I don’t have a lot to add to Jim’s insightful post about software piracy and the varying approaches to it. I agree with Techdirt that the methodology they’re using appears to be bogus–obviously, not everyone who’s currently pirating software would purchase it if they weren’t able to get a pirated copy. Their hand-waving (and, to my mind, unpersuasive) response to this argument is on page 14 of their report.
I also agree with Techdirt and Jim that it’s unfortunate that the BSA is funding shoddy research, because I agree with their conclusion: software piracy is bad for all of us because it reduces incentives for software development. (whether cracking down on software piracy is the best use of scarce police resources is a more complicated question) Bogus research like this paper make it much easier for the anti-IP radicals of the world to merely dismiss everything the pro-IP side has to say, which I think is a mistake.
But if you’ll forgive me for jumping on my soapbox, I’d like to point out what the software industry is not doing, for the most part, in the face of widespread piracy of its products: it’s not resorting to anything resembling digital rights management, at least for ordinary consumer software. When I buy a copy of Office or Photoshop, I typically have to enter a serial number, but that’s about it. It doesn’t try to limit the number of times I can install the software on my computer. It doesn’t install spyware-like monitoring programs deep in the bowels of my operating system.
That wasn’t always the case. In the 1980s, a lot of software companies tried a variety of techniques to copy-protect their software. Some would ship their software with hardware “dongles” that had to be attached to the computer in order for the software to work. Other programs would periodically prompt the user to enter a word appearing on a particular page in the manual. Many used a variety of clever techniques to make disks difficult to duplicate. (In fact, my father did custom copy-protection work for Apple II game publishers in the early 1980s)
Those tactics have largely been abandoned. What the software industry found was that the determined pirates have little trouble bypassing such controls. Indeed, there is a whole online community of computer hackers who crack software copy protection schemes for sport. Yet the protections frequently inconvenienced and angered paying customers–customers who might lose their dongle or manual, or customers who are unable to make a backup copy of their software. Eventually, the industry figured out their copy-protection schemes were counter-productive, and they mostly abandoned them.
The music and movie industries, I think, are on the same path. They’re just about 20 years behind. They’re slowly learning the hard lessons that the software industry learned in the 1980s–inconveniencing your paying customers isn’t a good business strategy. I find this particularly ironic, because many of the same companies that abandoned copy protection of their own products in the 1990s are now selling “DRM” solutions to the content industries.
Hell, some of them don’t even try to hide it. Here’s Steve Jobs, whose company created one of the world’s most widely-deployed DRM schemes in a 2003 Rolling Stone interview:
When we first went to talk to these record companies–you know, it was a while ago. It took us 18 months. And at first we said: None of this technology that you’re talking about’s gonna work. We have Ph.D.’s here, that know the stuff cold, and we don’t believe it’s possible to protect digital content. [There's] this amazingly efficient distribution system for stolen property called the Internet–and no one’s gonna shut down the Internet. And it only takes one stolen copy to be on the Internet. And the way we expressed it to them is: Pick one lock–open every door. It only takes one person to pick a lock. Worst case: Somebody just takes the analog outputs of their CD player and rerecords it–puts it on the Internet. You’ll never stop that.
The recording industry, sadly, didn’t listen to his advice. It looks like they’re going to have to shoot themselves in the foot a few times before they will come to their senses.