hopeles5ly said:
I know many people over Asia who make massive returns by mass producing pirated cds at low prices and selling it through their own stores. Even back in my highschool days, there were students selling newly released pirated moves or games that they purchased overseas for $2/cd and making a shitload of money from it. It works.
Are you an idiot? They produce pirated CDs by stealing someone else's work. This money isn't taxed and is completely 'under the counter', so others don't really see the benefit from this economic boost.
The people who's work they steal eventually go out of business, as they can't afford to spend millions making the games or movies if people are just going to steal them and profit from their hard work.
If your friends also made $2 off each cd sold, they wouldn't have made that much money. Firstly, they would only sell to those in their school. This would require personal selling, which isn't the most efficient method of sales. They couldn't expand (as you obviously can't advertise pirated cds, or even meet high demand, unless you brought others on board), so they'd probably be stuck making $50/week to a few people who wanted some of the new CD releases weekly.
Perhaps, it isn't an ethical manner to conduct business, as you're harming a lot of companies, but in a result-orientated world, legally acquired goods are outweighed by the number of consumers whom want to obtain a good of the same quality at a much more competitive price. Hence, why the software industries, are losing billions to pirates. Even if use a sample of the responses of the people who've replied in this thread, it will reflect it.
Who is gaining from piracy though? Who gains from having a movie up on torrents? People are becoming more tech-savy and relying less on purchasing pirated discs, but rather are downloading it themselves.
I now understand what you meant by a good business model, though: I think jumb and I saw your post as you saying 'companies make more money if they allow others to pirate their stuff'. In that way, yes, in the short term piracy may be a good business model, as you're getting stuff for free and reselling them at a low price in large quantities. Then you go to jail.
It is also only a great business model when there are no competitors. In Russia, for instance, having a pirated DVD stall is the same as having a food stall: relatively low margin, and no differentiation between you and 20 others stalls in the same shopping mall.
