Great stuff from Tim… Tim O’Reilly on Piracy, Tinkering, and the Future of the Book@ Forbes…

JB: And on the software side, do you see any threat to the way that kids might be growing up without enough access to start tinkering?

TO: I think there’s plenty of access for tinkering. It’s kind of like saying ‘oh my god, these people are tinkering on computers. What happened to the days when they used to tinker on cars?’ Tinkering goes somewhere else, but it doesn’t go away.

JB: On all your titles you’ve dropped digital rights management (DRM), which limits file sharing and copying. Aren’t you worried about piracy?

TO: No. And so what? Let’s say my goal is to sell 10,000 copies of something. And let’s say that if by putting DRM in it I sell 10,000 copies and I make my money, and if by having no DRM 100,000 copies go into circulation and I still sell 10,000 copies. Which of those is the better outcome? I think having 100,000 in circulation and selling 10,000 is way better than having just the 10,000 that are paid for and nobody else benefits.

People who don’t pay you generally wouldn’t have paid you anyway. We’re delighted when people who can’t afford our books don’t pay us for them, if they go out and do something useful with that information.

I think having faith in that basic logic of the market is important. Besides, DRM interferes with the user experience. It makes it much harder to have people adopt your product.
You’ve probably seen my paper from 2002 called “Piracy is Progressive Taxation.” I think that’s a really good metaphor. If you are extremely well known and have a very desirable product, then yes, you probably do suffer a bit from piracy, in the same way that if you make a lot of money you pay more in taxes than if you don’t make any money. But we generally accept that tradeoff because you know we use the money from the people who make a lot of money to help the people who don’t.

In a similar way, the exposure that you get from free content actually helps drive visibility and awareness for people who are unknown. So we’ve always sort of taken the approach that on balance it’s OK, and we’ve also taken the approach that it’s more important to establish social norms around payment. The way that you do that is by honoring people and respecting how they act, people pay us because they know that if we don’t get paid we don’t do what we do.
For years we’ve donated our returns (you get returns from Barnes and Noble with stickers on them and you can’t resell them) and we send them off to Africa and Eastern Europe to be donated. What do we lose when somebody else gains?