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Pirated books are not really free when you consider the difficulty in finding a good copy of the book you are looking for. For most people, their time is also worth something, so the convenience of a good, easy to use online store that has clean, nicely formatted ebooks would be worth some amount of money. I think the Baen store shows this.
And while I also doubt saints are congregating here or anywhere else online, I still think most people are willing to pay for most of what they use. In other words, I think the overlap group is larger than 5%, but the vast majority of people will pay a reasonable sum for a digital product that is easy to purchase, easy to use, and has a value to them (i.e. they want to read, watch, listen to, etc. the content).
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