Back to software "profitable piracy": the role of information diffusion

Can software piracy be profitable for a software editor? We tackle this issue in a simple model where software is an experience good and where the potential users can choose to adopt or pirate software or to delay their adoption. In that context, we show that a moderate piracy can be profitable for a software editor to foster users' adoption.

Back to software "profitable piracy": the role of information diffusion

Can software piracy be profitable for a software editor? We tackle this issue in a simple model where software is an experience good and where the potential users can choose to adopt or pirate software or to delay their adoption. In that context, we show that a moderate piracy can be profitable for a software editor to foster users' adoption.

Piracy of Digital Products: A Critical Review of the Economics Literature

Digital products have the property that they can be copied almost costlessly. This makes them candidates for non-commercial copying by final consumers. Because the copy of a copy typically does not deteriorate in quality, copying products can become a wide-spread phenomenon – this can be illustrated by the surge of file-sharing networks. In this paper we provide a critical overview of the literature that addresses the economic consequences of end-user copying. We conclude that some models with network effects are well-suited for the analysis of software copying while other models incorporating the feature that copies provide information about the originals may be useful for the analysis of digital music copying.information good, piracy, copyright, internet, peer-to-peer, software, music

Impact of Network Externality on End-User Piracy: Revisited

We revisit the issue whether a strong presence of network externality in the digital products market could be a reason for the copyright holders to allow piracy. We find that except under a limited circumstance this is not true in a framework that involves IPR protection and copyright holder\u27s costly effort to prevent piracy. We further show that as the degree of network externality increases, the strategic piracy deterrence level of the copyright holder increases and the actual rate of piracy decreases

Aggressive Monetization: Why the Pay for Currency Model is Dominating the iOS App Store Today

The Apple iOS App Store has only been around for 5 years, and yet it has completely changed the way that mobile software is distributed. In this brief period, the online marketplace has seen dramatic shifts in the most successful strategies used by iOS software developers and, more specifically, game developers to gain revenue. As of March 14th 2014 fifteen of the twenty top-grossing iOS apps feature some form of in-app currency that users may purchase with real money, eighteen are mobile video games, and all twenty of these apps are free to download. This paper explores a new business strategy, the pay for currency model, which has been highly successful in generating huge profits from App Store software distribution. This paper first builds on existing economic models for network externalities to include non-paying customers and provides an argument for how iOS games with in-app currencies can achieve a form of first-degree price discrimination

Piracy Accommodation and the Optimal Timing of Royalty Payments

This paper generalizes the two-period model of Watt (2000) who demonstrates the possibility of optimal accommodation of a pirate when the royalty rate applying to a creation is uniform and second-period Cournot competition applies. Admitting nonlinear contracts with period-specific royalty rates that leave total payments unchanged, simulation analysis shows that a producer of originals does better to increase the royalty rate in period 1 and decrease the rate to a negative level in period 2, thereby more than offsetting the usual cost advantage available to a pirate. Watt's illustrative examples regarding piracy accommodation (but not piracy exclusion) are overturned when a nonlinear contract is chosen optimally, although accommodation remains optimal in some other cases. Further, where exclusion is impossible under uniform royalties, cases exist where exclusion is feasible under nonlinear royalties. Even so, accommodation may be a preferable strategy.accommodating copyright piracy; nonlinear royalty contracts

The Profiles of Software Pirates among Tertiary Institutions in Singapore

The study seeks to examine the perception of software piracy as well as to discover its underlying factors among Singapore’s three university communities. Some five hundred responses were gathered from students and staff. By means of cluster analysis and factor analysis, the results identify three clusters of pirate profiles as influenced by factors such as attitudes towards software publishers, general acceptance, convenience, and ethics. The decision tree method links each pirate profile to demographic and computer-related variables. It shows that while age is negatively related to software piracy, computer experience and computer usage demonstrates an ambiguous relationship to software piracy respectively. Further, the undergraduate students tend to be pirates more often than university employees, and the Malays tend to be less frequent pirates as compared to other races. It is hoped that the study will help the relevant policy makers to develop better strategies to protect and to enforce the intellectual property rights among the universities as well as in an increasingly knowledge-based economy such as Singapore.Software Piracy; Software Policy; Protection and Enforcement of Intellectual Property Rights; Cluster Analysis; Factor Analysis.