Price — Determinant or Deterrent

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As internet evolved, the need to create rich media websites increased exponentially. Websites began to be created increasingly with rich graphics, movies and sounds. A true enabler of this phenomenon was Adobe Systems — the company that brought products such as Photoshop, Acrobat (that made the pdf file format famous) and After Effects. However, as Adobe introduced these products to the market, the cost was way too high for the majority of the users — ranging from $400 and upwards. Given this huge difference in the price that companies such as Adobe charged from the price the customers were willing to pay for those products, an illegal market sprung up on the internet. This market was based on a very simple mechanism – break the only protection that these products carried – License keys/numbers.

Until a few years ago, license numbers for a vast variety of products were based on simple number generations schemes. Clever hackers could easily figure out the co-relation between these license keys and the products. Special software tools were written that could easily tackle more complex key generation schemes that included product types, owner names, version numbers, credit card digits, etc. Once someone could get their hands on a copy of the software, they could generate a new key. Thus, it became a easy source for many to make quick bucks by selling the software (albeit illegally) and packaging it with a new key. Websites such as Ebay and Amazon.com that created the concept of marketplace became the points from which such software got sold. During the initial years of Ebay and Amazon, many illegal copies were sold advertantly and inadvertantly to buyers. Needless to say, the software industry reacted quite sternly against Ebay and Amazon who promptly instituted a probe into such sellers. Some rogue sellers were apprehended while others wound-up their operations and disappeared.

Over the years, the proliferation of open source softwares prompted the realization within the software industry that customers would not be willing to pay abnormal prices for getting their hands on products that would help them with rich media. Photo editing, home movie making and website creation has become such common place that rich media creating software was essentially commoditized. Also, most of the industry leading software companies started creating more common consumer oriented software products at a substantially lower price point. For e.g., Adobe created Photoshop Elements, Premier Elements, etc giving the most commonly used functions from its industry leading Photoshop, Premier, etc. and Alias released its personal edition of Maya for free. This is the kind of position that industry and consumers like a lot.

In fact, when consumers get a product that holds a reasonable price tag, they are willing to pay for it rather than find ways to circumvent the copyrights in order to get their most desired products. This has been proven for a fact — for almost every item that can be copied such as software, music or movies — that consumers are ready to abide and play by the rules for the right price. Ultimately, its a win-win for all when the most appropriate price can be determined for any product.

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