One of the largest costs of any publish house is the advances they give authors.
Take away these advances, and you take away quality, and hurt authors, whose art you are appreciating when you read (even a trashy) a novel or whose work and research you are getting the benefit of when you read non-fiction.
So in short, the stuff still has to cost at least 60% of what it costs today, if not more, just to cover this.
The culture of piracy says, "I don't want to pay some fat cat." In the end, the fat cat, at least in book publishing (and to a great extent in music production) improves the quality of the work significantly. This culture has to change.
Ideas:
1) Clear up definitions of ownership when it comes to IP. This would require some legal changes. Make it so IP ownership is for content, not media. This may hurt Blu-Ray sales, but it will help change the culture, which in the end will increase overall sales. This type of ownership may end up looking like a (transferable? I doubt it) license. That's OK. I "own" Microsoft Office, even though I technically "license" it.
2) Eliminate DRM. This doesn't deter piracy, and only hurts consumers. It's a stupid idea. Music figured this out. Movies and Books need to figure it out.
3) Make the legal ramifications for piracy severe. Enforce the criminal code. Through some torrent users in prison and that will shape up the college kids.
4) Make stuff cheaper. Separate pricing for media / content is one way to start (like ebooks). For example, I buy a Book. It is $15 for a license+hard back physical book, $10 for a license+softback, $8 for a license only, and I can download it. Selling the physical copy can only be done if the license to the content is sold (resell of license and content would be required to make DawnFalcon and other property rights advocates happy. I would be happy making resell illegal).
5) Encourage PARENTS to teach their children that theft of IP is wrong. Encourage teachers that it is wrong. Encourage Police, Fire, and Elected Officials to say it is wrong. And most importantly, encourage artists to say it is wrong.
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