I’m going to go a little bit off of the beaten path here and talk about something not directly related to personal finance, but something that has a strong indirect relationship: piracy of intellectual property.
A week barely goes by when a person writes to me asking for some sort of justification for their piracy of music, computer software, or other electronic materials. I usually don’t give it to them because I feel pretty strongly that piracy is wrong and that content creators (and all of the people that help that process along) deserve to be paid for that work.
However, I also believe that the biggest reason piracy thrives online is that most of the time it’s easier to just pirate a song or a piece of software than it is to pay for it.
Case in point: recently, the “Humble Indie Bundle,” a wonderful collection of computer games, was made available for a stunningly low price online. You could simply pay whatever you wished for it with the minimum price of one cent. You could also direct any portion of that price to charity.
What happened? There were people actively pirating the “Humble Indie Bundle.” Rather than giving a single cent to a charity to download it legitimately, they chose to simply steal the software.
Why? It’s easier.
That’s my explanation anyway.
In order to download the software legitimately, you had to fill out forms. You had to decide how much you wanted to pay the developers. You had to decide how much you wanted to give to the charity. You also had to have some sort of method for actually paying for it, whether it be a credit card number or a PayPal account or something else.
And that’s the problem. Some people aren’t comfortable sharing their credit card information with a random website or with Paypal, and I don’t blame them. I have much more concern with giving a dollar to a website for something that I do with giving a dollar bill to a street vendor. That dollar bill doesn’t have my personal information attached to it and it doesn’t make it possible for that vendor to swipe my identity. I also don’t have to put forth the effort to take out a credit card, type in the sixteen digit number, the expiration date, the code on the back, or any of that other stuff.
That’s a lot of effort for making a purchase. It makes me reconsider purchases all the time, both from an effort standpoint and from a personal information standpoint.
Piracy is a real problem. Software piracy alone cost $51 billion last year, and that doesn’t include a dime of the piracy of music or movies or books.
From my perspective, a lot of that loss would vanish if downloading a song or a movie or a piece of software was as easy as pirating it. If one could simply purchase such things with just a few mouse clicks without sharing personal information (beyond perhaps a single place), much of the reason for piracy would go away.
Most pirates don’t believe that the content creators deserve nothing for their efforts. Instead, they believe that content sellers often make it difficult and privacy-invading to purchase such content. I agree with that sentiment strongly, even if I don’t agree with their action in response to it. Instead, I usually just don’t buy, which also hurts the content creators.
Online piracy will always have supporters until buying electronic items becomes as easy as giving a $5 bill to a hot dog vendor. It’s not there yet.
How can we get there? A standardization of online currency would be a big first step. Since no one trusts a corporation to do it, I think the best operator of this would be a non-profit that keeps the costs as low as possible instead of trying to turn a buck on it. A U.S. Online Mint, perhaps, where you could convert real currency to virtual currency and back, perhaps at your local bank, and then spend it as easily as cash.
This type of thing would be a revolution in how we use money.