The Piracy Dossier

THE PIRACY DOSSIER

FEW SUBJECTS in this business have aroused as much controversy as that of illegal software copying, or tape piracy as it is more popularly known. Software houses actively engaged in trying to stamp it out would prefer it to be known as software theft, believing that the word ‘piracy’ has romantic overtones making tape thieves feel more like Robin Hoods. Various estimates have been made as to the financial loss to the industry caused by commercial and home copying — some as high as £100m a year.

The response to our questionnaire in issue 8 (September) has been surprisingly high considering that we were asking people to display their dishonesty in public as it were! The results are interesting, perhaps even alarming, and will certainly serve to reinforce everyone’s prejudices depending on which side of the fence you happen to sit.

Before we dive into the results, here are two letters which we feel neatly state the two most popular views held on the subject. The first is from Shahid Ahmad, a programmer who writes games for Software Projects. It is a letter in savage response to that from Paul Watts (which appeared in the CRASH forum September issue) who accused software houses of ripping people off with their prices. The second letter came attached to one of the questionnaire forms and is, naturally anonymous. It states, somewhat more sensibly than Paul Watts managed, the opposite side of Shahid’s argument.

[The original letter was not reproduced in the original CRASH 10 — it is, however, at the end of this page for completeness.]


Dear Sir,
Despite my initial anger, please read this letter thoroughly! Let me say first of all that, frankly, Paul Watts is so full of ****, he doesn’t know the first thing about the piracy situation and I would love to castrate him personally. Now that I have let off some steam, I shall justify my cynical attack on this scum.

Let me get straight first of all. I am a games designer and programmer working for Software Projects Ltd., and I have a couple of very good games under my belt, the most notable being the CBM64 version of Jet Set Willy.

Large software houses are not faceless organisations with money to burn, and they are not in the business for exploitation purposes. Yes, Software Projects are in the software field for the purpose of making money, but in the end it is you, the consumer, who decides upon how successful we become. If a game is of poor quality then a magazine such as yourselves will slag the program off, inevitably creating a loss of sales for that piece of software. In the end, no one is pointing a gun at people’s heads saying, ‘buy my software or face the consequences.’ THE CONSUMER PAYS HIS MONEY AND MAKES HIS CHOICE.

Now let me refer to Mr. Watts letter where he quite stupidly says, ‘The pirates take some of this profit away, but the only reason they can do this is because the consumer DOES NOT WISH TO PAY THE HIGH PRICES ASKED FOR GAMES.’

I mean, for God’s sake man, you are saying that the consumer is a common thief! Everything is expensive these days, but Mr. Watts, are you saying that you would go into a grocers and take the food that you need to eat, simply because the cost of living is so high? Would you steal because of this sick excuse of yours?

The case is simple. Software is expensive because of a variety of reasons. This expense does not give you the right to steal someone’s program.

I’m not a millionaire programmer. This statement is a myth. Eugene Evans would have been lucky, very lucky to earn £5,000 a year for his crummy games let alone the ludicrous quoted figure of £35,000. So if you steal a program, Mr. Watts, you are not robbing a faceless corporation — you are robbing ME. I do not make a fortune out of writing games — yes, the rewards are potentially enormous (my good friend Matthew Smith will testify to that!), but there is little room for success with such a fiercely competitive market.

Now, getting back to the manufacturing costs. Software Projects do not get £5.95 for each copy of Jet Set Willy sold. The retailer gets a massive 50% of this (sometimes more). This leaves SP with a paltry £2.98. Out of this figure goes 15% VAT leaving £2.53. Then goes my potential royalty of, let’s say, 35p which leaves £2.18. Now deduct the price of getting the cassette duplicated and having a 4-colour inlay made. This takes a further 60p chunk out of that figure, leaving £1.58. Now deduct the massive cost of an advertising campaign, rent, electricity, food, staff wages (which are not abnormally large, may I say), phone bills, rates, expenses, piracy, overheads etc. etc. etc.

It takes a lot of money to produce a cassette and keep a company running, and in the end SP make about as much profit on a tape as I do. Do you get the message Watts?

I have made a few points, all significant, and if I sound angry, it is because Paul Watts is simply out of his league. He is a complete amateur when it comes to this subject and he doesn’t know the first thing about software piracy or theft. Finally, I’d like to state that all these views and comments are from my point of view only, and do not necessarily represent the views of Software Projects Ltd.

I challenge Mr. Watts publicly to defend himself, but frankly, I think he may as well surrender now, as I have used barely any of my ammunition.

Yours faithfully, Shahid Ahmad, London NW1

 

Sir,
In the spirit of anonymity with which you questionnaire was framed I have decided to enclose this letter.

The law of copyright suffers from one defect: it is not against the moral code. Criminal law can divide its offences into two groups the moral and administrative. Moral laws are those against theft, violence etc. but, contrary to what might be thought, they are not obeyed because we respect the law but because they are morally wrong.

Consequently few people actually commit such offences. If they did the police could not cope. Administrative laws are those that help regulate the socio-economic structure of society or lead to it running smoothly. In this country it is illegal to drive on the right of the road. In France the opposite is illegal. This is not to say that either one or the other is wrong. They are in fact both right as their purpose is to ensure conformity, to make traffic run smoothly. In fact it does not matter which side of the road we drive on as long as it is the same. Copyright merely enforces conformity to a capitalist economy, in effect ensuring profits temporarily. Thus the software houses are foolish if they think that stiffer penalties are going to stop piracy. The public sector has long experience of enforcing administrative law. Since there is no moral compunction to obey two methods have been devised: one) make detection easier thereby increase the deterrent aspect of sentencing (e.g. breathalysers, spot checks etc.), and two) make the offence more difficult to commit (e.g. put bumps in the road to enforce speed limits). Therefore, software houses must develop effective anti-piracy devices such as encryption, dongles etc. and ensure detection through paying informants and the use of spies. If the latter strategy is to be effective then the methods of enforcement must be used against the home copier. The problem is that there would be a public outcry and this is a part of the law that record companies have always shrunk from enforcing. So realistically the only things that the software companies can do is use more sophisticated protection and attack the commercial pirates.

In favour of the software houses I would say that they have a bigger problem than the recording companies in that a copy (especially because of tape-copiers) is as good if not superior than the original and indeed can even be improved by copying to another media such as microdrive. Records, however, lose quality and, therefore, if I really want a record I will buy it rather than put up with an inferior taped copy. However, unlike a record, I must buy software sight unseen or go by reviewers’ comments.

This comparison with records also holds the key to another issue: the volume of piracy. The software houses produce figures such as ‘£100m a year lost through taping’, but is this true? As a professional compiler of statistics I think I have the right to question the soundness of such information. In my questionnaire I have indicated that about half the value of my collection is in pirates. I know that most of my friends have a greater proportion. The software houses presumably use the logic ‘take last year’s sales and multiply by X’. This is not good enough however. Out of my entire software library there are actually few programs I use. I would put the figure at about seven out of one hundred and ten, of the seven two are pirates. I have recently become much more selective in buying or copying programs. My rule is that if the program is one I’m not going to use I do not bother. Most of my copying is in point of fact little more than stamp collecting. If my only option was to buy a program I would probably buy very few more than now. I would probably swap much more. At the end of the day copying only reduces profits if it prevents sales. Commercial piracy operations undoubtedly do this. I doubt though that home taping does. If I could not copy from friends I would simply borrow. If a program was really good I would buy it (but this would be very rare). Also remember that a record can be played on any machine a program can only be run on one micro.

To conclude let me say that I believe commercial piracy to be wrong because it is done for gain and that it does present a problem to software houses. I doubt very much, though, that home copying does.

THE HACKER’S APPRENTICE

THE RESULTS

The following statistics have been collated from 300 questionnaire forms returned at the time of writing. More forms are still arriving at this time, but the significant percentages probably wouldn’t be affected very much.

1. Do you think home copying is harmful to the software business?
YES 52%
NO 39.84%
DON’T KNOW 8.2%

2. Is there a difference between home copying and commercial piracy?
YES 94.9%
NO 3.14%
DON’T KNOW 1.96%

3. If ‘yes’ to the above, do you think commercial piracy is more or less harmful than home copying?
MORE 92.28%
LESS 4.4%
ABOUT THE SAME 3.25%

4. Do you make copies because...
A) originals are beyond your resources — 46.44%
B) you resent paying the full price — 37.08%
C) you just enjoy making copies — 9.74%
A & B) 6.784%

5. Do you actually make illegal copies...
A LOT 48.25%
OCCASIONALLY 46.30%
NEVER 5.45%

6. How many originals do you own and how many illegal copies?
ORIGINALS 4,195
ILLEGAL COPIES 16,725

7. Do you produce copies...
A) strictly for you own use — 58.8%
B) to give to friends — 35.56%
C) to sell to others — 5.63%

8a. If you make copies, how many would you usually make from one original?
67.62% said 1 copy
15.5% said 2 copies
6.15% said 3 copies
2.8% said 4 copies
5.33% said 5 copies
2.46% said 6 copies or more

8b. How do you produce your copies?
A) Tape to tape — 27.69%
B) Tape copier — 31.6%
C) Break and resave — 8.47%
A & B) 23.13%
A & C) 9.12%

9. What is the total value of your collection (including illegal copies)?
Total collated value — £121,194

10. And what portion of the value is in illegal copies?
Total collated value — £96,436

11. Where do you get your copies from?
A) Home — 16.86%
B) school — 30%
C) computer club — 6.29%
D) friend’s house — 45.43%
E) office/lending library — 1.14%

12. Would you still copy games if they were much cheaper?
YES 41.8%
NO 45.12%
POSSIBLY 13%

ANALYSIS

It’s interesting to note that slightly over half believe that home copying is harmful to the software business in general (Q1), and yet a substantial 45% would still copy games even if they were cheaper. A significant number of returned forms added a note to this question along the lines that the more protection given a game, the harder they would try to break in and copy it! These two statistics taken together with the figure (still very high) who obviously believe that home copying is not harmful, reflects the widely held belief that even if no one copied games illegally, the sales figures would not rise substantially. In other words, people are already buying as much software as they are ever likely to. It’s a moot point.

Commercial pirates (Q2) are seen as overwhelmingly harmful. Revolving around this thorny problem is the evident fact that whereas home copying IS seen in an ‘innocent’ light (only 5.6% actually sell any copies) commercial pirates are in the illegal business for financial gain at others’ expense. A rather odd sense of honour perhaps?

The age old argument of software cost is central to many on the questions asked and a huge 90% (Q4) said that software is either beyond their resources or that they resent paying the full price. Almost everyone admitted to making copies although well over half do for their own use only. The much maligned computer club only accounts for a surprisingly small percentage of obtained copies — schools, however, are the worst offending institution.

Perhaps the most alarming statistics are those for the value of collections. The 300 collated forms came to represent a staggering total of over £121,000 market value with over £96,000 of it being in illegal copies. The first figure checks out well against the total number of units claimed by the respondents — 20,920 multiplied by an average price of £6 equals £125,520 value. Looking at both sets of figures it is easy to see that only one quarter of copies owned are shop bought ones. If we extrapolate the figures of our 300 collated forms 30,000 people (a hit game may expect to sell this many originals) it would reflect a total owned value of £12 million, £9½ of which would be illegal! The averages show an ownership level of 14 originals and 55 illegals per person.

An important thing to bear in mind is that the 300 collated forms only represent a small fraction of the CRASH readership and it would be a mistake to assume that all our readers, indeed all Spectrum owners, are illegally copying games at the rates suggested by these results. A natural inaccuracy is apparent in the fact that the questionnaire prompted copiers to reply, and significantly NO forms were returned by readers saying that they did not ever make copies. There must be many such!


Paul Watts’ original letter from the CRASH 8 FORUM, along with Lloyd Mangram’s response:

Dear Sir,
I find it slightly ridiculous that you are showing such sentiment to software houses. They went into business to make a profit, not to produce great games out of the goodness of their hearts. The pirates take some of this profit away, but the only reason they can do this is because the consumer does not wish to pay the high prices asked for games. Yes, Spectrum software is the cheapest around but still, at £5 upwards, the average child is not going to think twice before he or she tapes a friend’s game.

The pirate exists because the price has been forced too high for the consumer to be prepared to buy. The only way, therefore, to get rid of the pirate is to cut the price or offer incentives (like prizes) which the pirates’ games will not qualify for.

The software houses must realise that they have this competition rather than bleating to the press. I am quite sure that if the pirating were impossible the average price of Spectrum software would actually rise.

How can anyone blame the consumer for thinking prices are too high when they see Imagine’s directors riding about on custom-built motorbikes and games having giant ad campaigns lavished on them?

So it is time to stop feeling sorry for the poor little software house, they are running a business and, believe me, they wouldn’t hesitate to exploit you if they could. The law of the jungle presides, the fittest, best games producers will survive. I hope you print this letter as I’m sure it will stir up a lot of controversy and it’s time the other side of this issue was seen.

Paul Watts, Ilfracombe, N. Devon.

We have had many letters on the subject of tape piracy, and, of course, some of them we have already printed. I think this is the strongest challenge to the software industry to defend themselves, though, and it would be nice to see some reaction from companies as well as readers on this one. Any takers?

Personally, I’m concerned with one thing only, the continued development of the home computer game. If you are using the word ‘pirates’ to describe the consumer who can’t afford tape prices, that’s one thing. But the rapid rise of commercial piracy is another matter. And one point I think that is valid is that the more ‘consumer’ piracy there is going on, the easier it is for commercial pirates to slip in their product, often complete with proper cassette covers etc. And believe you me, the real pirate IS OUT to exploit you and me. The law of the jungle, incidentally has never said that the fittest and best survive merely the strongest — in other words it is an amoral law and takes no account of real merit. Another point (which may not exactly show us in a good light, but what the hell we’re trying to be honest here!) is that pirates of any sort don’t advertise in magazines. The money received from actually selling CRASH to you, the reader, just covers the cost of producing and printing each issue. Then comes all the costs of staff salaries, office overheads, typesetting, running competitions and numerous other hidden expenses. All that has to come from advertising revenue — without it there could be no magazines at all these days — certainly not ones that people would want to read and we’re always presuming here that people do want useful informative magazines to read. However, enough said. Let’s see what everyone has to say to the letter and my points!

LM