I recently purchased a Google Play Music subscription, despite having 10^6 "pirated" songs on my HDD. Why ? Because they have a reasonable price, cool UI and artwork, convenience of listening anywhere, and the AI bot that helps me find new music I might be interested in. All of those things dont exist in pirate land.
There is also the argument that a large portion of those people would never have paid for your content in the first place even if it wasn't available for free through piracy, that most of them shouldn't even be considered a part of your customer base to begin with because they simply aren't willing or aren't able to pay for it.
So? If you make a product you usually pay a lot of attention to price it in a way that your target market can afford. The people that can't pay for it aren't supposed to get it for "free" (if you everyone accepted this logic capitalism as we know it would crumble). I say this as someone who pirates something every now and then but I don't have to pretend that I'm somehow righteous when I do it. I do it for the same selfish reasons everyone else does even if they like to pretend otherwise.
This is why companies like Valve practically ignore piracy altogether and instead focus on delivering as much value as possible to actual paying customers at prices they're willing to accept (focusing on exactly what you said smart businesses should). Contrast that to those companies that, blinded by the sheer number of people pirating their products, waste money and time in a futile effort to combat piracy by placing draconian DRM schemes on their products, that end up resulting in the pirated versions offering a superior user experience when all is said and done. A sweet irony if I ever saw one.
[1] I used to be a heavy pirate myself when I was in high school, but these days I regularly pay for content that's priced fairly and delivered in a way that's not user-hostile, and simply treat everything else as if it never existed in the first place.
I thought that it has been economically proven that digital goods such as mp3 downloads have zero value, since each additional copy costs the manufacturer 0.
I think standard economic thought defines value in terms of preferences.
Such that the value that something has to me is the supremum of how much I value any of the things I would give up in order to have it.
So, if I am willing to purchase an mp3 for $1, then I value it at at least $1. If I would also be willing to purchase it for $2, then I value it at at least $2.
If I value it at $2, and it is for sale at $1, then I would gain $1 of value in that transaction.
If the seller is willing to sell it at any price over $0.50 , then that is how much they value (not) selling it.
So then, in this transaction I would gain $1 in value, and they would gain $0.50 in value.
I think this is the standard way to think about it.
It's just that they're worth a lot more when corporations lobby governments to make copying them illegal.
How about the first copy? That cost "0" too?
If not, are you suggesting the first buyer pay full price and everyone else get it for free?
Steam is usually used as the example of how better distribution results in less pirating...but not all games are available through Steam or "as easily" obtained as through Steam.
Netflix is also a good example. Most people I knew who used PTP were:
1) In regions Netflix doesn't support or doesn't "properly" support (see: UK above)
2) Watching movies that weren't even available through Netflix.
With the death of "game demos" I pirate most of my games. I also purchase most of those games. If game demos were such a thing - the games I did not purchase were games I'd never have bought. Which is very consistent with the "typical pirate argument of trying to make themselves feel righteous".
There are (of course) people who will download for free because they can but the pirates who actually talk about pirating seem to always have other, "reasonable" motives. Bypassing DRM limitations, removing ads, to demo something/see if it is worth paying for, or because pirating is the only way to even obtain the material. They don't even have the option of paying for it if they wanted to.
How could pirating hurt sales if the person pirating can't even purchase the damn thing?
Yeah, not always, but very often. Everyone here is trying to downplay this, but I would say >80% of people (disclamer: pulled from my behind) torrent simply because it's free and if they can easily obtain it free rather than paying, then they will. The argument that people pirate because the paid options are shit, and if they were as convenient as torrents people would just pay for them, is rendered moot with the Steam counterexample. Content distribution is much more well advanced and convenient in games compared to movies, and people still pirate en masse.
Of course, all of us are really just talking out of our collective asses until we can cite figures from a study.