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Sounding Off: Results Of Software Piracy

Mark Wherry By Mark Wherry
Published March 2003

Music software companies have warned us about the effects of piracy since the dawn of history; but are we now starting to see the results as smaller companies become absorbed into larger corporations?

The recent buyout of Steinberg by Pinnacle prompted some heated discussion, and one of the most direct comments came from industry guru Craig Anderton, who made the following post to an online forum: "I think if every cracked copy of Cubase had been paid for, Steinberg would be buying Pinnacle. Users have been warned for years that piracy was going to diminish choices and reduce the ability of companies to introduce new products. Now it's happening."

Of course, it seems in our digital age that nobody ever likes to take responsibility for piracy, and people start pointing that most popular of human fingers, the finger of blame. The most common response to the issue of piracy by users is that software companies are at fault and could solve the problem by adding incentive for people to buy the legitimate product. This is one of those plausible-sounding comments that everyone nods wisely at, allowing them to feel more comfortable about the whole situation; but that doesn't make it true.

Mark Wherry as a child with guitar.I'm not saying that adding incentive wouldn't help, but the first two suggestions always made are: supply a printed manual and improve customer support. While printed manuals are nice things to behold, for sure, would the inclusion of what is essentially a book really encourage people to part with several hundreds of pounds? Of course not. There's a good reason why there are so many books published on the subject of Cubase, for example — and it isn't to cater for all those legitimate users who find the PDF manuals inadequate.

Maybe you think that comment is grossly unfair: 'people buy third-party books because the manuals are so poor!' And, of course, this is true as well, which is why I find it ironic that people suggest that manufacturers supply printed manuals, only to go on and complain that the printed manual isn't actually very good, before looking for a third-party book to help them on Amazon anyway. So much for the added incentive of a printed manual.

But let's consider the second point: customer service. In order to improve this, a company needs a large amount of resources that cost a great deal of money; and consider, if you will, the last time you rang technical support for a software product. Did you have to give a serial number or provide some other proof of purchase? Probably not, and unless companies are extremely diligent, they will (and do) get flooded with calls from people who haven't even contributed towards the cost of this support service, meaning that legitimate users are kept on hold that bit longer.

Another pointless argument made in mitigation of piracy is that it hasn't stopped Microsoft from being so successful; but again, there's a very good reason why this is at least partly true. Although there are many illegal copies of Windows floating about, one of Microsoft's most profitable divisions is still Windows, and I'm sure the fact that almost every new computer contains a copy of Windows, which has to be paid for in some way, doesn't harm this revenue stream. However, despite Windows' profitability, it didn't stop Microsoft including serious copy protection measures for the first time in Windows XP to stop people installing the same copy on multiple computers. Despite Bill Gates once claiming that if people copy software, he wanted it to be his software they copied, Microsoft, like every other software company, are clearly being seriously affected by piracy.

However, there's another angle to this issue, which says that piracy helps to build inertia for a product, since not everyone who copies something would go out and make a legal purchase anyway. This is undeniably true, and I remember one plug-in developer commenting that they were dropping copy protection over their entire range since it didn't affect their sales too seriously when they removed it from one of their products. I've also heard of companies using this phenomenon to their advantage by not protecting a product in the hope it will become more widespread than the competition. It's even been alleged that some companies have encouraged the piracy of third-party 'add ons' to boost the sales of their core system.

But it's no good building a user base for a product if the company responsible can't make enough money to survive. When asked about this very issue during an interview in SOS January 1995, Steinberg co-founder Charlie Steinberg said: "It was a real problem actually... when you're a small company it's very dangerous." So I think we're fast reaching a point of no return: software companies are putting hardware companies out of business; but at the same time, these companies are unable to make any money themselves. Clearly this can't continue, especially in niche markets such as music technology.

If you have any pirate software on your computer that you use on a regular basis, you're contributing to the problem, although I'm not naïve enough to think prosaic soap-box rants on a back page are going to get people up in the middle of the night wiping their hard drives because they can't sleep. The current software business model no longer works, and until a new model emerges that both encourages users to purchase legitimate software and makes money for the developers, it's hard to see how the situation can change. But that's a subject for another day. Sleep well.

About The Author

After a brief entanglement with the guitar at an early age, Mark realised that the piano was a far better prospect.

Published March 2003