From time to time, readers let me know that my fonts are circulating on such-and-such website devoted to some category of software piracy.
Well yes—of course they are. In the font world, as in most areas of software endeavor, there’s been much hand-wringing over the last 40 years about the (supposedly) massive losses to this kind of unauthorized redistribution and copying, and the lack of any satisfying protection mechanisms to prevent it.
For the most part, anti-piracy schemes have never gotten far because they inconvenience legitimate customers far more than they inhibit thieves. Consistent with this, I’ve always been open about the fact that my business runs primarily on the honor system. It’s much more worthwhile to put a unit of effort into winning new customers rather than chasing down bad actors. (Peak audacity: the gentleman who once stole my fonts off a pirate website and then emailed me wanting technical support.)
But let’s take this principle further. I don’t quite agree with publisher Tim O’Reilly’s view that “piracy is progressive taxation”, which implies that these effects are equitably allocated. But what is the optimal level of software piracy?
The naive answer is zero. But consider that there are only two foolproof ways to prevent software piracy. The first is to never release the software at all—silly but effective—in which case revenue is $0. The second is to permit the work to be freely copied and redistributed—say, under an open-source license, which condones the otherwise piratical behavior—in which case revenue is also $0. But at both ends of this continuum, revenue is $0. So the maximum revenue happens in the middle, where some amount of piracy occurs. Therefore, the optimal level of piracy is greater than zero.
Similar logic applies to return policies. I know that some buyers exploit my 30-day return policy—e.g., so they can use a font in a project for free. (Peak audacity: the intellectual-property lawyer who once asked for tech support months after returning the fonts, and then claimed “I didn’t read the license.”) But those cowardly losers are offset by those who rely on the return policy to buy fonts that they might be unsure about. In a lot of those cases, they keep the fonts. So in the end, the policy is a net winner. But it only works if the rate of return is greater than zero.
We can even use a rational-choice argument to show, roughly, that software piracy doesn’t exist. Let’s suppose you were opening a software company. I give you the choice of two sales trajectories, which would recur indefinitely:
Trajectory A: $10,000 annual revenue with a 1% piracy rate (= $100 per year)
Trajectory B: $1 million annual revenue with a 1000% piracy rate (= $10 million per year)
Which would you choose? If you feel that losses to piracy are real, then your expected value from trajectory A is $9900 per year; your expected value from trajectory B is negative $9 million. Clearly, A is the profitable choice.
But obviously, no one would do that. Any reasonable person would pick trajectory B. The only dollars that matter are the real ones (= revenue) not the conjectural ones (= piracy losses). Moreover, you can substitute any rate of piracy as part of trajectory B and the answer will never change. So to the extent that it doesn’t influence economic choices, piracy does not exist.
Ultimately, the flaw in the piracy-losses argument is the underlying assumption that those who take your work for free would buy it if piracy were made impossible. By and large, this isn’t true. People who download my fonts from pirate sites were never potential customers. They’re freeloaders, who only find one price satisfying: $0.