
Chasing Pirates - Inside the Microsoft War Room - J3L2404
http://www.nytimes.com/2010/11/07/technology/07piracy.html?src=twr
======
kiba
_“Intellectual property is a critical engine of economic growth,” Mr. Finn
says. “That’s not just for large companies, but also for small businesses and
entire countries. We work with governments that are realizing this is in their
best interests.”_

Did you know that Americans were some of the largest pirate of British
literature back in the 19th century? It was even 100% legal too. The public in
America have cheaper access to British literature than the British themselves.
You can imagine what it did to American literacy rate. ;)

We also benefited from American conducting industrial espionage and British
immigrants that sneak out of the country so that we can jumpstart our own
industrial revolution.

Now the Chinese are doing the same thing to us.

------
ShabbyDoo
"and sometimes set up their own online authentication systems to give people
the feeling they have a legitimate product"

The fragment above is as close as this article's author gets to what I believe
to be the core economic argument for Microsoft's anti-piracy strategy. Someone
who would never think of spending $300 for a legitimate MS Office license
might pay $3 for a DVD from a street vendor knowing full well that the DVD is
pirated. People making such a purchase almost always know that they are not
buying a legitimate copy. These sales are only one small step away from just
downloading a copy of Office via torrent. What rationally must concern
Microsoft is when consumers pay tens of dollars for "discounted" software with
the belief that they are purchasing a legit license. That's likely lost
revenue for Microsoft (only "likely" because the consumer might not have paid
the higher price of a legit copy).

Imagine that I went into a diner where servers "self bank" (take cash payments
directly, usually using an apron with money pockets), pretended to be a
server, and presented customers with fake checks. The customers would pay me
and leave thinking that they had completed a legitimate transaction.
Obviously, the restaurant's top line suffers, but this sort of theft is worse
than if those same customers entered the restaurant with the intent to dine &
dash. Why? Because they probably wouldn't have eaten there if an armed guard
had been checking receipts at the door. So, the restaurant is out only its
marginal cost (probably just the cost of the food if seats were still
available, about 30% of the check on average across the restaurant industry).
So, while these two kinds of theft might seem identical on the surface, the
one where I pose as a fake waiter is over three times as costly for the
restaurant.

The market for fake designer handbags is similar. There are two categories of
fake goods: those designed to fool the buyer, and those simply manufactured
only well enough to convince the buyer that others will perceive the good to
be legit. Most luxury purses have internal markings (gilded logos, etc.) which
help identify the brand, but only to the owner (presuming that she is the only
person who actually sees the inside). If the buyer knows the purse to be fake
but desires to impress those who see her carrying it, there's little incentive
to pay extra for a purse with replicated innards. However, if a merchant wants
to sell a fake handbag for a good price to a buyer who thinks it legit, the
details had better match up with those observable at Saks. Handbag
manufacturers rationally spend most of their time going after those producing
the high quality fakes as those have an immediate impact on revenue. Unlike
Microsoft, there is also a strong incentive to attack the market for real-
from-a-distance knockoffs as the economic signalling effect of a $1K handbag
is weakened when the public computes the likelihood to be low of an arbitrary
woman with such a bag to be carrying a legit version.

I was disappointed by the shallowness of the NYT's analysis in the article.
Surely its readers expect a bit more depth?

------
bediger
I don't care to have a login for nytimes.com, but I did notice that the word
"Microsoft" gets a big, fat "TM" mark in the first sentence of the article.
For an article about pirates, not bad. But maybe someone with the patience to
read that monster can say if the NY Times stayed consistent and put "TM" on
every instance of "Microsoft"? Did they put an "(R)" on other possible
registered trademarks? Did they denote other uses of copyrighted material?

~~~
w1ntermute
Huh? What are you talking about?

<http://i.imgur.com/85d8G.png>

~~~
kiba
Perhaps NYTime is conducting an A/B experiment to see which readers make more
money.

So one guy get a registration link, the other guys get to read the article.

~~~
w1ntermute
I actually made an account, so that's why I have direct access. You can also
circumvent the issue with the BugMeNot browser extension, a referrer modifier
extension to set the referrer to google.com, or by searching for the article
title on Google and then clicking through.

Either way, I was referring to the "TM" thing, not to (not) being able to log
in.

