"Worldwide losses due to software piracy were a staggering $11.4 billion in 1997" (SPA). "In 1997, the worldwide estimate of losses [due to piracy] was approximately $5 billion" (RIAA). "Worldwide piracy is estimated to have cost the U.S. entertainment software industry $3.2 billion in 1997" (IDSA). From the facts shown above, computer piracy is a costly business for many companies. Although there are many advantages in piracy for the end user, the damage done to the industry in lost revenue, increased prices, and lost jobs is staggering. The advantages do not outweigh the disadvantages. The chances of being caught are increasing with several anti-piracy organizations hunting down offenders. Creative pirates have come up with many arguments as to why they think piracy is legal, or why it should be. But, contrary to what many of the uninformed pirates believe, most of their arguments are invalid. The organizations are lobbying the government to pass new laws to close the loopholes in which pirates escape, and to increase the already large fines which offenders must pay. With the tremendous expansion of the Internet, anti-piracy efforts need to be re-evaluated and modified to address this new, powerful instrument of piracy.
Computer Piracy is the unauthorized reproduction of a copyrighted work without the consent of the copyright holder. Computer piracy started in the late 60's and early 70's when programs run on the computer "switched from hard wiring to data cards" (Dakin, 20). While the computer industry became more advanced, so did the methods and types of software piracy.
In the early days, computer programs were very small. The means of transfer was slow. With the increase of program size, the method of data transfer has evolved from computer disks holding 0.360 MB to recordable CDs holding 650 MB. Ways of transferring information have gone from giving your friend a disk with software, to local bulletin board systems, to the globe spanning Internet.
Rising costs of software, and increases in technology have also made piracy more appealing. Methods have been developed so you can fit 6 hours of music onto a single CD, and play your favorite video and arcade games on your computer.
Why pay $2000 for a program when you can download it for free in just a couple of hours? Why should you buy a music CD with 10 songs for $15, when you can have one with 10 of your favorite songs from the artists you choose, for a few pennies? And why would you pay $40 for a video game, when you can fit over 700 different games on a CD to play on your computer, for next to nothing? The answer that most legitimate consumers would give as to why they don't pirate are the negative effects that piracy has.
The effects of computer piracy are numerous. The consumers of piracy run the risk that their computers may be infected with viruses. Pirates also receive no documentation, and no technical support. Pirates run the risk of massive fines and possible jail sentences if they are caught.
Developers suffer greatly from piracy. The combined amount of lost revenue from different types of piracy totals in the billions every year. Developers use part of their revenue for research and development for future versions. If there isn't money to sustain R&D, then the developers won't be able to hire new employees. "There were 130,000 jobs lost due to software piracy in the U.S. alone in 1996" (BSA).
Legitimate consumers also feel the effects of piracy. They pay higher prices for the product. They also miss out on new versions of software due to companies going out of business.
To combat piracy, the developers have formed many different organizations. The Business Software Alliance (BSA) and the Software Publishers Association (SPA) were formed to fight software piracy. The Recording Industry Association of America (RIAA) is the main combatant in music piracy. And the Interactive Digital Software Association (IDSA) is the advocate for the video and computer game companies.
Computer piracy can be divided into three main areas, Warez, MP3, and Emulation. One advantage of using a computer to perform these types of piracy is that each copy of a program, song, video, or game is an exact replica of the original. Unlike copying a movie on your VCR, or a song off of the radio, or from a friend's CD to a tape, there is no degradation in the quality.
"Warez is a slang term for pirated software" (BSA). The Internet is currently the most common way to get warez. Internet piracy can be completed in your own home with little chance of detection. The vastness of the Internet makes it very easy to find whatever you want, whenever you want, for free, or for a small fee. Common methods of Internet piracy include E-Mail, News Groups, IRC, Mail Order, FTP, and the World Wide Web. Each has its advantages, and disadvantages.
One of the reasons pirates claim that piracy is acceptable is because software is so expensive. This argument is invalid. The reason that software is so expensive to begin with, is because of software piracy. According to a study conducted by the International Planning and Research Corporation "worldwide losses due to software piracy were a staggering $11.4 billion in 1997" (SPA). In order to recuperate these massive losses, software companies have had to increase prices every year.
Pirates claim that if they download a pirated program and like it, that they will purchase it. They do not want to waste their money on a program only to find out that it doesn't function the way they thought it would. Some pirates do buy programs if they like them and use them. However, the majority of pirates will never buy the programs once they have them. Most warez traders treat pirated software like "digital baseball cards" (Pogue). According to one pirate, Jake, the value of these "digital baseball cards... is the prestige of ownership". Jake does not even know what half of the programs he owns are. And, according to a poll by 3dnews.net, 40% of pirates think that "three quarters of [software isn't good], so I'm not going to pay for [it]" (Hamlin). Also, 12% of pirates "enjoy getting something for nothing" (Hamlin). That means that over half of the pirates wouldn't buy the software even if they enjoyed it.
Another argument is that warez pirates have nothing to worry about because it is not illegal to distribute warez. Another false statement according to the BSA. "An author can seek civil damages in the amount of their actual value, or statutory damages of $100,000 per work infringed. Criminal penalties include fines of up to $250,000 and jail terms up to 5 years, or both. In December 1997, President Clinton signed a law called the 'No Electronic Theft' (NET) Act that allows criminal prosecution of copyright infringement, even where there is no profit motive, closing a loophole in U.S. Copyright Law" (BSA).
A final argument by warez pirates is that because the Internet is so large, and there are so many sites, that they will never be caught. This is not true. The BSA, SPA, and many other organizations are actively pursuing pirates, shutting down hundreds of sites every year, and prosecuting hundreds of people. The number of prosecutions increases every year. Many organizations have undercover agents, web crawlers, and have hotlines for people to disclose information on pirates.
MP3 is a relatively new form of piracy. MP3, short for MPEG-1 Layer 3, is a compression standard that can compress music files with around a 10:1 ratio, while maintaining the same quality. What once would have taken 10 MB of space for a one minute file, now only takes 1 MB. It is this great decrease in size that has attracted the attention of many pirates. With an average modem, it only takes a few minutes to download a song. And with the advent of the CD recorder, pirates can uncompress the MP3s and make a CD with an hour and a half of their favorite songs. That CD can be played in any standard CD player. Even better, the pirates can leave the songs compressed and fit 6 and a half hours worth of music on a CD, which will play through their computer. To make things even better, there is a device in development similar to a walkman which will play MP3 compressed files. While the MP3 compression technology is not illegal, the distribution of MP3 files without the copyright owners consent is a violation of the copyright law.
One MP3 pirate claim is that just one person can not make a difference. MP3.com claims that "less than a buck on average of ... $16 [per CD] makes it back to the artist" (MP3.com). According to the RIAA, $5 billion in revenue was lost due to music piracy. With the artist already making so little, pirates are only compounding the losses of the artist.
Many MP3 pirates claim that because the Internet is so large, that they won't get caught. This may be true for most people right now, however, with the formation of groups like the RIAA, the chances are increasing that they will be detected. The RIAA says that is "monitors the Internet daily, scans for sights that contain music, and addresses infringements of member companies' rights. In many instances where [it has] found unauthorized use of sound recordings [it has] been successful in having the infringing sound recordings on those sites removed." (RIAA) According to the RIAA, it has made "1,481 arrests" (RIAA) from 1993 to 1997.
Some pirates claim that since they are not selling the music, they shouldn't be punished. Some claim that web sites they run which carry MP3s are just a backup for the music. However, "in November 1997, the No Electronic Theft Act was passed, which criminalizes actions on the Internet even if there is no financial gain, including copyright infringement of sound recordings that previously were not subject to criminal liability" (RIAA). The penalties for music piracy are harsh. The RIAA says that "anti-piracy statutes generally carry penalties as high as five-year jail terms and $250,000 fines. In the last few years, state statues for piracy have been upgraded to felonies in 33 states" (RIAA). The RIAA also claims that "in 1997, more than $9 million in judgements was awarded in civil suits..." (RIAA).
MP3 Pirates complain that the music industry is not embracing the MP3 technology. But the music industry has good reason not to. Frank Creighton, "associate director of the recording association's anti-piracy division..." says "...until the pirate market gets addressed, what's the incentive... if songs [the music industry is] going to charge for are available elsewhere for free?" (Brown). MP3 piracy is slowing the conversion to what would be a very beneficial technology to both the consumer and the music industry.
Another form of computer piracy that is growing very fast is called Emulation. Emulation is the process of imitating another machine, through a software program, so that you can run software compiled on the original machine, on your machine. In other words, this allows you to run Macintosh or Amiga software on your IBM. It allows you to play old arcade, Atari, Nintendo, Sega, Playstation, and even Nintendo 64 games on your computer.
Emulators are the software programs that emulate the hardware of the original machine. A ROM, which stand for Read Only Memory, is a copyrighted software portion of the original machine. The ROM is the game for a system, which usually comes on a microchip inside a cartridge format. The ROM is what contains the Super Mario, or Sonic the Hedgehog game, and is what the consumer purchases in the store for around $50. Pirates use a backup device to copy the ROM image from the cartridge microchip, to a software format on the computer. They then run the emulator, which loads the ROM, the combination of which imitates the hardware of the original machine, and the microchip of the cartridge. While the distribution of emulators is not illegal, the distribution of ROMs is.
Games which cost $40 in the store, take 10 minutes to download, and only take up 1 MB of disk space. These ROM images are small, and easily found on the Internet, which makes this type of piracy appealing. A pirate can store around 500 ROM images on a Recordable CD, and download the emulator instead of buying the original console system, a savings of over $20,000. While it may take a 10 year old a month or two to save up enough money to buy one game in the store, he can download every game on the market, for free. It is also possible to buy a CD with the 500 or more games compiled on it for under $15 on the black market of the Internet.
One of the emulation pirate's main arguments is that they are not breaking any laws. It is legal to make a copy of the original game for backup purposes. That, for the most part, is true. The IDSA says that "U.S. Copyright laws permit making of a 'backup' copy of computer programs for archival purposes. However, the right to make backup copies of computer programs for archival purposes, as embodied in 17 U.S.C. section 117(2), does not in any way authorize the owner of a copy of a video or computer game to post or download a copy of that game to or from the Internet" (IDSA). This means that users are allowed to have backup copies of ROMs, if they made the copies themselves, from their original cartridge, but are not allowed to transfer them over the Internet. Most emulation pirates download ROM images of cartridges which they may own, from the Internet, which is still illegal.
Another argument of the emulation pirate is that it is alright to download games because they are no longer available in stores, so the company that made the game no longer makes a profit. The IDSA says that this argument is invalid because "the current availability of a game in stores is irrelevant to its copyright status. Unlike trademarks, copyrights are not considered abandoned if they are no longer enforced. Copyrights do not enter the public domain just because they are no longer commercially exploited or widely available." (IDSA). According to the IDSA, "copyrights... are valid for 75 years from the date [that the product was published]" (IDSA). Also just because the company that made the game is no longer profiting from it, does not mean that it is not available in stores which sell used games. That means that emulation pirates are taking the business away from these used game stores.
Another argument along that lines by emulation pirates is that they are helping promote the company that made the game. As the IDSA puts it, they said that "People making emulators and ROMs are helping publishers by making old games available that are no longer being sold by the copyright owner. This does not hurt anyone and allows gamers to play old favorites" (IDSA). Emulation may promote the company, however, Activision, one of the companies that made games for the Atari 2600 tried to bring back their old titles for play on the PC. Activision "is selling two 'Atari 2600 Action Pack' CD-ROM titles that contain an emulator and several [ROMs] of classic 2600 games...However, the widespread availability of illegally reproduced titles may present a problem for the company" (Atwood).
A final argument by the emulation pirates is that just one person will not make a difference. This argument is also invalid. The Internet is growing at an alarming rate. It has been estimated that there are now over "50 million people online in the United States" (BSA). If only 5 percent of those people bought one of the CDs with 500 games, worth $20,000, it would make a huge impact. According to the IDSA, "worldwide piracy is estimated to have cost the U.S. entertainment software industry $3.2 billion in 1997" (IDSA). They also say that there was "$5.1 billion in entertainment software sold in the U.S. in 1997" (IDSA). Which means that pirates stole close to half of what the software industry should have earned.
Of course, all piracy is immoral, it is wrong to steal. Just because you are not stealing something from the shelf of a Wal-Mart store, does not mean that you are not stealing. According to Abbas Aminmansour, "Regardless of how the infringer sees it... piracy is theft of intellectual property and is no more justifiable than shoplifting, stealing cable service or other utilities. Developers invest time and money to develop a... product and deserve to make a fair profit - so they can develop new ...products. This is particularly crucial for small developers... whose survival depends on income from sales to a limited market" (Aminmansour).
Obviously, piracy on the Internet is not going to be completely shut down just by a few aggressive organizations. If they shut down one site, 10 more will pop up. The way the situation is now, there is no way to stop it.
However, several methods proposed by Peter Troost may help in the war on piracy. One way would be to "build copy protection into an operating system. Through the operating system, the 'copy' operation could be monitored to check for patented software" (Troost). Another method Troost proposes is "meterware" (Troost). Also known as "superdistribution" (Troost), this method would make the program "count how many times [the program] as been invoked. The users would have to dial into a billing number once per month" (Troost), and charge the user a pay-per-use fee. "Meterware" (Troost) could be modified to combine how many times the program is run with how long the program runs. This modification would compensate for cut and paste operations, and system crashes, when the program may only run a short time.
In conclusion, the damage done to the industry and legitimate end user does not outweight the few advantages that piracy does have. The chances of being caught, the fines, and the jail sentences are constantly increasing. Contrary to what many of the uninformed pirates believe, most of their arguments are invalid. With anti-piracy organizations lobbying the government to pass new laws, the few valid arguments that they still do have are disappearing. Even though anti-piracy organizations have made great strides in their fight, with the enormous growth of the Internet, current anti-piracy methods will not completely stop piracy. Organizations and industry need to come up with solutions to increase copyright protection, inform the uneducated, and negate the advantages that computer piracy has.