DISQUS

The problem of competing with 'stolen' is only a problem if your customers view you as a crook. If they do feel like they are getting ripped off everytime they enter into a transaction with you, its easy for them to justify reciprocating.

I.e., if I think the recording industry has a habit of ripping me off by charging $20 for a 15-song CD with only 2 good songs on it, then I might not feel so bad about sticking it right back to them by finding free copies online. The answer here is to set a price which is irresistible. There are lots of studies showing optimal pricing for music results in increased sales, even in the face of free, illegal alternatives.

Similarly, if I think the recording industry is sticking it to me by selling me DRM'd songs that I can only play on 3 devices over my entire lifetime, I might be inclined to break the DRM myself or simply go back to the p2p systems for alternate copies of songs that I've legally purchased.

The solution in both cases is to treat your customers with respect and fairness. As the last decade has shown, copyright is a voluntary system. If the masses view it as oppressive, they'll simply toss it and go about their business.