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1 Piracy in the Digital Age Dana Dahlstrom, Nathan Farrington, Daniel Gobera, Ryan Roemer, Nabil Schear University of California, San Diego CSE 291 (D00) Ð History of Computing December 6, 2006 I. Introduction Copyright owners are at no loss for words and figures asserting the detrimental effects of unauthorized copying and distribution of software and digital media. The recording industry estimates present worldwide losses at $4.2 billion per year.1 The motion picture industry puts 2005 worldwide losses at $18.2 billion,2 and the software industry claims a $34 billion figure.3 Put together, the estimated losses from piracy in these three industries in 2005 exceed the approximately $50 billion in worldwide damages from all the spam sent that year.4 Even taken with the proverbial “grain of salt,” these estimates provide at least a crude indication of a large and growing phenomenon. The term “piracy,” as used in this paper, refers to the illegal copying and distribution of proprietary content such as software, music, or movies. Some unauthorized copies are “bootlegged,” copied for later resale at below-market prices. Other unauthorized copies are made and distributed by consumers who trade them without payment. In a break from traditional notions of piracy and counterfeiting, the “digital piracy” of primary concern today involves non-physical objects: digital files sold or exchanged over the Internet. Mode and motivation aside, the extent of piracy is most frequently measured in monetary terms: the revenues that might otherwise have resulted from the authorized sale of the goods that were illegally copied instead. One can question the assumptions underlying loss estimates: Would all “pirates” otherwise have purchased all the same goods at full price? At the same time, might not unauthorized copies sometimes expose people to content they decide to purchase, thereby actually producing sales? Despite the likely answers to these questions, the content industry primarily perceives “piracy” as a threat to their business models; undoubtedly others perceive great opportunity. Accordingly, the content industry has gone to great lengths technologically, politically, and legally to stem the tide of unauthorized copying and distribution facilitated by the Internet and other technological advances. This paper will explore the history of the primary forces driving digital piracy: improving technology that makes it faster, cheaper, and easier for more and more people to copy and distribute exact digital copies of proprietary content. Many of the modern day issues with piracy can be traced back to the early history of computing. The availability of widespread digital distribution and massive storage has inflated previously unimportant aspects of piracy into large controversial issues. Technological advances also allow improved content protection and digital rights management. However, most advances in content protection are met with technological “hacks” or “cracks” that create an escalating “arms race” scenario. As intellectual property owners seek stronger legal protection against piracy, new laws and legal doctrines similarly find that technology can even circumvent 1 RIAA, Anti-Piracy Issues, available at www.riaa.com/issues/piracy/default.asp (last visited Dec. 5, 2006). 2 MPAA, Who Piracy Hurts, available at www.mpaa.org/piracy_WhoPiracyHurts.asp (last visited Dec. 5, 2006). 3 Press Release, Piracy Rate Unchanged at 35%; Global Losses Increased by $1.6 Billion, BSA (May 23, 2006), available at www.bsa.org/EastMediterranean/press/newsreleases/eastmediterraneanpressrelease23may2006.cfm. 4 Gregg Keizer, Spam Costs Businesses Worldwide $50 Billion, INFORMATIONWEEK (Feb. 23, 2005), available at www.informationweek.com/story/showArticle.jhtml?articleID=60403016.
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