Copy protection has existed since shortly after the first commercial computer programs were written. It ranges from simply asking for a serial number, to disallowing anyone to load software on their computer more than three times, or requiring them to validate the software online every ten days.
The problems with copy protection came to a head recently when, Will Wright’s, Spore was released. Many gamers felt the DRM(digital rights management) was excessive. As a form of protest, they gave it low ratings on Amazon, but the real story wasn’t a few bad reviews.
The game was on torrent sites a week before it was released in stores. At least 500,000 people downloaded the game the first week. If only ten percent of those people chose to download the game because of the excessive DRM that is a loss of 250,000 dollars the first week.
Even the loss of immediate income isn’t the most important part of the story. The important thing to understand is that the copy protection had no effect. The DRM was cracked before the game was released. This means that no one who was willing to get the game illegally off the internet was inconvenienced. Only those who paid for the game were forced to contend with the overzealous copy protection.
The music industry has been fighting the DRM battle for years, and while there is by no means a consensus it has slowly come to the understanding that you can’t create any copy protection which is truly going to be effective. In order to play the music the computer must be able to decipher the encryption. The same is true of software though it is more difficult to do. The most clear sign that they are beginning to learn that DRM only effects legal user is the availability of DRM free music for sale.
It is well past time the software industry consider a new plan as well. Making people enter serial numbers before they can use software has little effect except to annoy paying customers when they reinstall the software and can’t find the packaging, and helping to teach them how to pirate when they get the serial number off the internet.
It is possible to make guesses at how much money is lost do to illegal downloads though those numbers are usually suspect, but it is impossible to calculate money lost because people simply choose not to buy your software, or how many chose to download it illegally because of the DRM.
The simple answer is to not fight your customers. Instead make your product indispensible. A few people will steal it, but everyone will have a better experience and that will result in more sales, not less.
The losses in software are more difficult to see because, while only the quality and style of music companies’ products vary, software are used for many different things. Will it ever be possible to prove a program sells more or less copies because of DRM instead of the program’s quality or utility?
Some companies have began to recognize the futility of fighting people who can crack copy protection, which took months to write, in hours. The only question is how much money will be lost before they admit inevitable defeat?