Here's how I deal with users who steal

Interesting that the &quot;scholarship&quot; (free) plan isn&#x27;t mentioned on the homepage. It seems you have to try and steal the product before being offered the free plan.<p>I also like the subtle dig, &quot;if you can&#x27;t afford it.&quot; I&#x27;ve certainly pirated things myself. If iTunes asked me, &quot;We noticed you&#x27;ve pirated The Walking Dead. If you can&#x27;t afford $3, click here to get it for free.&quot; By reframing it as charity I might be shamed into purchasing it. :)<p>That&#x27;s certainly a novel approach. I would love to hear how it turns out.

This is the sort of thing that sounds reasonably nice and we all wish we could do. However it stops working really fast.<p>I also have a web service and we used to let people get away with this sort of stuff. First year it worked. Second year, the amount of fraud was impacting bottom line and some of this users turned out to be the ones that used &quot;support&quot; the most. So we started banning bad users and blocking their support requests. The overall impact to the &quot;good&quot; users is pretty noticeable now. Not only can we reply to their support e-mails faster, but the overall system is also faster.<p>My mentality shifted. Now I think you &quot;owe&quot; it to the &quot;good&quot; users to remove&#x2F;ban the ones who steal. They are most likely not zero sum, but pretty negative.

Everytime stuff like this comes up, I think of Cory Doctorow&#x27;s excellent essay, &quot;All Complex Ecosystems have Parasites&quot; <a href="http://craphound.com/complexecosystems.txt" rel="nofollow">http:&#x2F;&#x2F;craphound.com&#x2F;complexecosystems.txt</a><p>If you pave over your lawn when you get your first weed, you may never see the beautiful unexpected mutants that weed might create.<p>We wrestled a lot with this at 2600hz (and I think all open-source companies do). When your clients use your systems in ways you don&#x27;t intend, you can shun them or embrace them. The latter tends to work quite well whereas the former only engenders bad feelings.

How about adding an ongoing option to allow scholarship account holders to voluntarily convert to a full account and return their freebie to a pool, so it can be offered to another struggling musician? Such an option would allow users to treat a scholarship as a temporary measure, that they can chose to use, whilst getting established.

I think your new system has a lot of positives, but it would be nice if there was a way to gain access to it without requiring the user to start by scamming the referral bonus. I&#x27;m concerned that you will be rewarding the users who are willing to cheat, and losing the cash-strapped but honorable users who simply decide not to sign up because they can&#x27;t justify the cost. On the other hand, I can see why you don&#x27;t want to advertise the scholarships too widely.<p>Maybe you could keep what you have, and also mention in that fine print that you do offer temporary scholarship accounts for musicians in need, giving a link to an easy but real application to be manually reviewed? And instead of automatically granting the scholarship to scammers, do so only after they fill out the application? In practice, you&#x27;ll probably OK them all, but the hassle and uncertainty of the application will encourage those who can afford to pay to do so.

Why not just keep the first $19.99 of revenue if they haven&#x27;t paid up front? If they are making money they can afford it.

That&#x27;s a really nice idea - and I really hope people will respond well.<p>On a related note - distrokid looks amazing. If I were still making music I&#x27;d sign up for sure, just for the Spotify distribution if nothing else. In fact, I dare say if this had existed 5-10 years ago it would not only have provided a means to push my music out, but more than that, acted as an intensive to actually create and produce.<p>By lowering the barrier to distribution, you&#x27;re almost certainly propelling a lot of people to working on musical projects which would otherwise fall by the wayside because there&#x27;s no obvious end goal.

Wow, I am speechless. This is fanastic, not only is DistroKid a great service but Pud recognises that even at a low price for what the service is, some musicians just can&#x27;t afford it, so rather than closing accounts, they&#x27;re giving users an ultimatum to pay or join the generous scholarship program. Take note people, this is how you run a successful startup. It&#x27;s this kind of respect of your user base that inevitably ends up building loyalty and loyalty amongst a paid service like this is everything. Another beautiful thing about this is that Pud has just publicised the method some people were using to everyone. People who didn&#x27;t even know about this cool exploit now have the choice of doing so themselves (if they choose too).

Maybe I don&#x27;t understand your business model correctly but why not just take the first $20 of royalties from users that steal?

The Bill and Ted rule: Be excellent to one another.<p>On the other hand, I have to wonder about the story of the police officer - how much is it going to cost that woman to deal with the misdemeanor?

This reminds me of Les Misérables of Victor Hugo published 1862. Jean Valjean stole silvers goods from a priest but was caught by the police. Brought back in front of the Priest with the goods he stole, the Priest said that he gave them to him and that he also forgot the silver candelabra. The Priest than gave them to him. It was the first time Jean Valjean met a good man and this was a shock to him which changed all his life as you can read through the story.

As an alternative solution, why not provide a free account only after all those 5 referred users paid for their first year? It will make no sense to fake referrals and that&#x27;s why a lot of referral programs work this way. If you&#x27;re interested in real paid referrals that&#x27;s how you do it.

It&#x27;s a good idea. People don&#x27;t want to think they can&#x27;t afford it, so they will probably pay for it.<p>However, I think another pricing plan could be great : It costs virtually 0&#x2F;year, BUT, 50% of the first $40 of royalties are taken by the site, and the rest sent to the user. Thus the user can still see he is earning something from the first track sold.

DistroKid makes me want to start recording my music again, <i>just</i> so I can use DistroKid.

Why not offer a plan that takes the money after they start getting paid. You could take the full amount before they start getting paid, or take a percentage cut of each payment.<p>In order to make it fair to the people that stump up the cash first you could also charge them slightly more.

Since I am a little lazy, can someone explain to me why this service is necessary. Does apple not allow musicians to upload their music to itunes?

Confession: I totally faked the referrals on distrokid, using 5 dispostable.com emails, and was frankly a little surprised when it worked. Strangely, I don&#x27;t see the &quot;scholarship&quot; plan as an option when I log in, but maybe it only applies to new phonies?<p>At any rate props to you pud, for so many reasons... it&#x27;s a fantastic model and a great product execution. It&#x27;s the first product that encourages casual music distribution - but that&#x27;s exactly why I didn&#x27;t, and probably won&#x27;t, pay for it.<p>I have 2 albums up on tunecore, that actually generate revenue. These are albums - professionally recorded, produced, etc. - that I spent money creating, and that I make money back from. I picked tunecore because they were the best thing available at the time, but if I were to do another big release, I&#x27;d use them again (despite the fact that I&#x27;m not thrilled with the company at the moment because Jeff Price is a great guy and they totally screwed him). And at the end of the day, it&#x27;s because they have the most distribution partners, and because they send me a check every month. tunecore is for music that I want people to buy.<p>Then Distrokid came out, and I celebrated. I&#x27;m sure there are exceptions to this, but musicians make tons of songs that never see the light of day. Maybe the song isn&#x27;t entirely finished, maybe it&#x27;s not good enough to pay for mastering, maybe it&#x27;s part of a musical direction the musician changed his or her mind on. I&#x27;ve got a ton of these, and these are what I&#x27;m using distrokid for. I&#x27;m not really promoting these tracks, I&#x27;m not expecting a great return from them. A lot of them are unfinished experiments or lo-fi fun, nothing market-worthy. But I can put these up for my friends, other musicians, etc. to hear on Spotify at a higher quality than soundcloud can provide.<p>As soon as I make $19.99 from distrokid, I&#x27;ll buy the yearly, more as a thank you than anything else. But until then, I&#x27;m probably going to keep my phony free account.<p>And pud - if you can match tunecore&#x27;s number of distributors and earnings reporting... well, &quot;disruption&quot; doesn&#x27;t even scratch the surface.

That&#x27;s excellent. Please circle back when you get some stats on the response.

I don&#x27;t believe this will convert well. Converting to paying customer should include a positive reinforcement.<p>I would never be a customer of a service where the company tells me that I stole from them in the first place. For the DistroKid case I&#x27;d say stealing is a strong word for creating a few dummy user accounts. I&#x27;d guess many of us have asked friends to use Dropbox referral codes to sign up even when you know they might not continue to use the service.<p>If a legitimate person is caught stealing then one is ashamed and prefers other services.

I read this article with interest and I have to say that this is a slap in the face of everyone who honestly pays for the software. It&#x27;s like inviting a burglar back to your house the next day for dinner. Opportunity makes thieves, period. If someone is so broke that he can&#x27;t afford to pay, and this someone is an honest person, he would probably ask you for a special discount, explaining his tight financial situation.<p>Poverty is no excuse to steal (at least not in my book). Not so long ago I lost everything I worked for in the past 30+ years, including my home. Do you think I steal my way through live now? No I don&#x27;t, because I was raised that honesty is the most important thing in live-and that&#x27;s what I taught my kids and that&#x27;s what I tell my grandkids. What message do you try to convey when you treat thieves the same way than honest customers? I sure wouldn&#x27;t take my money to a business like this(if I had the money). I believe it invites people to keep stealing from you, because you&#x27;re asking for it. Dude get real, that&#x27;s the wrong way to promote yourself by letting everyone know what a good heart you have. Yeah, I know times are hard, but does that give you a free ticket to steal? Absolutely not. And then you have the nerve to compare yourself to the cop in Florida...who indeed did a good thing. This was about food not a frigging piece of software.

I dislike the comparison that the OP draws between scholarships and the given example of the officer buying food for the shoplifter. In the case of the latter, the officer is providing an additional opportunity for the woman by purchasing groceries that she otherwise wouldn&#x27;t have been able to afford. In the case of the OP, the users making artificial accounts receive exactly the same service at the same price, and so no opportunity is being generated.

This is awesome. I am confident there will be a lot of sign-ups and loyal users coming out of this, while it still helps those who struggle financially.<p>It is not optimal in theory to create rule systems that are abuse-able for personal gain, but this seems like on of those cases where it will work in the real world. I&#x27;d be curious to see user decision statistics about this in a couple of months.

One purpose of getting users to sign up 5 friends for a free account is to get more people using the service. One purpose of allowing the scammers to get away with it is to be able to write a blog post about their novel approach that will in turn get more people using the service. I&#x27;m not saying that&#x27;s the prime motive, but it seems like the goal is met either way.

&quot;Stealing&quot; has a very narrow definition. Causing someone to lose some potential revenue is not necessarily stealing.

If you&#x27;re going to play the &quot;nice guy&quot; card, don&#x27;t offer the &quot;scholarship&quot; plan only to cheaters, while trying to guilt trip them along the way.<p>Letting people use your product for free if they can&#x27;t afford it is certainly a nice thought, but then you should give that opportunity to everybody.

That&#x27;s a great story, and a great bit of humanness behind it, but my personal experience is that people will defraud you out of business if you let them. They will take whatever you give them, and then some.<p>Most people are actually honest, but you just need &quot;enough&quot; who aren&#x27;t and who are also greedy (i.e. the typical fraudster) to lose your shirt. It depends on the model though: If the author&#x27;s model is such that his costs are bounded and are otherwise absorb-able, given the revenue driven by honest customers, then he may be OK.<p>But, our model is such that not busting the user can literally lead to unbounded losses and these guys show no compunction whatsoever about driving you into the dirt if they can make a buck.

Very clever.<p>I wonder if you could make this official with something like this on the home page:<p>&quot;If you are interested in our product but you can&#x27;t afford it, please send us an email explaining why you can&#x27;t afford it and we will give you a free license&quot;.<p>That&#x27;s it, no conditions (&quot;at least two paragraphs, and it has to feel real!&quot;), no lecturing, just asking people who can&#x27;t spend money on the product to spend some time instead.<p>I wonder if the extra thoughts that would-be pirates would have to put into writing that email would be enough to make them reconsider and actually buy the product they would have otherwise pirated...

I&#x27;ve had pretty good success giving away free accounts to my products to anybody who writes me an email asking for one. For Twiddla, there&#x27;s actually a line on the pricing chart suggesting you do so if you&#x27;re a teacher or student.<p>Marginal lifetime cost for servicing an additional account is roughly $0.00, give or take a penny. Marginal benefit from a happy customer with a fresh free subscription and a Twitter account is somewhat higher.<p>So while you can spin it as goodwill and charity, the bottom line is that it&#x27;s just good business sense.

I think it is probably not the money but the hassle. If you&#x27;re not in the USA or have no credit card or fear using it on internet, creating five fake accounts might just be simpler.

20$&#x2F;year is really cheap for unlimited uploads on itunes. I&#x27;m from France does it work here too? Do you even need a referal program ? You dont need to do that.

Thats nice and good for you, your users and your business.<p>However, be cautious to not get the leechers, those users who are rich and still would suck others dry. There are plenty of those in the world. I believe for your service, they still wont do much damage to you, compared to the musicians who really have no money and just want to get by.<p>But still, be cautious. And dont call it stealing, its something else going on here, its fraud or malice or leeching.

This is the most awesome thing ever. Thank you.<p>EDIT: Though for real this is beautiful and exactly what I want to see because it is what our users are capable of.

Kudos, that&#x27;s great! I think that&#x27;s a very cool option - I feel like there&#x27;s a lot of musicians out there who are dirt poor, trying to find a way to break through. It&#x27;d be interesting for you to offer the option to scholarship accounts to donate later - and then see which ones actually make it big enough that they decide to pay you back for your service!

I&#x27;m doing something like that with the trial of my time-tracking app, Zone. (<a href="http://rinik.net/zone" rel="nofollow">http:&#x2F;&#x2F;rinik.net&#x2F;zone</a>)<p>The trial version creates this file: NotTheFileThatStoresInformationAboutTrialDates.txt<p>If you simply remove it, the trial is reset. I would rather spend the $5 then do it every month, so hopefully my users think in a similar way.

You are running a business, sooner or later your bottom line will be affected. What you should so is inform the Scholarship account holders that $19.99 will be deducted from their total earning of one year. This way it will be a win-win scenario. They get a free account upfront and they pay you later. You are still getting paid in the end!

Its similar to wordweb&#x27;s free version licence [1], after the trial it prompts a question about how many flights you took in the past year and based on the answer you qualify for free indefinite use.<p>[1] <a href="http://wordweb.info/free/licence.html" rel="nofollow">http:&#x2F;&#x2F;wordweb.info&#x2F;free&#x2F;licence.html</a>

This is neat. There is also the other conscience option: Whenever they make money and you&#x27;re about to send it to them, pop a message saying &quot;Hey, we got your money for you, are you <i>sure</i> you kept your end of the bargain?&quot;. Then offer them a chance to pay again or subtract from what they made.

Cool idea, but I can&#x27;t help but wonder if it&#x27;d be better to have a &quot;pick your price&quot; option versus just giving it outright for free. Noble, sure, but it would be interesting to see the trends associated with what users picked. Maybe they were only willing to spend $5? Who knows.

Interesting that the default mode for so many people on hacker news is judgement. I&#x27;m here to learn so thank you for sharing your approach. I find it a refreshing way to engage users who are using the resources either way. Would love to hear more about it&#x27;s impact over time.

I think it would be interesting to make it free to use, until you want to start collecting your royalties.<p>Perhaps give them the option to apply their first $19 in royalties to the service (or at some discounted rate, as you can potentially collect interest on unclaimed royalties at scale).

I would just like to thank the OP for being brave enough to compete in that space of music publishing. The big guys are all but handing the industry over to pirates by failing to adapt to the marketplace... it&#x27;s nice to see smart people taking advantage. :)

You could probably write something interesting with a Spokeo, LinkedIn or Klout API that would give a pretty solid idea of whether or not you&#x27;re dealing with someone broke or just trying to not ante up.<p>Great idea though! Nothing wrong with a little Shaming!

I like that idea!<p>Remembers me of the German magazin &#x27;brand eins&#x27; that offered a &#x27;social&#x27; subscription where you won&#x27;t pay for a year if you&#x27;re struggling with making ends meet. You just had to tell them, no questions asked.

I was actually wondering how to detection works.<p>Just checking if all users have the same email domain name (with the exception of a white list such as gmail, hotmail, etc.)?<p>Or flagging users that are using mailinator&#x2F;5minutemail&#x2F;whatever?

A few other comments from the previous submission of this when it was on Medium: <a href="https://news.ycombinator.com/item?id=6630114" rel="nofollow">https:&#x2F;&#x2F;news.ycombinator.com&#x2F;item?id=6630114</a>

Have you talked to these users about why they are doing this? $19.99&#x2F;yr seems insanely cheap, somehow I find it hard to believe anyone semi-serious about sharing their music wouldn&#x27;t want to pay it.

Technically, it&#x27;s not stealing, it&#x27;s hacking the system. It would be one thing if they were using cracked or stolen accounts, but this is a legitimate loophole left open as a marketing tool.

So they get free music distribution and free lessons from a moralist.

I heard of products that were added to torrent sites by the creators specifically to get pirated, but after the install there was a pop-up asking kindly for a donation :D .

I like you. How will you deal with revenue hit? Also, how about interesting them into paying for an account when their music sells above a threshold?

Already a good idea, beautiful simple to use, now playing the good guy. I think this is something that is worth doing. Hope Distrokid succeeds :)

How about you make $19.99 then that covers the cost of your account? It&#x27;s a win&#x2F;win situation for those without credit cards.

I&#x27;d love to see how the detection works; is it just based on a fuzzy match on between the referred users&#x27; email addresses?

It&#x27;s like taxes. Nobody will protest paying a lot, untill they run out of backdoors.<p>PS. I live in Belgium and we have a crazy tax % here ;-)

I&#x27;m curious how you define &quot;bogus&quot; referrals.<p>New accounts with no activity?<p>A non-activated account?<p>Accounts created from temporary email providers (ie: Mailinaotr)?

oh man. that deserves a big heart icon. (i.e. this is jus sweet). Earning money at the same time teaching people to be adult.

How can they detect user who refers the fake account. I would love to get this functionality in my site too.

&quot;Even when the user thinks they’ve scammed a free account out of us.&quot;<p>...<p>...is also always a nice feeling? What?

Great concept. Not sure it will work but should be interesting to see how it plays out!

Really like this approach - fascinated to know how this works out over time.

If &quot;we let them get away with it&quot; how is it &quot;stealing&quot;?

Um, how many variations of the shoplifter story have we seen?

I am waiting for the next blog-post to see how does it work.

That is not what I was expecting, but it is awesome!

This is good and smart.

Love this idea. At a low cost, you humanize your product to your users, you provide people a chance to &quot;do the right thing&quot;, you absolve people of their subterfuge, and you increase the chance of conversion. Even if only a small percentage of users do this, that&#x27;s still a small percentage who weren&#x27;t paying you before. Brilliant - I hope it works out for you.

This is a good business plan. The larger music companies should hire some new blood? or, Not--I coukd care less; 90% of artists were screwed out of royalities on their music by thiefs. The successful ones are were rare, and if they made money, they just ruined their health with drugs and alcohol. Napster ruined the music industry model. Maybe it should stay that way? A good band, Protools, and a little effort will publicize Tallent. I&#x27;ve noticed a darth of anything remotely original lately. I hope B. F. Skinner wasen&#x27;t right, and we have come to the end of originality?(no he didn&#x27;t predict anything, but you can draw conclusions on his theories.

What a smug blog post.

Personally, I consider &quot;free if you refer 5 users&quot; sort of an offensive trick. It presents quite odorously the falseness behind the $20&#x2F;yr pricetag, and makes me value the ethics behind that price less.