You often hear people in copyright debates claim that you "can't compete with free." We've tried to explain why that's wrong: In fact companies find ways to compete with free all the time. The latest example comes via Wired's David Kravets, who points out that Apple's latest OS is all over BitTorrent. People who want to avoid giving Apple its $129 can visit their favorite BitTorrent search engine and download the new operating system free of charge. Yet apparently, some of the same people who were downloading bootleg copies of the OS earlier this week will head to their local Apple Store tonight to pick up a legitimate copy. "If you're going to use a system to run your life, you're less likely to take chances with an illegitimate copy," says BigChampagne's Eric Garland. Being sure your computer isn't running a defective or compromised version of Mac OS X is worth $129 to a lot of people. Of course, that's not a new insight. One of Red Hat's most lucrative products is its software subscription service, which allows companies to pay money in order to guarantee the software they get will be stable, secure, and will work well together. Red Hat's customers could download the software themselves and roll their own version of Red Hat, but for many companies it's just not the risk that they'd miss a critical bugfix or security patch.

The story also contains an important insight that's relevant to other copyright industries, such as music: sometimes the users of peer-to-peer networks are your biggest fans, who are so eager to get their hands on your product that they're willing to break the law to get their hands on it a few days early. In many cases, they're the people who are most likely to buy your hardware, go to your concert, see your movie in the theater, etc. Some illicit downloads doubtless represent a lost sale, but others -- especially before the product has been widely released -- may be paying customers who are just really anxious to get their hands on your product.

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(Via Techdirt.)