“If people find nothing unfair about the above, then I have to wonder what such people would find fair. Perhaps if the shoe was on the other foot they might rethink their positions.”

I “support” piracy in the sense that I think it should be legal to download but I do not pirate media myself.

I don’t support piracy because I want stuff for free and I don’t think the artists deserve any payment.
My issue currently with copyright holders is the fact that what they sell us comes in unlimited quantities. Once a song is created, it can be copied infinitely at no cost.
Normally, supply and demand dictate the price and I find that current prices of music, games and movies are absolutely unreasonable considering that supply is unlimited.
I think of it this way: I buy music, movies and video games. I don’t buy a specific amount of media, rather I have a fixed budget and I spend all of that budget regardless of how many songs/movies/games it grants me.
Once my budget is spent, there are still songs/movies/games out there that I do not own. To me, this means that media is priced way above its value. If it was priced fairly, I would be able to spend all my yearly budget and still own all the media that has been released that given year.

However, I understand the concerns of the publishers. They might think that if they lowered their prices, I might reduce my budget. I don’t agree but I understand why they would think that way.
Customer and publisher are stuck in a bad position here: In the real world, with physical goods, the manufacturer has a limited number of goods and tries to sell all of them. Customers decide whether to buy or not based on how fair they think the price is. If the price is deemed to high, the manufacturer has proof of that because he is left with unsold merchandise. But in the digital industry, publishers don’t have a limited stock that they must sell. If people cease buying music, movies or games because they don’t like the price, publishers are not left with unsold items as an incentive to lower their prices.
So basically, when it comes to physical merchandise customer and manufacturer come to an agreement: set the price to an amount at which all items sell. Both parties are satisfied that the price is fair. With media, there is no such agreement and both parties feel that the price is unfair.

This is why instead of demanding media for free, I am asking publishers to change their business model. They could choose a model where both they and the customers end up satisfied. I can imagine several new models:

1) Create virtual scarcity.
With this model, publishers would set in advance a number of copies they intend to “produce” and sell for any given album/movie/game, for example: 10,000 copies. Once the publisher has sold 10,000 copies, publication stops forever but file-sharing remains illegal. This way customers have an incentive to pay more money (i.e. they want to buy the album/movie/game before stocks run out) and publishers have leftover stock when their prices are too high.
But publishers won’t do that because they want the best of both worlds: they want to sell digital content as a digital good, with all the advantages digital goods present, but at the same time they want the same advantages that physical goods have. Or in other words, they’re happy to have unlimited supply but when customers point out that goods in infinite supply should be very cheap, publishers don’t like it and try to bend the rules.

2) Another business model is charity.
Let people pay what they feel is fair to pay. It works pretty well when you can convince your customers that you deserve money. Everybody is aware that artists need to eat. A few may not pay even though they could afford it and enjoy the artist’s work but if your work is good you’ll still get enough money from everyone else to make a decent living. You might not become a millionaire because once people see that you are making 100k a year they’ll feel they don’t need to pay you, but then again who said artists are entitled to make millions? Of course convincing people that your work has value and that you need money requires some effort, such as connecting with the fans, showing them how much time it takes you to make music, music or games, and if necessary threatening to stop making the art you do if you feel you really are underpaid. Connecting is also hard to do when you are not an artist but a faceless publisher.

3) Raise money, then release your work/ rely on pre-orders exclusively.
Basically, artists would announce an upcoming album, movie or video game, they would provide samples and trailers, and they would tell people “I will release my new work once I have N number of pre-orders and have made X amount of money”. If you make the money you’ve asked for, release the work – congrats, you created something and have managed to sell it for the value people think it has. If you don’t make all the money you aimed for – you mistakenly believed your work was worth more than it really is, don’t release your work and refund customers who have per-ordered. Sucks to be you, but learn your lesson and next time, lower your profit expectations or make better music/movies/games.
The problem with that model is that if you expect a too high sum of money for the release of your work (say you demand $100k but only get ?3k worth of pre-orders, you don’t get to sell any of it and you make 0 profit. On the other hand if you create the next big hit but aren’t aware of the success it will have, you will end up demanding much less money than you could have made and you miss your chance at becoming a millionaire.

4) Sell derivative products.
Here’s how this works: music, movies, games and other media are distributed freely. Piracy is allowed. You use your work to create a brand, for example a movie or game universe, or make a name for your band. Basically you give your work away for free to gain fame and publicity.
Then you use the popularity of your work to sell T-shirts, figures, mugs, posters, costumes, etc.

There’s a huge market for derivative works: I need to buy clothes and I’d love to buy clothes from my favorite band or video game but when I go to the store they don’t have such clothing. Even specialized or online stores don’t always have a huge selection of movie/game/band specific clothing.

When I buy a new coffee mug in a store, I don’t see mugs with my favorite band on it (again, you need to find stores that specialize into this and even when you do, the selection is not always very good, often you just get a regular design mug with a simple and boring logo of the band on it. Nothing really original).

I’d love to buy a Storm Trooper costume not because I need a costume (well except on Halloween) but because I just love Star Wars that much. Unfortunately they aren’t mass produced, they are instead made by hand by a few people who don’t even seem to be affiliated with the Star Wars franchise, and they cost hundreds.

Another thing you can sell is services, such as concerts.
The demand is out there and is just awaiting to be answered.
This business model in my opinion is the best:
– It solves the piracy problem, turning piracy into marketing. Pirates and publishers are happy.
– The market for what you sell exists, it’s out there and it’s ignored a lot.
– You profits depend on the quality of your original media product: make a good movie and you’ll sell derivative products. Make a crappy movie and nobody will buy your t-shirts. This is fair, and it answers the concern some customers have that when you buy media you take a gamble because you don’t know if you’ll enjoy it.

But of course, there’s one downside: supply for mugs, t-shirts, toys, costumes and figures is not unlimited and you can’t sell stuff higher than its real value or else you’re left with unsold goods.
Oops, I guess I forgot that the media industry is entitled to make not just a profit but millions of dollars.