I'll start by saying yes. Most of us. But it's not really our fault.
First of all, for all you bleeding hearts out there, do you really want to tell me you never used a pirated copy of a software because paying 50$ for a single use seemed way too much? You never downloaded an MP3 of a song you really liked because you didn't want to pay for the whole CD? Downloaded the episode you missed of your favorite series? Or maybe just jail braked your iPhone/iPad/PS/Wii…? You probably see where I'm going with it. We've all been there. And yeah, this makes us thieves. While we're paying for anything that we can feel, somehow it looks OK for us to steal something that's virtual but maybe took much more time and effort to produce than the tangible goods we're used to buy.
I say it's not our fault. If you don't mind I'll focus on the software industry but it's the same in the music industry, movies industry, mobile apps, etc.
For years now software publishers have made everything they can to keep us away from paying them. Long registration forms, giving away our payment credentials to yet another publisher, serial numbers, selecting the right version and it goes on and on. And, on top of that, the irrational price that has no proportion to how we're going to use the software. Why should I pay a backup utility 50$ when I'll probably use it once in a few months? It's not like I'm sitting all day long backing things up and then restoring them…
So, publishers saw that we just don't pay for their software however we do use it. This fact made them come to the amazing conclusion that we use illegal copies. And what did they do next? Started spending tones of money on the best copy protection, bullet proof, can't be pirated licensing. But guess what? That didn't work. So they started looking for other places to bring money from. From affiliate programs to toolbars to ads and what not. Making money from everything they can install on the user's machine except of their own software. The installed software became a channel for the user's machine.
Even though we're at the 21st century and SaaS is becoming really popular we still barely see software publishers that understood that to get users buying your products you need to be nice to them. We, at Licensario, offer a different approach. We think that software publishers should stop wasting resources to find new ways to say NO to users. Instead, we say, go ahead and say YES to your users. What do I mean by that? I started this post by saying that publishers made it really hard for us to pay. It's time to ease the process. Make it dead simple to pay. Be nice to your users. Offer them flexible payment plans. Offer subscriptions. Offer payments for usage (pay-per-use). Don't let your users go wandering in a website for the suitable version, do it in-app. License your features or at least make it simple for the user to understand what she's paying for. Use micro payments. And don't ask them for their credit card. Users should have one account for all software content – across platforms.
This model works. Guaranteed. Apple already proved it with their app store. SaaS has proven it.
We will not stop piracy. Neither do SOPA and PIPA. I wonder if anyone can. But it's definitely possible to raise the buy rate. If buy rates are higher in the gaming world where people are willing to pay for virtual goods such as swords or the best sheep in town why can't it be with software? Software publishers should treat their features as virtual goods and people will pay for them when they need them the most. Just give them the option and be kind. You'll be surprised on users' willingness to pay:
Public opinion strongly favors intellectual property (IP) rights: seven PC users in 10 support paying innovators for their creations to promote more technology advances.
I added a poll at the end. Maybe it will shed some more light of what makes it easier for people to pay for software, apps or any digital content. I'll appreciate if you'll answer it.
If you like this post I'll appreciate if you'll like or follow Licensario.
- Five ways Software as a Service could help your business (simplybusiness.co.uk)
Sometimes it really is a hassle buying software. Some time ago I wanted to buy Windows7 online, since prices in the US seemed reasonable, while at stores in Israel the price was double. After a bit of searching, I finally got a message saying that from my location, I have to buy from local vendors, and that was it. Needless to say, MS (or any of their local vendors) didn't get money from me that time.
For small purchases, such as you offer, I'd definitely go with a single user to pay for everything. Now I have to ask – how would that be different than using Paypal?
Thanks for commenting.
The keyword of how we differentiate ourselves from PayPal is licensing. When you buy software, even if through PayPal, you will still need to register at the publisher's website, choose the suitable version, get the serial key, get back to the software and so on. As for the publisher, within one line of code, gets licensing, billing, usage tracking, the ability to sell in subscription and pay-per-use and much more. Do you see a publisher gets all these benefits when just integrating with PayPal or recurring billing systems? And one last small thing. A publisher will want to integrate with more payment systems and not just PayPal. with us, he gets it out of the box. Clear enough? :)
I think so. Sounds like a good idea. :)
Hope I get to use your product some time in the future!
Thanks for your feedback. I'm sure you'll use our solution sometime :).
The real killer feature in your list is micropayments, that's the one you really need to enable. Micropayments will be the way that all online goods will be paid for, whether software services like the ones you are dealing with or podcasts, online videos, news, wifi, basically any online service. The fact that we still don't have micropayments after 20 years of the web is a testament to the great apathy, ignorance, and stupidity of those in software, no two ways about it. Hopefully, you can make it happen but if you don't, I will someday. :)
I'm happy you love our solution. I think that all we provide together (and not just micropayments though they are very important) will lower the motivation for piracy. Piracy will always exist but we believe (and we see it) that piracy can be lowered by giving your users flexible and proportional to the value pricing.
I agree that better pricing will deter piracy for many, but as you said in your original post, it won't stop it. That genie is out of the bottle and a willing pirate can never be stopped. However, there are other solutions other than just pricing- not DRM, which is just a dumb idea- so I don't think piracy will be much of a problem soon enough.
Although part of the problem is definitional: when they still used to print paper books, I used to borrow some books from a friend when I was a kid. If the same guy now rips his Blu-Ray to a portable hard drive, throws away the Blu-Ray so there is only one copy, then lends me the hard drive, I think he's technically considered a pirate these days. So the move online blurs a lot of the old borders, nuances that people don't always consider.
Piracy will always exist and people will always find it hard to pay for something virtual like software even if it will cost 1 cent. A revolution should start and freemium must die. If everyone will take money for their services, and with the move to online services, people won't have a choice but to pay for the software they consume. But I guess there will always be companies like Google that will keep their services free, conquer the market and leave all of us out of business…
I don't know that people find it hard to pay for virtual goods like software: desktop software still commands high prices, hence the outsized profits of Apple, Microsoft, Oracle, etc. The problem is that online software has become a race to the bottom, just as Dmitri lays out in your linked blog post. A revolution will start once someone actually builds out an easy-to-use micropayments service. But the key is ease of use, I've used previous services like BitPass and it made you click way too much for what were small 25 cent purchases. I wouldn't blame the users, the fault lies with the technologists.
Why isn't there a good, almost universally-accepted online payment solution yet? Paypal could have done this, but they've been content to stay in their eBay niche. Why isn't there a common single sign-on solution for the web yet? Instead, everyone has to remember logins for every site they go to- which means they often use the same password everywhere, a security nightmare because all a hacker has to do is break into one low-security webapp and then he has your online banking password too- or have their browser remember for them. It is amazing how technologists cannot even get these basics implemented, so it is understandable how a potentially simple and amazingly powerful service like micropayments still hasn't been done.
As for Google keeping their services free or VCs funding free user grabs that go nowhere, they're pretty irrelevant as they are all clueless about what services will be important in the future. Google subsidized Google Checkout and that has been an abysmal failure. They basically only make money off search ads, nothing else. When you observe the startups funded by VCs and their regular failure, you realize how clueless they are about what's coming. The only thing technologists have to fear from these "free" players is fear itself. ;)
I guess that a universal micropayments system can never exist in a world with so many big companies with different interests. Having said that I still believe that a mechanism that is close to that can be implemented and should be.