Linked by Thom Holwerda on Mon 1st Mar 2010 21:59 UTC
Multimedia, AV "A lot of commercial software comes with H.264 encoders and decoders, and some computers arrive with this software preinstalled. This leads a lot of people to believe that they can legally view and create H.264 videos for whatever purpose they like. Unfortunately for them, it ain't so."
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RE[5]: Greed
by mkone on Wed 3rd Mar 2010 00:14 UTC in reply to "RE[4]: Greed"
mkone
Member since:
2006-03-14

...This is the precise logical disconnect with IP laws. How exactly does artificially restricting and penalising users create value or reward anyone? The fact that there is no value added for users in the first place is the precise reason why there needs to be more and more draconian laws. Once the initial investment in research effort has been paid for, under what perverse moral code is it still valid to fleece users thereafter?...


You are making the mistake of equating value with price. The two are not the same. Not by a long shot. The value of a copy of software differs for different people. Think of the value of a copy of software as the maximum amount one would pay for it if that was the only way one could acquire the software. The price is normally set at the level at which profits are maximised.

Now, in economic theory, you have a downward sloping demand curve because at lower prices, more people will purchase the product because the perceived value of the product equals or exceeds the price.

In economic terms again, those who value the software highly get a larger benefit because the value far exceeds the price. This is known in economics as the consumer surplus. What the artificial scarcity does is allow the producer of the software to capture more of the consumer surplus, and this is a valid way to encourage creation of such software works. This is the thinking behind copyright laws in general.

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