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‘The 2007 Digital Music Survey’ by Entertainment Media Research, which was conducted
in association with leading law firm Olswang, reports that worldwide piracy is on the rise.
Do IT experts agree? If so, does this mean security experts are fighting a losing battle?
Or is there a way out?
We brought in Dr Prem Chand, vice president, E Security Services, Tech Mahindra; Rajesh
Mani, practice head - Media & Entertainment DRM, Tech Mahindra; Nikhil Donde, principal
consultant, PricewaterhouseCoopers; Deepak Prasad, general manager, SafeNet India; and
Aravind T S, software engineer, Infosys, to discuss this seemingly ‘forever hot’ issue, and found
that they all agreed that piracy is on the rise.
That privacy continues to prevail—nay, grow!—is not really surprising. As Donde points out, the
Internet, although a technological boon, has simultaneously proved to be a bane, insofar as the
proliferation and transfer of pirated content has been made very easy by way of downloads, and
transmission across peer-to-peer networks, often traversing borders. Separately, barriers to the
movement of pirated media have faded away as travel restrictions are lifted to encourage global
travel, implying that master copies move easily from one country to another.
In fact, Prasad goes so far as to opine, “Piracy will worsen, as the exchange of information will
become easier with further progress in technology. Better broadband speeds,” he says, “will
allow the transfer of 500 MB of software or content in minutes.” Aravind too, predicts the worst,
“The development of more software products translates into more piracy.” Undoubtedly, we
would all like to avail of a still greater range of digital wares and content, but at what cost?
Too little of the right thing
Shockingly, this gloomy scenario prevails despite the millions of dollars being spent by
companies around the world to devise better ways to protect digital products. These outlays
have even spawned a lucrative anti-piracy specialist segment that draws some of the best
minds of the IT industry. Imagine—Internet sources reveal that every month, Universal Music
ostensibly spends US$ 4000 to protect a single album, and US$ 2000 to protect a single track.
But, sadly, even such generous budgets have only managed to partially solve the problem.
Piracy has still not been rooted out.
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But why?
Is it a case of misplaced objectives? Or are companies doing too little of the right thing? Mani
explains how the typical anti-piracy ‘job’ “is outsourced to specialist companies known as media
defender services, who trawl the Web to determine, and then jam sites from where songs are
being downloaded. Other digital protection technologies like encryption, watermarking and
finger-printing solutions are also being applied, but more with the aim of determining areas
where content is misused, and to determine the point of leakage, than as investigative and
preventive mechanisms.”
Apparently then, current solutions are limited to one part of the piracy problem. For
instance—consider that some music companies track the online purchases of music with the
help of information included in the media content headers. These help determine say, if I’ve
inappropriately shared music I’ve bought. But companies are still using such information only to
suppress piracy—or as Donde says, “…to stifle the exchange process within the hacker
community”—and take no direct legal action on offenders.
Borderless pirates
Could one reason for this supposed lack of follow-up action, as it were, be that offenders are
situated across the world, and hence legal action would be both an expensive and confusing
proposition? After all, as Aravind points out, “Piracy is a universal issue, even though volumes
may differ from region to region, depending on how strict the local laws are.”
On the other hand, Dr Chand rues, “Piracy is definitely a universal issue, as prevalent in the US
markets as in India. Check out any railway platform. You will see a plethora of pirated tech
products being sold! Get to any torrent or P2P sites, where you get a varied list of content
posted from different parts of the world.”
These insights highlight the fact that pirates and piracy are everywhere. Even so, legal action is
easier in countries where anti-piracy laws have evolved, and hence are swifter to implement. In
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this regard, Prasad practically opines, “Though piracy is largely a universal issue, it is more
rampant in developing economies where economically, software (and other digital content) is
perceived as an unnecessary expense, specially where the price of the product is high.”
Are pirates born or made?
Prasad’s statement brings into focus a vital question—is piracy driven by careless, disrespectful
attitudes, or is it a result of economic compulsions?
Donde feels that piracy has not reduced because awareness has not increased the way it
should have. At the same time, he segregates those patronising pirated products into three sets
of people, in terms of their different attitudes towards piracy. “One set,” he says, “is genuinely
unaware of the problem and its illegal nature, and hence uses pirated CDs—containing software
or entertainment content. Another set consists of people who are aware of the piracy menace,
yet who nevertheless get taken in. Consider a manufacturer who uses software that is partially
built on pirated code as exemplifying this category. The last set of people includes those who
resort to piracy because they have no choice—say an SME that would like to use genuine
software but cannot afford it. So the third set faces a practical obstacle to conducting business.
Even though I agree it can opt for open source software, sometimes business persons are not
of a technical background, or they perceive software or IT as a mere support function to their
core business; so they don’t spend too much time or energy on this problem.”
Apparently, some users’ attitude is an outcome of their economic compulsions. In fact, so long
as price is a criteria driving or preventing piracy, the attitude of digital content creators and
owners is also part of this ‘issue’.
Content owners, it could be said, must get real when it comes to pricing, and change their
attitude too. For instance, a track that costs 1 USD cannot be priced at Rs 40 in India—that
simply would not work. Pricing must be in consonance with the local market. For example, Tata
Indicom is distributing tracks for Rs 6 to 7 to its broadband customers—this works well in India.
As Mani puts it, “The idea is to make the content so affordable that people would rather buy it
than pirate it.” Otherwise, even people who realise that piracy is wrong think twice about buying
original content, and sometimes also veer towards piracy.
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Innovation should be aimed at reducing prices
One could reason that if digital content owners would only siphon some of their spending on
anti-piracy-ware into the technical development of cheaper products, the prices of software and
content would drop as a result of technical evolution. According to Aravind, “The creation of
products affordable to all would be the best solution.” He elucidates, “At present, way too many
people want software for free and, in contrast, companies are not ready to cut down prices.
Interestingly, both end up as losers. Those involved in piracy, either by pirating products or by
using pirated products, sacrifice the security of their PCs, leaving them vulnerable to worms,
viruses and other infections. On the other hand, companies are spending more time and money
to protect their products from pirates. It would be better if they had spent the same money and
time in making the product cheaper, and truly indispensable. A change in attitude has to be
brought about, for sure, but it should be driven by the cost-effectiveness of products. This is
also true in the case of emerging countries, where the US$-to-local currency ratio is high. I am
not sure if there is a final solution to this problem, since educated people also indulge in it.
However, its magnitude can be reduced by lowering costs.”
That educated people also indulge in piracy comes as no surprise—we may all have used some
form of pirated product at some point in our lives. But do educated users have any genuine
cause for complaint against the sellers of content, which drives them to accept piracy?
Digital ‘rights’ or digital ‘restrictions’?
Insofar as piracy is a function of attitude, Mani opines, “I would like to point out that users today
perceive digital rights technology or management more as digital restriction technology or
management. The technology that drives anti-piracy measures is still evolving, and as long as it
remains in a state of flux, the users lose out by not truly availing of the digital rights they have
purchased.”
For instance, if you buy music content, you would expect to be able to use it across all the
players you own—perhaps a portable music player, laptop, a desktop, etc. As long as users are
prevented from doing this because of certain technology restrictions (music playable on an iPod
is not transferable) they tend to be less supportive of anti-piracy initiatives. They feel—‘I have
been restricted from exercising my right, so why not resort to piracy now and then.’
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Donde also explains how “…branding has created a demand for products across countries.
When users desire a product, and it is either not locally available, or available at a price that is
unaffordable, they resort to procuring its pirated version. So pricing is another major factor that
needs to be addressed by content owners.”
Combat piracy via innovating licensing methods
So—we travel a full circle and come back to pricing! Even as he agrees that piracy is definitely a
question of attitude, Prasad affirms that price is a barrier in curbing piracy. “Price,” he says,
“could be reduced, with innovative licensing models to control the menace of piracy. Software
and content development organisations should come up with innovative licensing models.
These low price models, very near the cost of pirated products, will help push the adoption of
licensed products by customers. Good licensing models, the option to pay per use, ‘n’ tier
models, subscription and availability on mobile devices will all prove useful. The adoption of
stronger protection technology, coupled with the use of protection technology in licensing, such
as providing software or content for consumption at 10 per cent of the cost for a limited time
period, will ensure a win-win situation for both developers and customers.”
Regarding tech innovations, Donde seconds the need for a proper licensing mechanism for
solutions, as this will help change user attitudes. He cites the example of Microsoft coming up
with a digital rights management solution, which was countered by a similar open source
product by the Open Mobile Alliance. What this practically does is to create choice for users.
“Buy me—I’m licensed to support you”!
Eventually, such competition will drive prices further down, to the extent where users will no
longer, in Prasad’s words, “…consider it worthwhile to own a pirated version. These low prices,
coupled with a changing attitude towards piracy, whereby more users are keen to own authentic
licensed versions of products rather than compromise on future support, upgrades, etc, is what
will finally change the scenario.”
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Aravind believes that customers may be encouraged to use genuine products by showing them
how much they stand to lose in terms of product support and updates. He explains why cutting
prices should never be an issue, as “…companies can still have back-end sales, charge for
updates and support, and think up other novel ways to monetise their products. They should
note that most of Google’s online services are free of cost. Here, perhaps, is a lesson for other
companies—‘qualified customers are worth more than what you think’.”
Any solution will work—provided it is installed in time!
Speaking of lessons, companies must also take timely steps to ensure they are not caught off
guard. Donde elucidates, “Digital rights management has its own place, as it helps meet key
security objectives. Simultaneously, there are other measures intended to keep documents
safe, code secure, and digital media protected. There is room for many specific solutions, and
these are all useful, but sometimes people wake up only after they have suffered a loss to
piracy. It is essential to bring in experts to assess the risk a company faces, not just once, but
continuously at regular intervals. Sometimes, a company takes things lightly and gets caught at
its weakest moment. Companies can only stay ahead of ‘pirates’ if they are actively involved in
protecting their content.”
Innovate at both software and hardware levels
Simultaneously, technologists must focus on innovations both at the software and hardware
levels. Hardware level protection is by now well known. For instance, companies have devised a
secure music path concept, whereby digital music files are protected by virtue of analogue
(player) sound cards. If people try to record a song playing via an analogue source, they will not
be able to make a ‘digital’ quality recording. Other innovations happening at the hardware level
are by Microsoft in Vista; they had earlier come up with the Secure Audio Path technology in XP
and ME.
New formats like DTH (Direct To Home) TV involve the use of set-top boxes incorporating both
software and hardware to counter piracy. If these boxes are opened, a key that was burnt into
the hardware gets erased and the set-top box is rendered useless. Mani says, “This kind of
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software-hardware combo protective solution will succeed in limiting the access to a service or
product—to those who possess hardware—as well as limit the range of services availed of—by
coding the hardware according to rights paid for. Basically, companies must realise that
consumers must retain the rights they pay for.”
Aravind also favours a combination of both kinds of protection. “While hardware-level protection
makes the product machine-dependent, protection at the software level could be relatively
easier to crack. Both have their own set of pros and cons, and striking a balance may only be a
matter of time,” he says.
A multi-pronged effort
A balance could well be the way out—as Prasad explains that both hardware and software
protection will co-exist due to the benefits each has to offer in varying scenarios. But holistic
technological evolution must be matched by a renewed focus on awareness, to result in a
permanent attitudinal change—among common people and in legislation. Donde cites the
“…efforts of governments of Third World countries to enforce policies to ensure they use
authorised software across departments. They are also waking up to the possibility of using
open source licences. India is at the forefront of this awareness drive towards compliance, and
is taking many steps in the right direction. People addressing the piracy problem must be very
clear about where there is the most non-compliance. Advisory bodies could help launch ad
campaigns, and suggest policy level changes such as the now reasonably comprehensive
Indian IT Act,” he says.
At the end of the day, Dr Chand observes, “A mix of tech innovation and a change in attitudes,
both at the user and corporate level, is what could solve piracy across the world. If technology is
implemented in a user-friendly way, it is only a matter of time before piracy is eradicated.” Fair
enough—at least we have something to look forward to!
The Voice of the People
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In spite of all the rhetoric about containing (never mind eradicating) piracy, pirates and
their wares abound. Why? Are the technological innovations coming out of small and
large IT stables not useful, or lacking in genuine deterrents? Or are the masses just
adamant about supporting piracy, for whatever reasons? On behalf of ‘i.t.’, Charu Bahri
spoke to a few well-placed experts and consultants for their opinion on what would be
the best approach to abolish piracy.
Is the piracy menace getting better or worse, and why?
“Most of China runs on pirated software, and there is little that the affected companies can do
about it. Even Internet operating systems used in networking gear by companies like Cisco
seem to have been pirated by Chinese companies providing similar equipment at a fraction of
the cost. At the same time, software like Windows has evolved to make piracy difficult, if not
impossible. Overall, piracy as an issue is moving to a different zone, with control and action
shifting from regulatory machinery to the market participants themselves.”
– Sanjay Negi
“Yes! It is getting worse, with disruptive and storage technologies becoming cheaper and new
technologies arriving on the scene. A few examples…
- People can send content, images and software easily on Bluetooth, IR (Infrared), Wi-Fi or
Zigbee without realising the copyright violation.
- Technologies like DRM (Digital Rights Management) are creating more opportunities for
hackers and underground sites, which increase traffic to their sites by hosting cracks, patches
for breaking DRM codes.
- New technologies like wireless-USB (Universal Serial Bus)/UWB (ultra-wide band) and
WiMAX will allow people to transmit gigabits of audio, video and other information in a jiffy to an
innocent and honest user.
- Falling prices of storage technologies—SD (Secure Digital), MicroSD, etc allow people to
store, carry and transmit large amounts of data and trade information.”
– Gurudev Goud
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“I would like to point out that software piracy has always been one of the foundations of India’s
IT success, especially amongst the small and medium enterprises. In fact, I am aware of
companies of even 500 employees or nodes in the late nineties who maintained a 10 per cent
licensing policy—for every 100 usage nodes, ten licences were the norm. Though there was at
least a single licence of every software in use, under-licensing has always been the norm. I am
sure that has changed for every company listed on NASDAQ, due to the appropriate
declarations required by US legislation. I still believe that the norm may have been increased for
other companies, but we are still a long way from adopting the ‘full licensing’ paradigm.
From a financial perspective, I am personally sure that full licensing, if adopted by any small and
medium (less than Rs100 crores of turnover) technology enterprise will push its cost structures
beyond competitive sustenance. And, as such, will serve to maintain the hegemony of the large
and multinational software companies. If I want to buy twenty licences, I am likely to pay a price
that is more than ten times the price per licence paid by an MNC with 250 or 1000 licences. If
they will get the benefit of volume pricing, I, as an entrepreneur, am forced to take recourse to
piracy to remain competitive.
Software piracy is not only about the rights of the vendor but also about the compulsions of the
buyer.”
– Jayant Tewari
“The piracy menace is definitely getting worse. People are looking for pirated software, as it’s
cheaper, and sometimes free of cost. I would say piracy is changing the attitude of people
towards real products. Sometimes, piracy is introduced by ‘other’ parties to cause economic
breakdown. These may include competitors or other nations. Rules governing piracy are limited,
and are sometimes applicable only in certain jurisdictions.”
– Amit Kumar S Mahajan
What will eradicate piracy – a tech innovation or a change in attitude? Why?
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“Piracy as practised today may become irrelevant before it can be eradicated. With the move
towards Web applications like Google Docs, and even Microsoft following suit in a limited way,
much of the popular applications like word processing, spreadsheets and presentations would
be available over the Net, and the mass market for these products may shrink, if not disappear
altogether. Enterprise business applications and systems will of course continue to be licensed,
and these do not suffer from much piracy in any case.”
– Sanjay Negi
“There are initiatives being taken to eradicate piracy. Definitely, it does not need tech
innovations, as ‘pirates’ take up every tech innovation as a challenge and try to find solutions for
it. Attitude is the only thing that will eradicate piracy. But attitudes present a dilemma – people
making products should find a mid-way to kill piracy. For example, they can sell a low-quality
version of their product at the same rate as the pirated copy. This is what will change the
attitude of people, as they would prefer buying the original product instead of the pirated one.
We know that this is happening in the entertainment media, and it’s working, which is a positive
sign. The easy availability of products at moderate prices will definitely eradicate piracy.”
—Amit Kumar S Mahajan
“Piracy of all sorts is as old as humanity, and will be here to stay as long as humanity exists.
While we all know piracy cannot be eradicated, a change in attitude and business models will
address the issue of piracy to a huge extent. Technologies that try to address piracy directly will
only create more opportunities for pirates, and will actually aggravate the problem. Listed below
are a few examples of how a change in attitude and business models will address the problem
of piracy to a large extent:
- Loyalty programs by content/music firms with user groups and customers and other
innovative methods (like appointing hackers as a legal distributor).
- Incentives for not sharing copyrighted content (e.g., if an iPod can track that no content
was transferred through USB/IR or other means in one year, then you are entitled to an
iPhone).
- New laws that will allow copyright owners to own the copyright for a limited time period
(like pharma-molecules patents).
- Incentives to share content: e.g., an algorithm in a forthcoming music video by Shakira
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that will actually increase the Hi-Fi/HDTV (high-definition television) quality of the album or will
allow bigger discounts on another volume every time it is shared. So users, in the pursuit of
better quality, will actually share the information with multiple users and increase the record
sales in return.
- Technologies that help implement the above business models. For instance, KTwo has
created an Intellectual Property Protection System (IPPS) that allows firms to transmit and
share their IP freely, but the moment a customer of the firm starts using the IP to make money,
the IPPS system prompts or asks the user to register and pay for the extent the user wants to
earn money through the IP.”
– Gurudev Goud
The respondents
Name
Designation / Organisation
Dr Prem Chand
Vice president—E Security Services, Tech Mahindra
Rajesh Mani
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Practice head—Media & Entertainment DRM, Tech Mahindra
Nikhil Donde
Principal consultant, PricewaterhouseCoopers
Deepak Prasad
General manager, SafeNet India
Aravind T S
Software engineer, Infosys
Jayant Tewari
Independent outsourced CFO to small and medium technology companies,
http://OutSourcedCFO.GooglePages.Com
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Sanjay Negi
CEO, TBS: Technology for Business Solutions
Amit Kumar S Mahajan
Software engineer, Mastek Ltd.
Gurudev R Goud
Vice president—Business Development, KTwo Technology Solutions
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