Copy protection?
John,
basically you face the classical economic tradeoff. Do you, as the
producer of the good in question, raise the real price, the market price
plus the opportunity cost of owning the good, beyond what may be
reasonable. Furthermore, are you willing to raise your per unit
production cost beyond that of a non-copy-protected release.
I do realise that software is not quite comprable to other goods since
an exact copy of the good can be made a little or no cost to the pirate.
However, what you need to keep in mind is the real number of lost sales
and how that relates to the overall costs of following this regime.
First, you need to know approximately how many sales you will lose due
to piracy. Not those lost to pirates that simply collect everything in
sight, or to the casual collector, but seldom user, but real lost sales.
This is one side of the equation.
Next, calculate the per-unit-cost of adding the dongle. Don't forget
your overhead costs in putting them in each box and ensuring that each
actually works.
Add to that the support cost of using the dongle. You put it very well
when you said, "[w]hat I'm most worried about is the headaches that will
come from having the dongle: dongles that actually get lost, dongles that
supposedly get lost, dongles "lost" in shipping, dongles that "weren't in
the box", dongles that don't work on Customer's computer and they need
this software to run by tomorrow morning, etc." Add on to that the lost
productivity of the users when their dongles are lost, misplaced, don't
work, and so on. Multiply the lost time by their average wage (which, I
bet, will be very high). Now add that to your costs in adding the dongle
and in-house checks.
Compare the two sides. True, pretty much all of this must be
estimated, but if the second side (costs to the user) heavily outweighs
the first, your product is toast in the marketplace. People will put a
premium on a product, but if the premium is sufficiently high, your sales
will suffer sufficiently to actually drive revenue below costs, which as
we both know is a killer in business.
I also see a couple of other problems with the dongle situation,
especially at the list price I've seen ($500?). First, and foremost,
you'll need some type of site-licensing, since businesses don't, as I
understand it, pay full price beyond a certain point. The other point is
much more significant, IMHO. PC'ers take their work home. Amazing as it
may seem, some people do work at home afterhours, and they expect to use
the same software as work. So, unless you provide some type of
double-dongle, one for work and one for home, or a much cheaper copy for
the home user if he uses a copy at work, you're going to generate a lot of
resentment there. Then again, they could take the dongle home, but then
your loss ratios increase, along with the forgetfullness factor. How
would you like your company shut down due to everyone leaving their
dongles at home after the Memorial Day weekend?
After all, quite a bit of the sales of IBM's and Mac's has been driven
by the fact that people want to buy the same machine as they use at work.
While some may argue that familiarity is the sole reason for such
purchases, I really don't think so. I believe that it is the ability to
continue projects at home that has driven this market. (And this is one
of the reasons that C= failed in the marketplace).
Lastly, is it piracy if someone is continuing a project, from work, at
home. Same program, same project, just different computer. Perhaps it is
time to think about some sort of registry. One dongle with my id, perhaps
a card? It would be far simpler if each program were registered to me and
when I log on, each registered program were immediately accessible. When
I quit my job, certain programs would be de-registered. Shades of 1984?
Or commonsense. I don't know.
The industry needs a serious rethink on the concept of dongles.
Fifteen or more dongles is idiotic, at best, and suicidal, at worst.
"You do trust me, don't you? Of course you do."
— "To Play the King" (BBC)