Piracy – The Secret Money-Maker for the Hardware Industry – ID Software CEO

The computer industry has, no doubt, been a huge success in the last 50 or so years – including the hardware side of things. Has all that success been largely thanks to piracy?

Note: This is an article I wrote that was published elsewhere first. It has been republished here for archival purposes

The CEO of ID Software seems to think so.

CustomPC is pointing to an interesting interview on GameIndustry.biz where the issue of software piracy was brought up towards the end. Here’s an exerpt from the portion in question:

Todd Hollenshead: There’s lots of things that [the hardware industry] could do [to stop piracy] but typically just they just line up on the wrong side of the argument in my opinion. They have lots of reasons as to why they do that, but I think that there’s been this dirty little secret among hardware manufacturers, which is that the perception of free content – even if you’re supposed to pay for it on PCs – is some sort hidden benefit that you get when you buy a PC, like a right to download music for free or a right to download pirated movies and games.

Q: You think they’re secretly happy about it?

Todd Hollenshead: Yeah I think they are. I think that if you went in and could see what’s going on in their minds, though they may never say that stuff and I’m not saying there’s some conspiracy or something like that – but I think the thing is they realise that trading content, copyrighted or not, is an expected benefit of owning a computer.

And I think that just based on their actions…what they say is one thing, but what they do is another. When it comes into debates about whether peer-to-peer file-sharing networks that by-and-large have the vast majority, I’m talking 99 per cent of the content is illicitly trading copyrighted property, they’ll come out on the side of the 1 per cent of the user doing it for legitimate benefit. You can make philosophical arguments that are difficult to debate, but at the same time you’re just sort of ignoring the enormity of the problem.

Aside from the fact that there is, not only no solid evidence to support the theory that 99% of all material on file-sharing is unauthorized, but no means to even calculate exactly what is authorized and unauthorized, this seems to point to quite an interesting trend in the anti-piracy movement.

This bit of news seems to follow-up our recent report about software companies sending thousands of lawsuits to alleged copyright infringers.

Earlier this year, there was a movement to get ISPs to stop copyright infringement, but so far, only Britain seems to have been trying to follow through with the plans with France attempting similar action.

Trying everything, the RIAA tried to get anti-virus companies to filter for copyright infringement earlier this year as well, though anti-virus companies would likely be better off actually filtering out Trojan horses rather than keeping MP3’s of Metallica off of people’s hard drives.

Still, the argument that the hardware industry id benefiting off of piracy isn’t without merit. Whenever a physical anti-piracy bust actually occurs, CD and DVD burners as well as computer hardware are frequently confiscated – someone had to buy those somewhere along the line – or at least the necessary parts for it.

On the other hand, the idea isn’t without a counterpoint. It’s really hard to deny that computers have advanced at a fast rate. Part of that development was increasingly less need to compress a program into efficient code since computer processors have increased in performance as well. When there’s less need to compress the code, there is more of a need to increase a software’s capability. That, in turn, creates a need for a computer with better performance – the cycle continues today.

So if the software industry is upset over how well the hardware industry is doing, it also only has itself to blame because the software industry has also benefited from the hardware industry. This raises the issue of why there is sudden tension between the software and hardware industry in the first place when both industries seemed to have benefited from each other for years. Can one even exist without the other?

Then again, these days, there have been breaks in seemingly solid alliances. The major recording industry has upset the radio industry with royalty hikes. Internet Service Providers have been making enemies out if their own customers through spying allegations and filtering. It seems as though one can add the software industry being upset at the hardware industry to the list now. Many have said that companies would be crazy to break such alliances, yet here we are today seeing exactly this. It’s a situation that, to some, would make as much sense as Duracell taking legal aim against the flashlight industry.

One should also take into account that this is just one CEO’s opinion and might not reflect the overall opinion in the software industry (effectively blaming the hardware industry for the software industry’s supposed woes) It would be hard to imagine that everyone in the software industry thinks it’s the hardware industry’s fault that piracy exists. One thing is for sure, in a situation where many things up to the world-wide economy is in a state of flux, nothing is always certain.

Drew Wilson on Twitter: @icecube85 and Google+.

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