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> It doesn't have a $0 cost of production.

You skipped over the word "marginal," which was the most important word in that sentence. http://en.wikipedia.org/wiki/Marginal_cost



"You skipped over the word "marginal,"

Most pieces of software cost millions to develop, so I don't think it even applies.


The cost of development is a capital investment, not a production cost. You may or may not recover that investment, depending upon a whole host of variables, most of which you will have no direct control over, presuming you even recognize their existence.

Software does have zero marginal cost of production, so someone making an illegal copy of your software does not create any actual cost for you in the way that someone stealing your physical inventory would. So the impact of an individual using a pirated copy of your software is the same as that individual not buying your software for any other reason. The macro-level impact of piracy is the same as the impact of any other macro-level factor that discourages people from buying your product, e.g. a competitor offering an equivalent or better product at a lower price point.

I'm not saying that you shouldn't assert your copyright in the face of brazen piracy. But the best way to earn your ROI for developing the product is to maximize the value that it creates, and thereby maximize the number of people who will willingly pay for your product. Focusing on pirates, who are manifestly unwilling to pay you, is a dead-end. Spending money on DRM is a waste of capital that could be used to improve the product and attract more paying customers.




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