Kottkamp 1
PHYS 125
Scott Kottkamp
Dr. Sherman
September 28. 2011
Valuable Data
Introduction
Information is at once common and invaluable, heavily guarded and easily stolen. Mankind has traded in information as long as it has material goods. Stored in the form of books, digital files, and the spoken word, information is bought and sold like a physical item; and like any physical object, information attracts thieves. Unlike physical objects, thieves of information do not need to actually “steal” anything; information can be remembered, its mediums copied, and the original left alone. This causes debate about who are the real “thieves”: people who take without paying, or those who charge money for things everyone could have for free. That conflict has continued on to today, now largely fought between software companies and digital pirates. A few years ago, the music and film industries were the main targets of pirates, but the bulk of piracy today involves video games.
Piracy is not theft. When someone rips a track off a CD or cracks a video game, the original copy is untouched and perfectly usable, whereas theft leaves the victim without the stolen good. The immaterial and easily reproducible nature of ideas requires a different type of law to protect it, copyright. Copyright protects the creations of an author by defining them as intellectual property, and gives the author the right to have their work distributed as they see fit (Ghazi). Intellectual property is owned by the copyright holder until the copyright expires, which means that consumers do not actually own the stories or software they buy, just the physical book or disc. Copyright protects the value of information by making it artificially scarce, meaning it treats the information as a finite physical object, despite the fact that it could be disseminated to everyone at little to no cost. In software, copyright is sometimes enforced via anti-piracy programs. These anti-pirate programs and the measures they enact to prevent piracy are collectively known as digital rights management, or DRM. A prominent example of DRM is Steamworks, made by video game developer/publisher Valve. The first and simplest DRM, called copy protection, prevents files from being copied to another disc or uploaded to the internet.
Two words should strike fear into the hearts of developers and publishers everywhere: “Copy” and “Paste.” Any type of digital file can be replicated easily, and thanks to the internet can also be shared with others. If a single person posts a downloadable version of a program, anyone in the world could obtain a copy of it. This is the root of piracy, a technologically enabled variant of copy-right infringement. Some argue piracy makes sense; digital files are not Kottkamp 2 scarce goods, like water or food. Thus, pirating a program doesn’t steal it away from anyone who needs it. On the other hand, real resources were spent developing the software, and the creators have a right to control how their intellectual property is distributed. Piracy violates that right, and harms the creators by preventing them from profiting off their own work. Worse yet, piracy is on the rise, and has grown to the point where it threatens to overthrow software’s artificial scarcity. In order to survive, the software industry depends on crafting business models that deal with the unlimited nature of its products. Two strategies in particular stand out, maintaining artificial scarcity via digital rights management, or finding ways of giving away the product for free while still garnering profit. Of the two, the latter is the better solution, as competing with the pirates better serves the consumer and eliminates most of the motivations for piracy.
DRM
DRM is an effort by publishers to squelch piracy and maintain a sales model that treats digital files as scarce objects. Publishers attest that without DRM, a larger number of people would turn to pirated copies, damaging the company with lost sales. But to consumers, DRM can be a real pain. Common features of DRM today include copy protection, limiting the number of times a program can be installed, required internet access to play, and reliance on the DRM to be available when needed. However, as noted in a report by HP employees Stuart Haber, Bill Horne, Joe Pato, Tomas Sander, and Robert Endre Tarjan, DRM cannot stop piracy. The 2003 article predicts the development of “draconian DRM” to fight piracy, while admitting that such systems might only reduce piracy at best (Haber et. Al, 8). Worse still, complaints on forums show that legitimate users are begrieved by the obstructive elements of the system. They are punished for having legally purchased the product. Meanwhile, a quick Google search is all it takes to find sites that offer people “cracks,” pirated copies of games that bypass the DRM measures. Thusly, it could be argued that these software systems are driving some legitimate users into piracy. The inability to thwart piracy stems from the fact that piracy is not caused by weakness in protective systems, but rather by an attitude on behalf of the pirate. The exact nature of this attitude varies, from those who believe that software should be universally free, to opportunism, selfishness, malice, irritation with DRM, and those who break the system for fun. Increasing control measures does not deal with any of these attitudes, and in fact may make some more prevalent or extreme. Coupled with the fact that there is no full-proof protective system, it is obvious that aggressively defending copyright against every offense is futile in addition to being time consuming and costly in terms of money and public relations.
On the other hand, DRM can be viewed as successful nonetheless if the goal isn’t to stop piracy. Rather, according to economist Koroush Ghazi, the real purpose is to delay it (Ghazi). While dedicated pirates will still crack the game, they aren’t the real threat. Rather, it is free riders, those who download pirated content, but can’t crack on their own, who contribute most to the piratical threat; few people can bypass the security on a file, but anyone with internet access can download a cracked file. These people do want the product, but they don’t want to pay for it, Kottkamp 3 and that’s where DRM steps in. DRM programs may not be good at stopping cracks after the game is out, but they are great at preventing pre-release and day one cracks. Because free-riders actually do want the software, many of them aren’t willing to wait for a crack to come out while their friends play legitimate copies. The longer DRM delays the appearance of a working, high quality crack, the greater the incentive is to buy a legitimate copy. In effect, all the inconveniences DRM puts both users and publishers through are analogous to a lock on a door. The lock won’t stop determined thieves, and could even lock someone out of their own house if the key is misplaced, but it keeps honest men honest. For the old way of creating and selling software to survive, DRM is a necessarily evil. It’s inconvenient and possibly insulting to the consumer, it’s costly for the publishers, but without it software (especially gaming) companies would have little reason to produce quality products (Ghazi).
Alternative: Freeware or Cheap Software
However, there is another pathway companies can take: compete with the pirates “by introducing alternate methods of charging for…content” (Haber et. Al, 9). At an extreme, this can mean offering products and services for free. This may seem like business suicide, but plenty of companies offer services and software for free already; Google, Youtube, Facebook, free to play games, open office, and Hulu to name a few. Despite not charging users, the companies in charge of these sites still turn a profit; Google is hardly in danger of financial collapse. In most cases, this is done via advertisements posted on the site, which pay the company to be put in a prominent position where the ads might attract the eyes of passing users. Ironically, piracy sites use this same method to turn ridiculous profits for their owners, because the high volume of users looking for cracks means a high volume of potential customers for advertisers (Ghazi). Another basic strategy is to allow free use of a basic version, and offer an advanced edition at a cost. Hulu follows this model, as do many MMO’s such as Runescape. Even if the full version of the software isn’t entirely free, the security offered by official sources may compensate. Hackers often add malware to cracks and repost them to piracy sites, knowing that the peer to peer nature of pirated software will ensure viruses easy distribution. Given the example of so much material already being free, but profitable anyways, there seems to be little reason that video games can’t go the same route, or at least become cheaper.
Cynics are quick to disagree with such a vision, on the grounds that not all genres of game are conducive to supporting free sales models. Indeed, the crux of Ghazi’s argument is not that piracy makes games unprofitable, but that it harms the quality of games by encouraging the creation of pirate resistant games. Games that are truly free tend to be either very simple, or of the Massively Multiplayer Online variety. MMO’s typically make money on the partial free to pay system, in which the base game is free, but the full game requires a subscription to access. Furthermore, just having an online aspect to a game makes it less attractive to pirates, because pirated games cannot access legitimate servers. This, along with a general demand for multi- player modes, has led some developers to focus on the multi-player aspect of a game to the detriment of the single player experience. Games on consoles are also harder to pirate than those Kottkamp 4 on PC, and so piracy has expedited the exodus to console gaming. Ghazi believes this led the more casual attitude of console gamers to bleed into gaming as a whole. Given the success of the console centric, multi-player heavy and increasingly casual friendly Call of Duty series, Ghazi is by no means wrong. Ghazi also contends that making games cheaper isn’t enough to prevent piracy; 90% of people who played the game World of Goo were using pirated versions, despite the fact the game only cost $15, received great reviews, and was made by an independent developer (Ellison).
Here I disagree with Ghazi, because despite being so badly pirated, World of Goo still made money. Part of that is because it was inexpensive to create, larger companies set themselves up to fail when they pump $30 million dollars into a game, and pour most of that money into cutting edge graphics rather than gameplay. Furthermore, what if World of Goo and many other games were bought by a site that lets users play them for free? The developer would make money by selling use of their game to such sites, and the site itself would make money via advertisements and/or the same limited free to play system MMO’s use. It would be a gaming equivalent to hulu. Another method is giving away the software for free, but charging for services such a tech support. Alternatively, companies could wind up using downloadable content to make money, while releasing the main portion of the game for free, or for a reduced price. This method has recently become popular among open source software companies, as a compromise between the ideals of free software and the needs of the business. Large companies that have long depended on proprietary business models have taken notice (The Economist). The popularity of XboxLIVE arcade, WiiWare, and PSN downloads attests to the potential of such a system. Some have brought up the concern that micro-transaction systems give companies an excuse to do a poor job on games, knowing they can flesh it out later. What these arguments overlook is that bad games garner bad publicity, and if no one plays them, no one will buy the downloadable content. It is also true that freeware relies on the internet for successful distribution, as the nature of the product hinders conventional methods. This is not much of an issue though, due to the ever increasing importance of the internet. Admittedly, these are optimistic projections, and the true future likely lies between DRM and freeware.
There are people out there who question why companies should have to compete with pirates, why they should have to appease crooks. The answer is that trying to beat piracy into submission is an exercise in futility and is ultimately counterproductive. Finding every pirate would be a hard enough task in and of itself; taking otherwise model citizens to court and suing them all over the pettiest of violations is bad for both public relations and the bottom line. For example, using emulations of Nintendo games is illegal, but Nintendo would go bankrupt if it attempted to pursue everyone using one. Not to mention that such actions are the fastest way for a company to make itself into a villain in the public eye, and justify the actions of pirates in doing so. As has already been shown above, companies cannot ignore piracy either. Making software cheaper or free to compete with pirates isn’t one option of many, it is the only solution.
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Conclusion:
Piracy has done a lot of harm, both to the industry and the consumer. For the industry, it’s led to lost sales; for consumers, it’s meant having to deal with DRM measures, and sometimes lower quality products. That said, piracy has also led companies to consider business models that greatly benefit consumers and the company. Cheaper software and freeware are one of these benefits. There is even reason to hope that DRM will become more user friendly. Music piracy fell in severity after companies eschewed CD’s in favor of systems similar to Apple’s Itunes. The system let users buy only the songs they wanted, instead of being forced to buy an entire album. That feature, along with cheap pricing on songs, made Itunes immensely popular, enough to deter some people from piracy. Valve’s Steam system may become DRM’s equivalent to Itunes, especially if Valve can make the system more reliable and lowers prices on games. DRM could become an accepted part of gaming, but piracy will remain. It must be remembered that piracy is caused by attitudes, not security flaws. Companies can, and should, attempt to garner good-will and sway attitudes by lowering prices where possible, considering non-proprietary business models, and operate honestly. In the end though, the ultimate decision rests in the hands of the consumers, not the company. All DRM, cheap software, or even freeware can do is try to provide reasons not to pirate software. DRM makes piracy inconvenient, but it does not counter piracy’s greatest strength, low cost to the user. Cheap software and freeware strip piracy of its greatest asset, and so they should be the main focus of future business models. Beyond preventing piracy, such measures also promote mutual respect between creators and consumers, and that respect is the only thing with a chance to truly destroy piracy.
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1: Piracy figures for 2008. Not to be considered entirely accurate, as they were put out by the pirates (Ghazi)
2. Companies around the world are considering or expanding open source software projects. (Economist) Kottkamp 7
Works Cited
Web sites, e-sources
“Born Free” The Economist. 28 May 2009. Web. 18 Sept. 2011.
Ellison, Blake. “World of Goo Co-Creator Claims 90% Piracy Rate.” Shack News. GameFly, 13 Nov. 2008. Web. 12 Sept. 2011.
Ghazi, Koroush. “PC Game Piracy Examined.” Tweak Guides. N.p., Dec. 2010. Web. 11 Sept. 2011.
Haber, Stuart, et al. “If Piracy Is the Problem, Is DRM the Answer?” If Piracy Is the Problem, Is DRM the Answer? Hewlett-Packard, 27 May 2003. Web. 10 Sept. 2011.
Wong, David. “5 Reasons the Future Will Be Ruled by B.S.” Cracked. N.p., 18 Oct. 2010. Web. 24 Aug. 2011.