Written by David Tebbutt, MicroScope 08/83 item 02 - scanned
SOFTWARE ISN'T MADE BY MAGIC (column)
A certain well-known microcomputer journalist recently described me as being subject to the occasional frothing rage. Since he didn't mention me by name, I won't mention his name either. Suffice it to say that he occasionally writes inspired prose which is very highly regarded both for its news value and its entertainment content. He's not a bad old stick but the frothing rage episode highlights one area in which our views differ. It is on the subject of software copying or, if you prefer me to be emotional about it, software piracy.
As you must know by now, I eke out a living by publishing computer programs so this particular subject is very dear to my heart. There's only room in one Reflections to comment on one or two points made by my journalist friend so here goes. If you fancy pitching in with your own views, for or against, the Editor will be happy to publish your letter.
One day (the day of the aforementioned rage) my friend mentioned to the readers of a weekly magazine how easily they could copy one of the programs I publish. He added that disks only cost a few bob and manuals weren't that much more expensive to produce therefore, for just a few pounds, a publisher could create something which could be sold for tens or even hundreds of pounds. On the other hand it could be copied for the cost of a little time, a disk and perhaps a bit of photocopying. Fair enough I suppose, the second part at least is true. The first part ignores a few basic facts.
Programs don't just appear out of thin air. Someone has had to write, test, debug and document them. Packaging needs to be designed, manuals need to be typeset, disk copying equipment needs to be bought. Packaging needs to be manufactured, manuals printed, disks manufactured and labelled, the whole shooting match packed together ready for the user. Of course there won't be any users unless advertisements are designed and placed in strategic (and very expensive) magazines and papers. So far we could be talking about costs from fifteen to fifty thousand pounds. A system needs to be set up to handle order fulfillment, accounting and normal business administration. Customer support is vital, someone must be at the end of a phone to answer the inevitable queries, even if 90 percent of them could have answered by the manuals. Products need to be sold too. The trade doesn't just come begging for a software product the day it hits the streets. Dealers need to be convinced that it is worth taking on yet another product. Distributors and OEMs need to be approached and negotiations with such companies take quite a while.
I hope by now that my journalist friend is beginning to understand why my viewpoint differs and that software publishing isn't just money for old rope. And if he's still thinking it is, how about the dealer, distributor and OEM margins that it's necessary to give? A dealer can't be expected to sell a product under £200 for less than a 30 percent margin. A distributor supplies to dealers so you can expect him to be bidding for a fifty or sixty percent discount. OEMs are in a class of their own when it comes to discounts, they often have some wild pricing ideas too. Overall, it's unlikely that the publisher sees more than fifty percent of the price coming back to him. Take out of this the fact that he must pay the author his royalty, after all the author is one of the main reasons that the whole edifice was constructed. Take out all the production, marketing, distribution and overhead costs mentioned earlier and you would be forgiven for having a certain sympathy for the publisher.
The facts are that a lot of product needs to be sold simply to cover the considerable initial production and launch costs let alone provide any sort of return for the risks taken by the author and the publisher. My friend mentioned other things, like software libraries, but I will end with this puzzle: he says he copied our program and gave copies to several friends, the result of which was that some of these friends went out and bought the real thing. If that's true I'm deeply grateful. What mystifies me is that if they got to know the product well and liked it, what on earth motivated them to actually purchase a copy?