Online Software Piracy a Threat, Too

Online piracy isn't just a problem for movie makers and recording companies. Software makers, too, are suffering from unauthorized distribution of files across the Internet, suggests a survey sponsored by the Business Software Alliance (BSA).

The BSA on Wednesday announced the results of the recent survey, which found that less than half of the 1026 U.S. Internet users who participated said they regularly pay for the commercial software they download. Paradoxically, the survey also revealed that the vast majority of respondents feel software developers should be compensated for their work. The survey was conducted by research company Ipsos-Reid.

Pay-to-Download Issues

This conflict demonstrates that users are still forming their opinions on Internet distribution of software, says BSA president and CEO Robert Holleyman. This gives his group a chance to educate them on the realities of online piracy, he says. "I think that today the most important things are education and enforcement," he says.

BSA is employing its own tactics in an attempt to change the "situational ethics" of Internet users who say that whether they pay for downloaded software depends on the circumstances. For instance, BSA in February began using a tool created by MediaForce to help identify and shut down Web sites that illegally distribute copies of its members' software titles.

MediaForce's tool scours the Web for sites that use file distribution technology, such as FTP (File Transfer Protocol) or peer-to-peer systems, and searches those sites for program files belonging to BSA member companies. Once such sites are flagged, a BSA investigator verifies that the files are being distributed illegally and authorizes the software to generate a "notice and take down" request that is sent to the Internet service provider (ISP) hosting the site. The software does not identify the person running the site, says John Wolfe, BSA's manager of investigations, but instead flags the site's IP address and links it to the hosting ISP.

Once notified, the ISP must inform the infringing site's owner of the violation. If the site's owner does not take down the files in question, the ISP is obliged under the Digital Millennium Copyright Act to shut down the site. Since beginning to use MediaForce's tool, the BSA has sent out 8500 notices and was challenged on only two of them, Wolfe said. The DMCA was passed in 1998 to extend U.S. copyright law to digital works.

The Lowdown on Downloads

The Internet piracy survey represents the first attempt by the BSA to understand users' behavior and attitudes toward online software distribution, which will become an even bigger problem for business software developers in the future, Holleyman predicts. BSA members--consisting of professional software makers such as Microsoft, Adobe Systems, IBM, and Symantec--believe that, by 2005, two-thirds of software distribution will be done over the Internet, Holleyman says.

Still, Holleyman maintains that unauthorized distribution of software over the Internet represents only a small portion of the $12 billion that the software industry loses annually to piracy. The majority of theft is still done in workplace settings where, for example, companies use unauthorized copies of software titles to run their business, he says.

Despite the BSA's strong stance against Internet piracy, Holleyman is careful to note that the group does not align itself with critics of online distribution systems such as peer-to-peer networks. While some people in the entertainment industry target peer-to-peer sites as the root of Internet piracy--because of the ease with which these networks can distribute unauthorized content--Holleyman says the technology is important to BSA's member companies.

And despite the work the BSA has done with the entertainment industry in pushing for public policy and in sharing information regarding best practices for protecting copyright works, the alliance is against a bill sponsored by Senator Fritz Hollings (D-SC) that would force government-mandated copyright protection technology on the industry. This bill, called the The Consumer Broadband and Digital Television Promotion Act, has garnered the support of many entertainment industry executives.