly simple. Marginal production costs are zero: Like software, it doesn’t cost anything to produce another digital copy that is just as good as the original as soon as the first copy exists, and anyone can create those copies (meaning there is perfect competition and zero barriers to entry). Unless effective legal (copyright), technical (DRM) or other artificial impediments to production can be created, simple economic theory dictates that the price of music, like its marginal cost, must also fall to zero as more “competitors” (in this case, listeners who copy) enter the market. …

Eventually, unless governments are willing to take drastic measures to protect the industry (such as a mandatory music tax), economic theory will win out and the price of music will fall towards zero. …

When the industry finally capitulates and realizes that they can no longer charge a meaningful amount of money for digital recorded music, a lot of good things can happen.

Although Arrington’s comments are about the music industry, I think that he would perform a similar analysis and make similar claims about the market for e-books.