[jcl]

Well, it's not quite that black-and-white. DRM and copy protection has always been broken and copyright laws have always been hard to enforce, so people have always been able to get what they want for less than the asking price. Every IP-based enterprise's business model has been broken for years; Bill Gates' Open Letter to Hobbyists shows his company's model was broken even before it started.

If people had no internal motivation to pay for something freely sharable, all these companies should be begging on streetcorners. And yet Microsoft, Disney, and Warner Bros. are far from charity cases.

I think that while people are aware that copying is not the same as stealing a physical object, they are also somewhat aware that it deprives the creator. In this sense, it's not unlike how people guiltily shuffle off as a street performer passes the hat around: they are aware of the expectation of payment, of the social obligation to reciprocate when someone gives you something of value, even if that thing is intangible and cost little to produce. This social obligation is enough to cause some people to pay.

Software benefits from other unwritten social rules as well. For example, it is less socially acceptable to pirate software that you use to make money. Likewise, it's less acceptable to give pirated software as a gift. I think the strength of these social rules varies among cultures, which would explain why piracy is more popular in some countries than others, even when the goods are affordable.

And software further benefits from the unknowable costs associated with piracy. If a pirated product doesn't run, has a bug, or installs malware, you have no recompense. And, of course, there's the fact that piracy is illegal... If someone can prove you pirated software, it will cost you (it's admittedly hard to prove for individuals, but easy for corporations with disgruntled employees).

So the software business model is tenuous in that it relies mostly on social norms, but it is viable.

[krig]

I agree with your point, but let me clarify what I mean: I don't mean to say that people are averse to paying for content they want. On the contrary, I do think most people are happy to pay what they feel is a reasonable price for things.

The thing though, is this: Once I've bought something I wanted and I have it, and it's infinitely sharable - why not share it with my friends, or even just anyone who might want it? That's where I think the real issue lies. I don't think most people see anything wrong with sharing something when it costs them nothing to do it. To the contrary, I think people in general are social and caring, and even desire sharing with others when possible.

Also, I think people are happy to pay someone for creating or providing goods they want. I don't think many people want to pay for copies of digital content, because single digital copies truly are worth nothing.