🚀 go-pugleaf

 
>>As someone who makes their living off copy protected Mac software, I'm offended
>>by your claim that this is "**not** intended that this program be used for
>>unlawful purposes".
>
>I'm offended too.  But I'm offended because you (and many others) feel the
>need in the first place.  It's too bad, and I certainly don't have a
>solution.

I've seen a potential solution that I really like. Consulair, makers of Mac
C, send out their product copy protected. If you want an unprotected
version, you send them $25 and an additional licensing agreement that
basically affirms you won't copy it illegally (and you sign it, so they
have something legal to beat you up with if you do...). This allows the
users that don't care about copy protection to have the software, but also
allows those of us who need free access to the software a way of getting it
while STILL protecting the manufacturers from abuse. 

Consulair, by the way, seems to have a good quality product and is trying
to make it available in a way fair to everyone. I recommend it highly!

chuq
-- 
From the ministry of silly talks:		Chuq Von Rospach
{allegra,cbosgd,decwrl,hplabs,ihnp4,seismo}!nsc!chuqui  nsc!chuqui@decwrl.ARPA

Do not wait until tomorrow to tell someone you care. Tomorrow doesn't
always come.

How much of the cost of a program represents the copy protection scheme?
Would it make sense to stop protecting, lower prices, and expect to sell
more copies?
-- 
Cheryl Nemeth
All opinions expressed in this article are my own, and do not necessarily
reflect the opinions of Calma Company or my cats.

"Life is a series of rude awakenings"
				R. V. Winkle [Robert Asprin]

In article <265@calmasd.UUCP> cjn@calmasd.UUCP (Cheryl Nemeth) writes:
>How much of the cost of a program represents the copy protection scheme?
>Would it make sense to stop protecting, lower prices, and expect to sell
>more copies?

Generally, very little of the cost of a program represents the copy protection
scheme.  Disk vendors do not charge that much for the 'standard' schemes, and
the engineering required to interface to them is not large.  There are a number
of things which lead to the high price of software.  Consider:

Typically, the retail channel (distributers and retailers) get the lions share
of the $$ from the sales.  It is not uncommon for the engineering firm to only
get 35% of the suggested retail, especially if they are a firm trying to break
into an existing software market or explore a new market.  Of course, keep in
mind that the 35% is not all gravy, either.  Advertising, marketing, overhead,
engineering, and production costs all have to be taken out of that.

As an example, let us say that United Software Inc develops a software 
package for the Mac.  Let's say that they negotiate a deal with SoftDist
Distributers where they get 35% of retail.  Let's say they expect (read hope)
to sell 50,000 copies the first year it is out (before it is obsolete).  Put
a suggested retail of $100 on this package.  Home free, you say?
	Gross: 50,000 * $100 * .35 = $1,750,000
Sounds pretty good this far, eh?  But consider some factors here.  First,
for a $100 price tag, it can't be something which was whipped up in your
free time.  Let's say it took 4 engineers a year to produce (or 8 in 6 months,
I won't quibble) for 4 man years.  Taking into account reasonable salaries,
fringe benefits, workmans comp and social security payments, physical plant
and equipment (they at least need offices and macs), management overhead, etc,
this can get up to easily $500,000.  And how about marketing?  50,000 is a 
pretty good penetration of the mac market, you will need some pretty heavy
marketing to get this penetration.  Even worse, if you do not seriously
advertise, dealers will not even stock you.  And, of course, there are trade
shows, salaries for the marketing people, etc, etc.  Successful product
introductions do not come cheap.  You could come close to dropping 1M$ easy.
To make it worse, if your company is going to be successful, the profits from
this product have to also carry the costs of your other product which didn't
make it.  I think you see how the $$ can slip away pretty quickly.  Oh, I
forgot, there is also the cost of goods sold, disk duplicating, manual,
box, etc.  Even if your cost of goods sold is only $5 per copy, this would
be $250,000 in this example.

If you think this is bad, consider the poor soul who comes up with a product
in his home, and is trying to find a company to market it for him.  It is not
uncommon for the developer to only get 10% of what the firm making the product
for you gets.  There are now 3 middlemen, producer, distributer, retailer.
You, the developer, might get 3.5% of the suggested retail.  $3.50 per will
go a long way toward putting your kids through college, eh?

Of course, you can try direct mailing and bypass the 'normal' retail channels,
but would you buy software from some company you had never heard of through
direct mail where you don't have a chance to try the product out first?  
Maybe you would, but most people would not.  And the moment it goes direct
mail, retailers drop it like a live grenade.

Granted, Lotus and Microsoft have made a bundle.  The reason?  They have 
developed products which have become the *standard* in their field and which
*everyone* buys.  This is the *dream* which every software house has.  Your
product becomes a *must* buy, so you can protect your profit margins and 
amortize your costs over an every growing installed base.  Any company that
develops a product like that has it made, but any company basing its business
plan on such a product is probably about to go chapter 11.  You have to plan
for more modest returns.

So be a little more thoughtful when you complain about high software prices.
Sure, I'd like $20 software, not to mention a $300 Macintosh or a $2000 BMW or
a $10,000 house ... but there are business realities here that I hope you now
understand.

					Alien

DISCLAIMER:  Any prices, margins, costs, policies, and contracts mentioned or
implied in the above are *my* understanding of prevailing market conditions.
It should be understood that they vary considerably from situation to situation
and from company to company, though I believe that the overall picture presented
still remains the same.  It should be noted that I am *just* a lowly engineer,
and I do not know the specifics of any contracts which my employer has entered
into.  Most of my *knowledge* comes from talks with friends at a number of 
companies, some independant software developers, and computer retailers.