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August 23, 2005



Piracy is viral marketing. For most content (as opposed to application software), one of (if not the) most important advertising sources is buzz or word of mouth. Telling your friend about it. Buzz depends on ALL the users, not just the users who bought legal copies. Now admitedly, some of those buzz-generated new buyers will find pirated copies, but some will buy legal copies. And that buzz also effects the next piece of content, the next book in the series, the next album or new chart, or the next movie by that actor/director - or the last one if you haven't tried it yet (to keep pointing in the direction of the long tail.)

If there is someone who WANTS to use your content but will never buy it, then it is in your interest to have "pirated" copies around. If they're not going to buy it, at least they can help generate the buzz. And maybe they'll buy one later when they can.


There are fundamental differences between software (Microsoft's case) and content (e.g. MPAA and RIAA's interests) as noted above. But these differences are more profound than the issue of piracy, and they spell potential doom for content providers, though simple, legal market forces.

Music content producers (i.e. artists), in particular, make their money on tours, and enter into agreements with record companies to make recordings that serve to promote the tours. It's the record companies that make their money on the recordings themselves. Thus far, this has been a symbiotic, contractual relationship.

Now, what happens when you have a new way (e.g. the Internet, using p2p technologies) to promote the artists directly? No more need for a middleman. In other words, no more need for the record companies. It's a clear-cut example of market forces phasing out an obsolete market niche and serving to return things to a condition closer to their constitutional roots -- the promotion of science and useful arts directly. No more middleman.

The companies represented by the RIAA know this. They know that they no longer have a monopoly on the means to get artists' content into the hands of consumers, thereby promoting the artists' real money-making activities (again, tours). They've been dealt out of the game by technology, and are responding by attempting to legislate their business model. They desperately want p2p to go away completely, before its legal uses make them irrelevant completely. And it's not going to happen. The RIAA is headed directly for obsolescence, which is likely one reason why they've been on the leading edge of fighting piracy so ferociously.

Movie production is a more troubling issue, since the availability of home theatre equipment makes it possible for people to enjoy movies as they're meant to be enjoyed. I'm not sure what the solution is for that; it's pretty clear that movie producers and distributors will need to come up with additional ways to get people into theatres. I suppose IMAX is one idea (screens much too large for home users to ever compete with).

As for TV, I would suggest that television production shops should explicitly differentiate between online-traded content that includes commercials and content that doesn't. Sure, the consumer can still fast-forward over the commercials (just as they do at home with VCR's). But at least the commercials would still be there and still serve as a revenue stream. It would also promote the shows themselves, and promote goodwill between TV producers and consumers simply looking for their favorite shows in the most convenient form available. P2P offers real advantages for television producers if and when they grasp the potential. Perhaps movie producers could also learn from this and develop ways to maintain, or even increase, revenue through the same process.

Matt McIrvin

Cory Doctorow said:

"Non-DRM CDs have experienced a slew of innovation[...] DVD players have not seen a single substantial new feature in their decade in the market."

They have seen some, but it actually supports your point, since the most interesting new features aren't about playing commercial DVDs, but about DRM-less or DRM-stripped content (e.g. CDs holding video files using popular codecs like DivX and XviD; there's a Philips player that is particularly good with these, and the thing is selling like hotcakes).

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A large group of you advocate piracy on the grounds that it ha a high chance of helping the companies being pirated against. I steal MS Word to use at home and end up getting hooked and having my boss buy it for me a work.

There is nothing wrong with this argument and is correct from a theoretical standpoint - it is possible. But if this was empirically viable for companies, I would expect them to pursue legal forms of free distribution of their product, not impose an additional "ethical" cost (yes, economists recognize these) on those who get pirated software.

In fact, isn't this the purpose of offering demo or non-Pro versions of software? Get a person hooked, their value increases and they purchase the additional features of the Pro version.

I find it tough to swallow that companies are that much inthe dark to fail to recognize if piracy were potentially profitable. But, they were wrong before...

John "Z-Bo" Zabroski


Personally, I am not sure you accurately frame my views. On the face of things, I may come across as an "advocate for piracy," but I am not.

I used to be an advocate for convenience - the luxury that is intended to save a consumer time or frustration.

Luxuries are driven by the decisions business make and their goals. Businesses ultimately care about shareholder value.

When I came to this view, I ultimately decided I was an advocate for CONVENIENCE WITHOUT LUXURY. In other words, convenience should not be an indulgence but a necessity.

In today's world, I would argue almost nothing can be considered an indulgence any more because, oddly enough, everything has the appearance of being indulging. Much is made of the effects of globalization and how competitive factors are more equal. I think that means something: Distribution is more important than ever. There is also the "Economics of Abundance," which touts many goods and services have a hyperabundancy and are easily distributed, which I would say is a corollary to distribution being more important than ever. i.e., "If there is lots of it, I should have some of it."

Would you say that is a politician's answer or a good reply?.. or simply confusing? ;)

John "Z-Bo" Zabroski

I was reading an old blog entry from another blogger, titled Mark Pesce on BitTorrent. Seems like it could be worth (another?) look, Chris. It coincides well with your reason talk with Bram Cohen and thoughts about piracy. Mark does a fine job of a Call To Action for "Just Enough Piracy", but approaches it in a different way and more clear reasons. He looks at it as a pirate, not a business. Here is the article in a nutshell:

1. Suppression of a method of piracy only leads to the profusion of alternatives (i.e., Napster shutting down led to Kazaa, Gnutella, LimeWire, etc.)

2. The suppression of "seductive technology" giving rise to a profusion of alternatives also gives way to more efficient piracy. (i.e., BitTorrent is a better P2P network than Napster, but would BitTorrent have caught on as easily if Napster was never shut down, forcing "leachers" to look elsewhere? Hypothetical, yes, but worth wondering). Attacking a "single point of failure" with piracy technology only lead to piracy becoming a more pervasive network - with many points needing to fail for there to be a network failure.

3. BitTorrent was possible when Bram "Cohen realized that popularity is a good thing, and designed BitTorrent to take advantage of it. When a file (movie, music, computer program, it's all just bits) is published on BitTorrent, everyone who wants the file is required to share what they have with everyone else." As I see it BitTorrent is actually the antithesis of the Long Tail, then, since it works better with hits than it does with "misses."


Aaron said:I would expect them to pursue legal forms of free distribution of their product, not impose an additional "ethical" cost (yes, economists recognize these) on those who get pirated software...

I find it tough to swallow that companies are that much inthe dark to fail to recognize if piracy were potentially profitable. But, they were wrong before..

The company itself, though, doesn't pay the 'ethical' (I prefer 'psychic') cost of piracy and so will not consider it in making decisions.

I think software companies are well aware that a bit of piracy is good for them, but they still need to make it a bit more difficult to pirate than to buy, lest they lose all their customers to piracy.

The software company is effectively price discriminating in allowing piracy. They make some people pay while letting others (those who don't mind going to a bit of trouble downloading a cracked copy and are willing to bear the psychic cost of being an evil pirate) have it for free, but benefit from the network effects - your boss buying word at work - of an increased user base.

They ideally want to make the lock heavy enough that it puts people off piracy, but not too heavy that anyone not willing to pay the retail price goes to a competitor or leaves the market altogether.

Of course, Chris's argument that DRM and other forms of copy-protection pisses off your paying customers complicates things somewhat.


Brad says: The company itself, though, doesn't pay the 'ethical' (I prefer 'psychic') cost of piracy and so will not consider it in making decisions.

That's just plain wrong. Its like saying a company doesn't lose when its customers have to wait in line. If the customers bear an additional cost from purchasing the product, it lowers how much a customer is willing to pay for the good. The company must charge less than if the customer did not bear the discomfort.

If price discrimination is the goal, then perhaps it is worth the "psychological cost" as a means of ensuring everyone doesn't pirate.

I doubt that there aren't better ways of distributing to a select segment of the market - e.g. promotional giveaways, download one song free (like amazon)...


If the customers bear an additional cost from purchasing the product, it lowers how much a customer is willing to pay for the good. The company must charge less than if the customer did not bear the discomfort.

Yeah, you're right, I obviously didn't think that statement through.

If a software company could find a way of distributing its product free to people who wouldn't be willing to pay for it while charging others, without imposing the psychic cost of piracy (though I dare say many people don't feel at all guilty - I don't)then that would be preferable.

Free but stripped-down versions of commercial software is a way of doing this, but there is still the cost of giving users a crippled version, which would lower demand in much the same way as piracy-guilt(tm). I guess offering a fully-functional free version to non-business users is a pretty good way, as long as you can prevent businesses from using it.I'm not sure about promotional giveaways, they don't really discriminate as to who is willing to pay what.

It probably depends on the individual product as to which method of free distribution is likely to be best. With Windows, for example, ability to pirate is probably quite inversely related to willingness to pay. It takes some (perhaps small) degree of technical-savvy to find and get a pirated version of windows working with updates and whatnot. The tech-savvy are also the most likely to switch to linux if they were forced to pay. Most people probably don't lose much sleep stealing from Microsoft either.


Chris:I'm not sure if you really get this. I usually agree with you, but I'm kinda off here. DRM, is designed not to stop the pirate groups. Oh that's what they say it's for, but it's not. It's to prevent casual copying. It's to provide enough annoyance, and enough of a technical problem to prevent people from ripping a CD for a friend, or sending an MP3 over IM.

It's things that people, to be honest, don't think twice about. In our cuulture, it's seen as fine and dany. Always has been. But it's still REALLY illegal. And that's a huge problem.

The real problem is the whole concept of copyright is out of control, and needs to be put back in place. The public domain needs to be restored, and brought up to date for a digital world.

chris anderson


Yes, copyright is out of control and our entire system of intellectual property rights protection needs to be rethought for the digital age. Indeed, I'm a huge fan of Larry Lessig's work on this (which is why he's one of our columnists). But I'm also a realist. We can't wait for Congress to solve this problem because A) they probably won't and B) anything they do will take years.

So the pragmatic solution is to advocate for technology solutions that offer the bare minimum of protection necessary to encourage rights holders to release more content legally, while miminizing the inconvinience to consumers.

Don't get me wrong: I *hate* DRM. Case in point: I just bought some albums from Rhapsody, but when I transfer them to my Treo it says it can't play them because the rights didn't transfer. So I have to burn them to a CD and rip them simply to strip off the DRM. That's just badly implemented technology. But I love being able to download and listen to music and supporting the services that let me do this well (a category that does not include the p2p networks, which are too much trouble for me).

These are early days yet, and I suspect that the business world will solve this problem before the political world does. What I'm saying is that a miminum-fuss solution to DRM is best, even if it allows some piracy. Better laws would be better, but I doubt that's going to happen. Better technology actually might.


IT is a shame that it is very long blog with contribytions by many authors who have expressed several ideas in relation to the music piracy. I'm impressed by the auuthor at the beginning of this blog who blamed thed microsoft and cheap software for the existence of the piracy. I think the RIAA would be very impressed by those thoughts simply because MIcrosoft is a force behind the resistence to the RIAA lobby in the US Congress for the enacting of anti-piracy laws. Actually the said author is very misguided as to the Microsoft Software being responsible for the piracy. If anythging it is the way Internet vservice is delievered for which Microsoft is not at all responsible. really. If anything it is the RIAA itself wsho is responsinle. Not directly in that RIAA is not the one is or was respomnsible for the creation of that method of the delivery of the internet service. It was created by folks who were very misguided but more misinformed than being misguided. One of those folks was Steve Case of AOL. These folks did not know themselves that this method would lead to the piracy and loss of livelihood of the musicians who are the members of RIAA. But now RIAA is fighting Piracy but on wrong front. RIAA can help to correct the situation. The situation can be corrected by RIAA lending its financial support for the ceveloment of an alternate method of the dlivery of the internet service. I call it the server side processing of the data. Presently all the tasks are performed by the client. The server merely performs the clerical work of storing the documents and providing them to the clients when they ask for the documents.

Now people are using one system of surfing the net. There is no way they can even think of using an alternative method of surfing the net. THey could think of using the alternet method of surfing the net if it existed.

That is why it is paramount for the RIAA to lend its financial muscle to provide seed capital to develop this method of surfing the bet and then for the advertising needed to get people to use this method of using the net.

Simultaneously RIAA could then lobby the Congress to ban the present method of surfing the net.

This method of surfing the net is described at


Various authors in the blog have expressed various ideas that will never be able to wipe out the piracy since they don't attack the root cause of the existence of the piracy which the method of surfing the net now existing.

My name is Satish Bhardwaj and I'll risk spammers by giving my email address as fakir005@aim.com in case RIAA would be interested in rooting out piracy.


It’s not right to consider digital piracy as marketing advantage. Firstly it contradicts to most international laws. Secondly it brings companies to lost revenues. However an “enough piracy” can help in a digital product PR and distribution. But it mostly depends on digital product type. For example it might be useful for such a things like CD/DVD containing music, films, e-books, but not for PC software. If we talk about potential entertainment products customers in this case we can imagine that by example some music album having unbeatable DRM will not reach all its target audience and risks to remain relatively unknown. But with more accessibility it will come to all potential customers and among them can be many people who will bye its licensed version for full price having known and fully tried it from unofficial sources like pirates. But software cracks and piracy can bring developers and vendors only for lost revenues by the next reasons:
- Most software products have specialized direction and limited target audience. In this case marketing people of such a companies set the reasonable prices for their users that need this solution and ready to pay for it. Otherwise if the application cracked and available to free use the big part of these potential customers will prefer to use free or low cost illegal copies to save their money.
- Where an application has wide targeted audience and many competitor products its cracking and piracy is the shortest way to large volume lost revenues. And in this case we cannot consider free application availability through cracked versions and piracy channels as a promotion opportunity. The best marketing solution for such a products is a wide range of free evaluation versions with flexible limitations legally available, additional freeware distribution, differentiation on light, Std and Pro versions. And it gives possibility to all real potential users to try software before bye it. Then to avoid illegal use and make a large part of users to pay the software has to be strongly protected. As a result all who need the program and ready to pay for it will buy it for full price that really will raise revenues of application vendor. An ‘uncrackable’ software protection cannot negatively influence to sales because it will differentiate people who cannot and in all cases won’t buy an application copy from target customers who really need the solution.

As a software developer and vendor I can say my opinion is based in practice. Having weak protection I found my program cracks and keygens in several days after software release. And among users who really needed my software solution paid for it only most honest people and a large part of ready-to pay people used its illegal copies. Having found and using in my product one of today’s strongest software protection tool EXECryptor from strongbit.com made my application new updates uncracked during about 2 years. I have significant sales raise. In addition to supply most possible customers with solution they need by cannot to pay full price my company has flexible pricing such as great discounts for educational and non-profit organizations and all people who is able to contribute a reason to get discount so they pay money they can.


Ha! You actually hit it right on the head, although there is a little more to it than p[ricing policy alone. Why would software manufacturers produce NFR (Not for Resale) Software otherwise than to have it bought and illegally redistibuted. Why would MS allow their own staff to buy COA's and then introduce activation technologies many years after they could have eradicated the piracy issue usinmg the self-same? USAGE is built on familiarity is why. PROFIT is built on 'THE ALGEBRA of NEED!' MS actively encouraged the distribution and production of pirate versions of their software and still do and here is how and why and whilst I am at it, lets name some names...

a) By doing deals with companies who are allowed to continue distribution of illegal COAs and products PROVIDING they inform MS of their pirate suppliers ( Atomic Park allegedly)

b) By not prosecuting the distributors of online pirate versions, CDshop.com anyone?

c) By allowing offshore companies, like Vertex (allegedly under a loom anyways), in the carribean to actually sell versions of server and exchange 2003 with xeroxed manuals and beautifully laser printed boxes (although they are a US MS DSP!)

But why?

Well if you destabilize your reseller market by allowing it to be dominated by illegal product and illicit grey market practices, all of which have a very negative impact on the end user, at no cost to your reputation, where is an end user going to come to buy. Yup. The software manufacturer. AND the most successful manufacturers of software, ie MS and symantec, encourage just that! So what about the law? Well try suing them under the RICO act. You will have to get through the federal judges they pay off with branded duffle bags of cash left on the door-steps of their sealed hi-sec condo buildings. THEN you gotta get through the panel that sits on the 9th Circuit court once they judges who refuse you a jury trial, even though its against the law to do it, do, then yup, you guessed it, you have to post an enormous bond which can be taken and siposed of at the will of the 9th circuit, which is, yup, composed by federal judges. Sound like a conspiracy theory. Yes it does. But...MS has done this for YEARS, they have, for example litigated against the most succesful of their resellers out of business. The software industry is dirty because where it isn't AHEAD of the law, it buys it off. I am a software developer, heavily involved in the industry for many years. My wife is a DA. Her father is a PI. I am saying this because I have tried, with their help and several million dollars, to achieve exactly that which I have spoken about, to be met with the response of a 20 year federal prosecutor who stated 'TODAY IS THE DAY I HAVE LOST MY FAITH IN THE JUSTICE SYSTEM'

Software companies have not only encouraged piracy, but foster in their business strategies to destabilize and manipulate the market, not just their prices! And worse than that they 'hack' the law, which is ultimately no more than an instruction language, to their own ends. BEST software, for example, is an MS clean-up operation, that buys the competition that MS cannot hold for anti-trust reasons. You just have to do the research. Anyone?

Engr. 'Wale K.

To Long Tailers,

Sometimes I don’t know what to say concerning battle between Crackers and Programmers. I have heard a lot of consumers clamoring for return of product and money back because of a complex security built into a product. In the other hand I have heard a lame shareware Programmer that is selling his software for $5 dollars, with a wife and two kids in school, he was not making much, so on the release of his next game, he decided to talk to me, I analyzed his little copy protection based on date technique that is common around.

When I compiled and ran the game, alas! The game was fantastic, I told him to let me see some of his released games, the two I tested proved that his game is quite good and the reason he was not making much was because the protection he was using is weak and known to most young crackers. He was auguring with me on the basis that nobody can pirate a $5 dollar game. Immediately in his presence in my office, we searched the net and found pirated copies of his $5 dollar games littered on most crackme sites. How about that?

I think if any Programmer has developed a kind of new hot in demand software, such Programmer should go a long way to protect it. So that if crackers won’t stop using free software, they will have a long way to crack it too, and if all Programmers adopt embedding protection in their product crackers can be reduce to a balanced percentage. But I will never advise any Programmer to release a product without any protection; I am even suggesting that all Programmers should learn cracking, just like I did.

I am about to finish my own software too. I am still considering applying EXEcyptor on top of my own security; after all I came into programming to make money.

Engr. ‘Wale K.
Lagos, Nigeria.

maria martinez

i want free music


Sue the pirates and screw them, I'm sure they won't dare it again.







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The company offers popular consumer freeware (the BitTorrent client). The company also licenses its technology, called BitTorrent DNA (Delivery Network Accelerator),to websites "to add the speed and efficiency of patented BitTorrent technology to their current content delivery infrastructure, significantly reducing bandwidth costs while increasing capacity over standard HTTP delivery solutions." The third product offering is the BitTorrent Software Development Kit (SDK) for consumer electronics and home networking hardware manufacturers.BitTorrent DNA allows website developers to overlay their content delivery network (CDN) vendor with BitTorrent's P2P CDN, built on the company's widely used client software. One should be able to expect dramatic cost savings using P2P bandwidth relative to the cost of CDN bandwidth, however ISPs may view this as an unattractive application of their network capacity.The BitTorrent SDK (or what the company calls "BitTorrent Certified" program) offers compatibility between hardware, such as Network Attached Storage (NAS) solutions and other Internet-enabled devices, and the BitTorrent client.

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The Long Tail by Chris Anderson

Notes and sources for the book

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