(Originally published February 2010.)

Seems everyone has an opinion on internet piracy recently. On one side we have people who claim that each downloaded of a pirated item is equivalent to theft: torrented the latest Menomena album? Might as well have walked into a record store, stuffed it in your bag, and walked out. On the other side you have a group of people saying that copying a file is essentially free, and so nothing of value is lost. I’m going to take a stab at the problem myself. The way I see it, the reality lies in the middle, as usual.

FIRST COPY COSTS AND THE HIGH COST OF PRODUCTION

One of the most common arguments from those for piracy is that companies don’t need to pay anything for distribution, therefore they don’t lose a thing from pirated material. Honestly, I’m not sure these people actually believe themselves: producing something definitely costs something. Even without the cost of producing physical media to contain the product, there’s the initial cost of production. For a smaller application, this probably isn’t a huge number, whereas for something larger - Creative Suite, for example - might cost something in the millions. The cost of a product is set to a level where the developer makes enough money from sales to justify the time spent in the creation phase.

On the other hand, the internet has undoubtedly made things cheaper. There’s really no reason an e-book should be as expensive than it’s hardcover equivalent. Likewise for music: albums purchased online should always cost less than the same set of songs purchased on a physical disk from a retail outlet.

LOST SALES

The huge argument against piracy is that each download is basically a lost sale. This is the basis for the “billions of dollars lost” statistic the recording industry loves, and it’s the idea on which damages are calculated in court cases.

This argument, however, is fundamentally flawed. It assumes that everyone who downloads a product would otherwise have purchased it. Nearly everyone knows that’s not the case, but I decided to collect my own statistics. All of the applications I’ve developed over the years have used an updated version of a registration management system I released a few years ago on CodeProject. Modified in the sense that it’s better coded, translated into C#, and - most interestingly - detects the few keygens which have been put out for it over the years.

Rather than just refuse keys generated by these applications, however, I offer the user a free, legitimate license code if he fills out a short survey about why he pirated the application in the first place. I also asked a variety of people I know as to why they purchase software. I compiled some results into this fancy pie chart, showing why people decide to pirate my applications.

It does seem to be quite clear: about 22% of these sales are definitely lost. However, it’s unlikely the unavailability of my programs on sharing networks would convince many of these 22% to buy the program - a sizable fraction probably just don’t think it’s worth the money. And dmca take-down notices are even less likely to convince 5% who pirate for moral reasons to buy it. Likewise, the 17% who don’t have the money to pay aren’t going to get a raise once the Pirate Bay shuts down. Software developers need to make a distinction between lost sales, and downloads, because there’s not a 1:1 relationship between the two.

HOW I DO COPY PROTECTION

For those that can’t afford it, they can have it. If you can’t throw down $20 for something which makes your life easier, you have bigger problems. I’m not going to be able to sell anything to them, anyways, so why fight them. In fact, I’ve actually put out my own keygen for a few apps I’ve written just to save these people from the viruses they might get from the illegitimate ones. Generally these people don’t know how to fix their own computer problems, and a $200 visit to the Geek Squad isn’t going to be great for them, either.

For those that are morally opposed to paying for software, there’s again not much I can do. They aren’t going to pay, so there’s no point in trying to make them. I could, in effect, punish them by fighting their keygens, but I understand that my views on things aren’t right or wrong, simply differing. I’m not helping them, but I’m not making it harder, either.

For those who can pay but don’t: This is where my registration program actually comes into play. Showing their name every time the program is launched helps to deter people a bit: it’s awkward for some to explain to their friends why they seemingly used the pseudonym “cracks team!111!!11one!cos(0)!!” when paying for a license to a program. Showing a personal message and asking them to take a survey appeals to emotion and creates extra work, which seems to decrease this number slightly. Overall, though, there’s still not a whole lot you can do, other than spend all your time fighting the crackers. Maybe that’s fine for a giant organization like Adobe, but I just don’t have the time.

*The number of people afraid of litigation seems abnormally high, until you realize that many people I surveyed bought applications for their office.