Once upon a time a pirate was “a seafaring robber attacking other ships", a sword between his teeth and a skull and cross bones flying from the masthead, the scourge of honest travelers everywhere. Pirates are the stuff of myth, the hoarders of mysterious charts and buried treasures, Jamaica Rum, diamonds and pearls. Captains Kidd and Morgan stride across our imaginations and into our hearts, walking the deck, raising the flag and sacking ships all along the Spanish Main.

We live in less exotic times, and these days this overused and emotive term may still be applied to the old fashioned shirtless plunderers who operate off various war-torn coasts around the world, in the South China Sea or round the Horn of Africa, but might equally be applied to a lost teenager who downloads a low-quality ripoff of a piece of music from the Net, the music fan who hands around a home-recorded cassette, or the harassed parent who installs Microsoft Office on more than one machine so that the kids can do their homework.

The more recent definition of a pirate is “one who infringes another’s copyright or business rights or who broadcasts without authorization”, and is usually applied to the content and software industries. One doesn’t have to approve of illegal copying to realize that this definition covers a multitude of sins, some of which, paradoxically, work to the advantage of the owners of the copyright.

The most common myths attached to the notion of copyright piracy are that the music, film and software industry profits are being fatally compromised by P2P networks and MP3 downloads, that each unit distributed in this way results in an equivalent loss for the industries concerned, and that there is no gain for the copyright holders in the illicit distribution of their products. Piracy is not all it's cracked up to be.

Payola Cola
Any PR consultant, advertising hack, tabloid journalist or Paris Hilton will tell you that exposure is what sells a product. For instance, in the music industry, everything is predicated on the knowledge that airplay increases sales so everything is oriented towards getting more airplay. Copied tapes and downloaded MP3s have the same effect. They advertise the final product, and sell more factory-wrapped CDs. This is especially so in an age when radio play is increasingly confined to golden oldies and industry-designated playlists, and allegations are often made that chart entries are engineered in company boardrooms. (Even if they aren’t, you could be excused for assuming that they were, so much do the charts reflect the music industry’s pervasive obsession with short-life manufactured pop).

But many well-established artists gained their current status with minimum assistance from the record companies, by word of mouth and copied tapes. And it is doubtful if any music fan has not, at some time in their lives, copied, lent or borrowed cassette tapes to and from their friends and lovers, of music seldom heard on the radio, which has ultimately promoted the final product and increased the revenues of the companies concerned.

Music has traveled around the world like this for 30 years or more, often taped and played on cassette recorders made by Sony, the world’s second largest music company, reaching the radio only after creeping sales by word of mouth has made success inevitable.

The music industry has a uniquely exploitative relationship with the creators of its product, and permanently retains the ownership of the copyright of its artists’ products. The world of music is littered with the hard luck stories of musicians who sold millions, were spat out and and wound up with nothing.

Walk the plank
Courtney Love gives a succinct summary of the situation: “The system,” she says, “is set up so almost nobody gets paid.” Piracy, she contends, is “when the RIAA lobbies to change the bankruptcy law to make it more difficult for musicians to declare bankruptcy ... the music industry is a [US]$40 billion-a-year business. One third of that revenue comes from the US. The annual sales of cassettes, CDs and video are larger than the gross national product of 80 countries. Americans have more CD players, radios and VCRs than bathtubs.”

Despite this, many of “the artists who have generated billions of dollars for an industry die broke and uncared for”, though they are “the rightful owners, originators and performers of the original compositions. This is piracy.” However big an artist's advance, they are always left owing back more to the record company, for studio time, distribution, marketing expenses...

Love cites the modern examples of TLC and Toni Braxton, whose contracts left them bankrupt despite each generating worldwide sales of more than US$175 million.

The music industry is undoubtedly facing a crisis, but not one due to teenagers downloading MP3s from the Internet. Fashions change – the laws on music copyright were created in the ’30s and ’40s before the advent of cassette recorders and MP3s, but music no longer defines the zeitgeist as it did during the ’50s, ’60s and ’70s, and the quality of MP3s is just not that good that it threatens the quantity of music sold. (Better to use Ogg Vorbis anyway, because there is no patent involved, the quality tends to be higher, and the algorithm is more efficient).

Closing down Napster, overpricing CDs, gagging the consumer with prohibitionist laws, DMCA, EUCD, DRM, will not restore the fortunes of the industry. Rethinking strategies in music policy and prevailing attitudes towards both artists and consumers just might make the difference. There aren’t many punters who will walk into a record shop and buy a shrinkwrapped CD by an artist that they have never heard of before, so how else does word get around?

One artist who concurs with this view is Janis Ian. Her first hit, Society’s Child, was a “controversial saga of interracial love”, recorded in 1966 when she was just 15. She had a succession of hits through to the early ’80s when she took a ten-year sabbatical from the record industry.

In two articles for Performing Songwriter magazine, ‘The Internet Debacle’, (published in May 2002), and Fallout (August 2002), Ian took issue with the record industry, which she maintains “is no different from any other huge corporation, be it Mobil Oil or the Catholic church. When faced with a new technology or a new product that will revolutionise their business, their response is predictable:

a. Destroy it. And if they cannot,

b. Control it. And if they cannot,

c. Control the consumer who wishes to use it, and the legislators and laws that are supposed to protect that consumer.”

She also notes that “every time we make a few songs available on my website, sales of all the CDs go up. A lot.”

The music industry is not alone in in its distrust of its own consumers. Back in 1982, Jack Valenti, the president of the Motion Picture Association of America (MPAA), told a congressional committee that “the VCR is to the American film producer and the American public as the Boston strangler is to the woman home alone”. The case under review was against Sony, who manufactured the VCR, and under another guise, is one of the handful of large music companies that control the record industry.

Meanwhile, the film industry has become more profitable than ever, and VCRs account for even greater profits than the film industry’s more traditional outlets.

The firm smack of the law
What works for music works just as well for software. There are different gradations of piracy. The manufacturers of Eastern Europe and South East Asia who mass produce identikit copies of both product and packaging in total imitation of the original, may actually be a threat, although the reduced prices at which these are sold may actually have the effect of increasing the market, rather than reducing it. There are plenty of studies by economists that argue that wide dispersal of pirated copies of software has the effect of promoting the pirated product and, paradoxically, increasing sales. Once a product becomes ubiquitous in one area of the market, sales will increase in other areas.

This fact has been accorded tacit recognition by some suppliers, notably Microsoft in China, where the company has turned a covenient blind eye to rampant ‘piracy’ to make agreements with the Chinese government in the interests of growing the market. The effect is to say: "Steal all the software you want, so long as it’s ours”, while putting pressure on China through the World Trade Organisation to adopt western-style copyright legislation. The potential software market in China is huge. Ubiquity, whether achieved by marketing or the result of pervasive copying, will increase Microsoft’s future market share and eventual earnings, especially as political pressure forces the Chinese into conforming with even the more dubious precepts of western "intellectual property" law. In this circumstance, it has been argued, it sometimes pays to turn a blind eye.

Bill Gates gave the game away, when sharing a platform with the world's second richest man, Warren Buffet, at the University of Washington as far back as 1998. "Although about 3 million computers get sold every year in China, people don't pay for the software," he said. "Someday they will, though. As long as they are going to steal it, we want them to steal ours. They'll get sort of addicted, and then we'll somehow figure out how to collect sometime in the next decade." Or as Scott McNealy, the once and future king of Sun Microsystems, liked to point out, "the first hit of heroin is always free."

And from this logic has followed the concept of Digital Rights Management, which has one objective, to prevent the computer user from using a computer as it can be used, from listening to music or reading texts that have not been approved by a third party. "They're hooked. Now, Let's keep them hooked."

The plunder
And in case China be seen as a special case, it is worth remembering that the US, now the great enforcer of ‘intellectual property rights’, was late to the table itself. Benjamin Franklin made his early fortune republishing cheap pirated editions of novels by British authors, and both Dickens and Wordsworth fought long campaigns against liberal US copyright laws which allowed American publishers to reprint British titles while providing little or no renumeration for the original authors – a fact that Charles Dickens credited with hastening the early death of Sir Walter Scott through overwork to pay his debts. The US didn’t conform to international copyright laws until the 1890s.

When Microsoft purchased Internet Explorer (IE) from Spyglass, Netscape dominated the browser market. Microsoft, having endless cash reserves, solved the problem the easy way, by giving the browser away free, forcing OEMs to package IE with Windows, and by ‘integrating’ the browser into the OS. Giving IE away free cut Netscape’s revenue stream, and ensured a browser monopoly for Microsoft that conveniently killed off Netscape as an innovative competitor.

Whatever the rights and wrongs, the ubiquity of "pirated" products on home desktops benefits the companies concerned. A student graphics designer, secretary or manager, may learn his or her craft on illicitly copied or pirated software – how else could you afford it? – but takes the acquired skill and familiarity with a particular product into the business market place, which stimulates sales. This has happened with a number of popular packages that have displaced nominal market leaders - How else did Microsoft Office steal the desktop from WordPerfect, which was the far better product at the time?

A continuing presence on the home desktop ensures a work force that expects to see the same product at work. There is a marketing strategy which advocates this kind of behaviour (if not by means of piracy), by providing a ‘loss leader’ at less than the cost price to stimulate the market, as Microsoft illustrated with the Internet Explorer giveaway. Increased availability of a pirated product stimulates sales of that product, and not the other way round.

Jolly Roger
There are rational solutions to the ‘problem’ of home copying of software. One is a more liberal understanding in law of what is meant by ‘fair use’. Another is a proper pricing strategy that differentiates between home and business users, and allows a point of entry for those that cannot afford to get there otherwise. This is the serious approach to solving the problem. Unfortunately, like the record and film industries, the software industry tends towards the view that the best solution is to criminalise and punish the consumers through DRM or other means, rather than to come to a better understanding of the relationship between the product and the market place.

The best solution is in the hands of the consumer. Free software imposes few restrictions on the user – you can give a copy to a friend without growing a beard or becoming a pirate...

Richard Hillesley