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Old 10-14-2011, 10:29 AM   #204
Harmon
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Quote:
Originally Posted by SmokeAndMirrors View Post
If most cell phones were like that, I'm sure there's be a large black market for cell phones.
You have put your finger on it. What we call "piracy" is nothing more than a black market which has come into existence because the normal economy has been distorted.

Usually, we think of a black market in terms of scarcity and high pricing, and there's an element of scarcity in the "piracy" market. Some books are simply not available as ebooks, so people go to the black market to get them. Some aspects of the black market have to do with functionality, as you point out. It is easier to go to the black market to get a DRM free ebook, as opposed to figuring out how to strip the DRM from a legal copy.

But what is different about the "pirate" version of the black market is that the goods on pirate black market are usually cheaper than those in the normal market, frequently to the point of being free. Normally, such goods are more expensive.

The existence of a black market signals that the normal economy is not functioning optimally. If publishers stopped using DRM, the black market would continue to exist but would be smaller. There would still be a pricing issue.

The pirate black market is a bizarre form of the usual black market, and the question is, why? Nobody is making money off of the pirate black market, at least not directly. Whoever heard of a black market which gave away its goods? Yet here we are.

I believe that what publishers and resellers (except Amazon) don't grasp is that what they are selling is not books, but the convenience of acquiring books. Because of DRM, and misspricing, publishers and resellers actually make it more convenient, economically and practically, for some books to be acquired from the black market. Eliminate DRM, and at least some portion of the black market will become inconvenient, and so customers won't go there.

Last edited by Harmon; 10-14-2011 at 10:33 AM.
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