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Do you think a warning like this will deter people from ripping off your content or do you think it would just reinforce how valuable it is and perhaps even become more of a challenge to some?
I think most content thieves would not be deterred by such a warning -- they already know what they're doing is wrong, and they don't care.
There seems to be a tiny number of people who think that if there's no warning about not stealing, that things are okay to steal -- those people, at least some of them, might be deterred.
There also seems to a be a larger number of people who see such warnings as red flags. Purely because of the warning, they'll steal it even if they don't want it.
The changes I made:
1) I explain exactly the allowed uses and the *not* allowed uses of the material. I mention explicitely all cases, including blogging and hotlinking in forums.
2) In the section about the licence granted to visitors of the website, I put all copy outlining forbidden uses into ALL UPPER CASE, in bold and in red.
3) Same goes for the section that explains possible legal action for those violating the rules.
I see that the copyright/disclaimer page is accessed often. The new copy seems to have decreased the hotlinking by one third (from 30% to 20%), and I think this is a small success.
I actually don't mind if someone takes a small section of my work and links back to me with the rest. It's a trade-off that I win - their visitors see the content, check out the link, and stick with me. If I find a site plagarising me I usually check if a deal is applicable first before sending the "take-it-down or I will smite you" letter.
The bigger thiefs, the ones that steal for a living know how to cover their tracks, and feel less vulnerable. But I doubt it those will see a warning as a challenge. They want easy money, and are better off breaking into your neighbours' house when they hear the dog barking in yours. You never know how big the dog is, do you? Overall, I think warning has more pro's then con's.
As I am publishing high-quality unique content, I am constantly plagued by hotlinkers; a while ago I put some time into re-formating the copyright/disclaimer page, and find that this has helped to keep the hotlinkers in check. Where in the past it was up to 30% of all visits coming from hotlinkers, it's consistently 'just' around 20% these days.
Zett, I don't know why you don't just do a .htaccess block. There's also a css trick to stop people from copy and paste image infringements, so that when the image appears on your website it looks normal, but when it's on someone else's it has a big fat copyright notice on the bottom. That might be worth looking into.