Clients Decide Worth, Not You
As part of a very good series on sustainable software, Gianugo Rabellino writes:
The market couldn’t care less about your developers’ kids in need of new sneakers or your VC craving about his next Lambo: the argument that someone has to pay for software development is one of the biggest straw man of Open Source – the market pays for value, and if you build very little, guess what, you won’t get more than peanuts.
This isn’t just limited to Open Source software or even software in general. Far too often people make the mistake of thinking that company expenses justify the price of goods and it’s simply not the case. Value to the consumer decides what something is worth and if that happens to be below the cost of manufacture that’s the company’s problem, not the consumer’s. If that means the company stops making the product, consumer’s won’t care because they’ve already decided to go without.
The base of this problem is the idea that everyone has the same point of view as yours, or that they can be made to care about your point of view. The reality is that they’re so busy dealing with their own point of view and the challenges that brings that they don’t have time or energy to care about yours too. This leads to a long line of misconceptions based on the same idea:
It costs nothing to reproduce software/music/digital goods so all companies should provide them for free. This is effectively the opposite point of view from Gianugo – the idea that it didn’t cost the company much to produce doesn’t inherently make it less valuable to consumers. Maybe you individually don’t value it that much, but if enough other people do, you’d better be willing to go without. Cost of production simply has no relationship to value for consumers.
The company had a bad year so employees get reduced or no bonuses. This might be important for the business to survive, but it doesn’t mean employees will be at all happy about it. If they did their best, met their goals etc, why shouldn’t they get rewarded for it, if they’d wanted to bear the risks of business they would have started their own. The key to understanding this is not to think that business should pay bonuses even if it sends them broke or that you can’t have compensation tied to overall company performance (e.g. stock options) but that employees view this from a very different perspective to your own and you need to make it worthwhile and justified from your employee’s perspective, not your own.
DRM restricts user’s rights. Not really, DRM reduces the value to clients but if they’re happy to pay it so be it. Consumers not only get to decide value, they get to decide what rights they want for their money too. Sometimes these rights get coded into law without the possibility of waving them, but not often. Many companies use the rights they offer as a key point of differentiation – car manufacturers offering longer warranties, stationary companies offer unconditional return policies, airlines providing more flexible tickets.
The key to successfully arguing for or against something is to understand who it is you’re trying to convince and arguing from their point of view. Arguing from your own point of view is just whinging.
September 29th, 2008 at 8:32 am
The key problem with DRM is that consumers do not want it at all, but they have no power to prevent it. Choosing not to purchase a product with DRM is not effective, because quite often there is no competition. The consumer rarely has no choice to buy a DRM-free version of the same or similar product… and it is getting rarer. It is being applied so pervasively and transparently that the consumer doesn’t really have a choice to opt out. Also, many people don’t understand DRM or don’t care or accept that if someone wants to screw them over then they will be screwed over. This reduces the ability for those who DO care to make a choice.
I guess the key point is that we are not being given a choice with DRM. The fear is that soon all digital products will have DRM, and we will be locked-in to it. From there, suppliers have leverage to further reduce the value prop, without being subject to market forces. Its being applied in a collusive manner, and the opt-out is something that has to really be fought for – competition alone does represent the consumer’s rights. I think that’s the key thing – this is a consumer rights and fair trading issue.
September 29th, 2008 at 10:48 am
A slight issue with your DRM analogies is that the consumer is not given a direct choice. With car manufacturers, you often get the choice to pay extra for a longer warranty. If you want to get from point A to point B, you have a choice of airlines and price vs flexibility.
If for instance you decide you don’t like the restriction on most airline tickets that you cannot change the name on the ticket, you can pay a lot more and get a ticket that will allow this.
If you want to obtain a certain piece of software that comes with DRM, and you don’t want the DRM, you are not given the option to legally pay extra to obtain software without it. However if you decide you must have the software without DRM, the most likely source is to obtain an illegal cracked copy, for which you pay nothing.
I’d say that if we’re using analogies, this is closer to stowing away on a plane to avoid getting a restrictive ticket. However the risk/success ratio is much more in your favour with software piracy.
September 29th, 2008 at 5:29 pm
I think you’re both missing the key phrase “or go without”. There’s no requirement for you to buy DRM’d stuff and no reason there has to be an alternative product available to make the argument work. The simple fact that you don’t have to buy DRM’d stuff is the option you get. So if you don’t want DRM but your favorite new game only comes in a DRM’d variety you simply should choose not to play that game, simple and effective.
The other key point in here is that “clients” decide the value, with a strong emphasis on the plural. If there are enough people who are happy to accept DRM to make the market viable then DRM will stay around. If DRM is mismanaged by turning off servers etc people will be less welcoming of it in the future. In the mean time though, you individually don’t get to decide the overall value – you just get to decide if you want to go without or not.
I wouldn’t agree that DRM is being brought in via collusion, the closest to that would have been the music industry except that in nearly all cases you could go out and get a non-DRM’d CD and now you can get non-DRM’d downloads as well. True, they tried DRM’d CDs for a bit but the market reaction generally showed it to not be profitable and by and large it’s stopped now. I’ve not heard of another industry that’s come close to collusion with DRM. If you stand back and look at the market, consumer’s aren’t getting DRM rammed down their throats, they’re quite happily or ignorantly choosing to accept it. It’s not up to the seller to do the consumer’s research and they’re not misleading consumers either, consumers just aren’t paying attention which is their own fault.
To be clear, I don’t like DRM and don’t support it, which is why I either choose alternate products that are DRM free or simply go without. There are a couple of exceptions where I considered the overall value worth enough to justify putting up with the DRM but I did it knowingly.