The Societal Costs of Digital Piracy

What’s the big deal about “piracy?” So I downloaded one song from a file-sharing site instead of paying for it.  The artist is a multi-millionaire; she doesn’t need my hard-earned cash. I can listen to the song free when it plays on the radio, why shouldn’t I listen to it free whenever I want? Or share it with my friends?

Movie tickets are expensive – besides, I can get a copy of lots of new movies before they even hit the theaters, so why shouldn’t I?

And don’t get me started on the amount software companies charge; they want people to pay hundreds of bucks! Why would I pay out when I can download it free and just pay a few bucks to get the authentication codes needed to circumvent the security measures?

Piracy is a crime. Unfortunately, lots of youth and adults think sharing software, games, music, ebooks, pictures, etc. is just a convenient tool to help reduce costs. In fact, digital piracy is often portrayed as a victimless crime, but that portrayal is false.

Consider the costs:

  • A whopping $59 billion dollars’ worth of software was stolen worldwide in 2010 according to the Business Software Alliancei. In the US alone, 20% of all software installations in 2010 were pirated copies that cost the software industry $9.5 billion dollars.

  • A survey by the International Federation of the Phonographic Industry claims illegal downloads account for 95% of all music downloaded worldwide in 2010. In fact, the situation is so dire that the digital growth in music fell from 25% in 2008 to 12% in 2010 in spite of increasing anti-piracy legislation and low-cost services allowing consumers to download individual songs. Global sales in the music industry have fallen 30% over the past five years in spite of a 940% growth in digital.

  • John Kennedy, executive chairman of the IFPI, said: "It would be great to report these innovations have been rewarded by market growth, more investment in artists, more jobs. Sadly, that is not the case. Digital piracy remains a huge barrier to market growth."

  • The film industry does not appear to take much of a piracy hit on movies within the US, but the cost to the industry in loss of international sales is significant, though there are variations based on genre and on how long it takes to get the legitimate movie into theaters in various countries;  the longer the delay, the greater the financial loss to piracy.

Piracy negatively affects every single person working in these industries and their supply chains. There is less money to invest in new software, developing music artists, and movies. There is less work for developers, testers, sound engineers, videographers, actors, scriptwriters, musicians, assistants, set designers, security guards, stores, salespeople, website developers and every other type of person who goes into creating, packaging, advertising, distributing, supporting, promoting or reviewing these products and services.

Most of the people who lost work because of piracy and stolen profits will struggle for the means to support their families. The loss of income means they aren’t going out to eat and shop to help keep their local community’s economy healthier.  This loss of income may shut the door on the restaurants and stores they once visited in your hometown. Since they can no longer afford home remodeling, new plumbing, repaving or new furniture, these businesses will also suffer along with everyone who works in the housing industry. The loss of income may force families into foreclosure, dropping the value of all homes in the area, including yours. And the loss of income may mean these families cannot afford to send their kids to college and create a brighter future for themselves and the country.

When you download illegal content or share copyrighted content with others, you do not see your victims, but digital piracy steals the income from millions of hardworking people.

Piracy is theft

There are very clear laws about what people can and cannot do with purchased content. Generally, purchasing content means you are allowed to listen, play, read, or use that content yourself. It does not give you the right to copy it, share it, trade it, let others download it or make money off of it for yourself, like buying a movie and then charging people to come see it.

Copying software or digital content without permission of the content creator is stealing. It is no different than shoplifting the same program from a computer store. It doesn’t matter whether you copied copyrighted material from a friend, illegally downloaded from the internet, or purchased from a person who was selling illegally made copies; it is all theft.

People who copy digital content they do not have permission to use are digital pirates. This includes:

  • Copying digital content a friend has bought - like music, pictures, videos, movies, games, books or software.

  • Copying digital content from peer-to-peer networks or file sharing servers.

  • Buying content from a source that stole the content and made copies to sell – like counterfeit versions of games, movies, music, books, or software – is buying stolen goods.

Pirated content carries a significant risk of malware – and all the problems it brings

Asked what advice he would give to people who may be tempted by getting content without having to pay for it, Security software company ESET’s IT security and cybercrime analyst Urban Schrott said, “Don't download illegal stuff. It's not given to you for free by someone nice because they like you and want to give you something for free, but by someone with a malicious intent, because they want to make money for themselves using the free stuff as bait.”

“The majority of cracked software comes as a package of some sorts and the malware can be part of the de-packer, the cracked .exe itself or as some process within the program. Also, many ‘free software’ websites themselves are hosted by shady companies and will try to infect you with drive-by malware anywhere in the process of finding and downloading the cracked software from their sitei.”

This advice is echoed by the highly respected security blogger Brian Krebs who wrote, “I hope it’s clear from reading this post that downloading pirated software and software cracks are among the fastest and likeliest ways to infect your computer with something that ultimately hands control of your PC to someone else…It is almost never safe to download executable programs from peer-to-peer file sharing networks because they are a major source of malware infections.”

That free software, song or movie may also steal your identity, corrupt your computer, capture your financial records and passwords, turn your computer into a bot on a criminal botnet, and threaten your safety and the safety of your family.

How to spot, avoid and report pirated content

Pirated content and the websites that sell or share it can look entirely legitimate, but a few simple “tests” will help you spot the fakes, avoid the seller’s scams, and dodge the malware.

To help you identify pirated software, the Business Software Alliance recommends the following tests:
  1. Trust your instincts. Check the online seller’s price against the estimated retail value of the software. If a price seems “too good to be true,” it probably is.

  2. Make sure it’s authentic. Be suspicious of software products that do not include proof of authenticity such as original disks, manuals, licensing, services policies, and warranties.

  3. Beware of backups. Avoid sellers offering to make backup copies. This is a clear indication the software is illegal.

  4. Steer clear of compilations. Be wary of compilations of software titles from different publishers on a single disk or CD.

  5. Get seller’s contact information. If you cannot contact the seller after making a purchase, you may have no recourse if the product turns out to be pirated. Make certain to get the seller’s address, if possible.

  6. Keep Receipts. Printout a copy of your order number and sales confirmation and file them for your records. This information will help build your case if it is pirated and further action is needed.

  7. Ensure secure payment. Make certain that the internet connections you are using are secure.

  8. Understand transaction terms. Get a clear understanding of the merchant’s policies concerning returns and refunds, shipping costs, and security and privacy protection before you complete the transaction. Most importantly, look for a trust mark from a reputable organization to make sure the online retailer is reliable and has a proven track record of satisfying customers.

  9. Do your homework. Before making a purchase, do as much research on the seller and vendor as you can. Check the seller’s rating or feedback comments when on an auction site. Some of the most frequently sold titles on auction sites include products by Adobe, Autodesk, Corel, Intuit, McAfee, Microsoft, and Symantec.

  10. Ask the experts. Contact the BSA with any concerns or questions by calling 1-888-NOPIRACY or visiting our Web site

To spot and avoid pirated music, videos or films, answer the following questions:

  1. Is the content being sold other places, but offered free to download? If yes, it’s pirated.

  2. Is the seller a known, reputable company with good reviews and a positive Better Business Bureau rating? If yes, the content is probably not pirated.

  3. If you’re purchasing a DVD or CD, does the packaging look professional with all the seals, holograms, etc. in place? If not, it is definitely pirated.

  4. Is there a mix of music, movies or videos from more than one artist? If yes, the chances of it being pirated are high.

When in doubt, find a different source for the content that you know is legitimate. Stealing content online is easy, but that doesn’t stop it from being wrong – and illegal.


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