Also, I'd like to commend the studios in India for releasing their movies at reasonable prices on DVD. Compare this: a Bollywood movie, 1-2 months after release, is priced at (usually) Rs. 99. (less than $2). Comparatively, if you wish to buy an English music CD, 2-3 years after release, it will be priced Rs. 325. It's a bit silly, in my opinion.
The price reduction on movies has definitely increased sales, I think. I mean, my family buys 6-7 movies a month on DVD, nowadays! The reason they have been successful is because they have adjusted their price to the market. The average income in India cannot justify spending Rs. 325 on a music CD... which may not even be good. These movies have separate pricing schemes in the UK and US that match the average income here.
In terms of software piracy, Kev, you make the point that the expensive software is aimed towards businesses. While this is true, I give you two counterexamples: operating systems and differing international markets.
With regards to operating systems, I am pointing at Microsoft with their last release, of Windows Vista. The prices were hefty for any consumer--something like $250 for the most basic version, which had less features than Windows XP, up to something like $550 for the "Ultimate" version which was the only version which really added new features compared to XP. That is something like 60-80% of the price of computer base itself for a piece of software that you pretty much have to have to be able to collaborate effectively with about 80% of the business world. The bone I have to pick with this is that once your development is complete, you do not have any more expenses associated with your product apart from physical expenses (such as boxcovers and CD covers) and developing bugfixes. This is the difference between vodka and software--when you're making vodka, you still have to buy the ingredients, you still have to mix stuff together, you still have to wait while the mixture ferments, you have to buy the bottle, you have to bottle it, package it, etc. With software, once you've developed it, you send it to the batch-burning machine and chew on your fingernails.
With the second point, it is similar to my DVD argument earlier. If software companies adjusted their prices to international markets, it would be much better. Even in US markets, I think MS finally took a step in the right direction by offering Office Home and Student Edition for something like $80. I still think it's a tad expensive considering the market it's aimed: poor college and high school students, but it's not bad considering hardcover textbooks these days are in excess of the $140 range. Coming back to the international pricing, again, the cost of setting up a business is much lower in a country like India. There's also not tons of investment money flying around the venture capital market, so collecting enough capital to set up a small office with a couple of computers with Office/XP is no trivial job. It's even worse that purchasing volume licensing for these two pieces of software will probably far exceed the cost of the actual hardware.
The final point I have to make is that I believe Microsoft sells almost none of its popular software in India if you factor out the stuff that comes bundled with a new, branded computer. This is largely due to price. Decreasing the price would hence sell more copies than they have done in the past, and would only increase revenues. I struggle to understand why an upgrade to XP still costs upwards of $100 (and is actually equal to an upgrade to Vista Home Premium). There is surely almost $0 costs associated with that product now, and it's nothing but a slap in the face of the consumer to make such a huge profit margin.
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