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Pirates Arent Confined To The Caribbean

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  • 1. IT Magz.com - The Official web site of IT Magazine ‘The 2007 Digital Music Survey’ by Entertainment Media Research, which was conducted in association with leading law firm Olswang, reports that worldwide piracy is on the rise. Do IT experts agree? If so, does this mean security experts are fighting a losing battle? Or is there a way out? We brought in Dr Prem Chand, vice president, E Security Services, Tech Mahindra; Rajesh Mani, practice head - Media & Entertainment DRM, Tech Mahindra; Nikhil Donde, principal consultant, PricewaterhouseCoopers; Deepak Prasad, general manager, SafeNet India; and Aravind T S, software engineer, Infosys, to discuss this seemingly ‘forever hot’ issue, and found that they all agreed that piracy is on the rise. That privacy continues to prevail—nay, grow!—is not really surprising. As Donde points out, the Internet, although a technological boon, has simultaneously proved to be a bane, insofar as the proliferation and transfer of pirated content has been made very easy by way of downloads, and transmission across peer-to-peer networks, often traversing borders. Separately, barriers to the movement of pirated media have faded away as travel restrictions are lifted to encourage global travel, implying that master copies move easily from one country to another. In fact, Prasad goes so far as to opine, “Piracy will worsen, as the exchange of information will become easier with further progress in technology. Better broadband speeds,” he says, “will allow the transfer of 500 MB of software or content in minutes.” Aravind too, predicts the worst, “The development of more software products translates into more piracy.” Undoubtedly, we would all like to avail of a still greater range of digital wares and content, but at what cost? Too little of the right thing Shockingly, this gloomy scenario prevails despite the millions of dollars being spent by companies around the world to devise better ways to protect digital products. These outlays have even spawned a lucrative anti-piracy specialist segment that draws some of the best minds of the IT industry. Imagine—Internet sources reveal that every month, Universal Music ostensibly spends US$ 4000 to protect a single album, and US$ 2000 to protect a single track. But, sadly, even such generous budgets have only managed to partially solve the problem. Piracy has still not been rooted out. 1 / 13
  • 2. IT Magz.com - The Official web site of IT Magazine But why? Is it a case of misplaced objectives? Or are companies doing too little of the right thing? Mani explains how the typical anti-piracy ‘job’ “is outsourced to specialist companies known as media defender services, who trawl the Web to determine, and then jam sites from where songs are being downloaded. Other digital protection technologies like encryption, watermarking and finger-printing solutions are also being applied, but more with the aim of determining areas where content is misused, and to determine the point of leakage, than as investigative and preventive mechanisms.” Apparently then, current solutions are limited to one part of the piracy problem. For instance—consider that some music companies track the online purchases of music with the help of information included in the media content headers. These help determine say, if I’ve inappropriately shared music I’ve bought. But companies are still using such information only to suppress piracy—or as Donde says, “…to stifle the exchange process within the hacker community”—and take no direct legal action on offenders. Borderless pirates Could one reason for this supposed lack of follow-up action, as it were, be that offenders are situated across the world, and hence legal action would be both an expensive and confusing proposition? After all, as Aravind points out, “Piracy is a universal issue, even though volumes may differ from region to region, depending on how strict the local laws are.” On the other hand, Dr Chand rues, “Piracy is definitely a universal issue, as prevalent in the US markets as in India. Check out any railway platform. You will see a plethora of pirated tech products being sold! Get to any torrent or P2P sites, where you get a varied list of content posted from different parts of the world.” These insights highlight the fact that pirates and piracy are everywhere. Even so, legal action is easier in countries where anti-piracy laws have evolved, and hence are swifter to implement. In 2 / 13
  • 3. IT Magz.com - The Official web site of IT Magazine this regard, Prasad practically opines, “Though piracy is largely a universal issue, it is more rampant in developing economies where economically, software (and other digital content) is perceived as an unnecessary expense, specially where the price of the product is high.” Are pirates born or made? Prasad’s statement brings into focus a vital question—is piracy driven by careless, disrespectful attitudes, or is it a result of economic compulsions? Donde feels that piracy has not reduced because awareness has not increased the way it should have. At the same time, he segregates those patronising pirated products into three sets of people, in terms of their different attitudes towards piracy. “One set,” he says, “is genuinely unaware of the problem and its illegal nature, and hence uses pirated CDs—containing software or entertainment content. Another set consists of people who are aware of the piracy menace, yet who nevertheless get taken in. Consider a manufacturer who uses software that is partially built on pirated code as exemplifying this category. The last set of people includes those who resort to piracy because they have no choice—say an SME that would like to use genuine software but cannot afford it. So the third set faces a practical obstacle to conducting business. Even though I agree it can opt for open source software, sometimes business persons are not of a technical background, or they perceive software or IT as a mere support function to their core business; so they don’t spend too much time or energy on this problem.” Apparently, some users’ attitude is an outcome of their economic compulsions. In fact, so long as price is a criteria driving or preventing piracy, the attitude of digital content creators and owners is also part of this ‘issue’. Content owners, it could be said, must get real when it comes to pricing, and change their attitude too. For instance, a track that costs 1 USD cannot be priced at Rs 40 in India—that simply would not work. Pricing must be in consonance with the local market. For example, Tata Indicom is distributing tracks for Rs 6 to 7 to its broadband customers—this works well in India. As Mani puts it, “The idea is to make the content so affordable that people would rather buy it than pirate it.” Otherwise, even people who realise that piracy is wrong think twice about buying original content, and sometimes also veer towards piracy. 3 / 13
  • 4. IT Magz.com - The Official web site of IT Magazine Innovation should be aimed at reducing prices One could reason that if digital content owners would only siphon some of their spending on anti-piracy-ware into the technical development of cheaper products, the prices of software and content would drop as a result of technical evolution. According to Aravind, “The creation of products affordable to all would be the best solution.” He elucidates, “At present, way too many people want software for free and, in contrast, companies are not ready to cut down prices. Interestingly, both end up as losers. Those involved in piracy, either by pirating products or by using pirated products, sacrifice the security of their PCs, leaving them vulnerable to worms, viruses and other infections. On the other hand, companies are spending more time and money to protect their products from pirates. It would be better if they had spent the same money and time in making the product cheaper, and truly indispensable. A change in attitude has to be brought about, for sure, but it should be driven by the cost-effectiveness of products. This is also true in the case of emerging countries, where the US$-to-local currency ratio is high. I am not sure if there is a final solution to this problem, since educated people also indulge in it. However, its magnitude can be reduced by lowering costs.” That educated people also indulge in piracy comes as no surprise—we may all have used some form of pirated product at some point in our lives. But do educated users have any genuine cause for complaint against the sellers of content, which drives them to accept piracy? Digital ‘rights’ or digital ‘restrictions’? Insofar as piracy is a function of attitude, Mani opines, “I would like to point out that users today perceive digital rights technology or management more as digital restriction technology or management. The technology that drives anti-piracy measures is still evolving, and as long as it remains in a state of flux, the users lose out by not truly availing of the digital rights they have purchased.” For instance, if you buy music content, you would expect to be able to use it across all the players you own—perhaps a portable music player, laptop, a desktop, etc. As long as users are prevented from doing this because of certain technology restrictions (music playable on an iPod is not transferable) they tend to be less supportive of anti-piracy initiatives. They feel—‘I have been restricted from exercising my right, so why not resort to piracy now and then.’ 4 / 13
  • 5. IT Magz.com - The Official web site of IT Magazine Donde also explains how “…branding has created a demand for products across countries. When users desire a product, and it is either not locally available, or available at a price that is unaffordable, they resort to procuring its pirated version. So pricing is another major factor that needs to be addressed by content owners.” Combat piracy via innovating licensing methods So—we travel a full circle and come back to pricing! Even as he agrees that piracy is definitely a question of attitude, Prasad affirms that price is a barrier in curbing piracy. “Price,” he says, “could be reduced, with innovative licensing models to control the menace of piracy. Software and content development organisations should come up with innovative licensing models. These low price models, very near the cost of pirated products, will help push the adoption of licensed products by customers. Good licensing models, the option to pay per use, ‘n’ tier models, subscription and availability on mobile devices will all prove useful. The adoption of stronger protection technology, coupled with the use of protection technology in licensing, such as providing software or content for consumption at 10 per cent of the cost for a limited time period, will ensure a win-win situation for both developers and customers.” Regarding tech innovations, Donde seconds the need for a proper licensing mechanism for solutions, as this will help change user attitudes. He cites the example of Microsoft coming up with a digital rights management solution, which was countered by a similar open source product by the Open Mobile Alliance. What this practically does is to create choice for users. “Buy me—I’m licensed to support you”! Eventually, such competition will drive prices further down, to the extent where users will no longer, in Prasad’s words, “…consider it worthwhile to own a pirated version. These low prices, coupled with a changing attitude towards piracy, whereby more users are keen to own authentic licensed versions of products rather than compromise on future support, upgrades, etc, is what will finally change the scenario.” 5 / 13
  • 6. IT Magz.com - The Official web site of IT Magazine Aravind believes that customers may be encouraged to use genuine products by showing them how much they stand to lose in terms of product support and updates. He explains why cutting prices should never be an issue, as “…companies can still have back-end sales, charge for updates and support, and think up other novel ways to monetise their products. They should note that most of Google’s online services are free of cost. Here, perhaps, is a lesson for other companies—‘qualified customers are worth more than what you think’.” Any solution will work—provided it is installed in time! Speaking of lessons, companies must also take timely steps to ensure they are not caught off guard. Donde elucidates, “Digital rights management has its own place, as it helps meet key security objectives. Simultaneously, there are other measures intended to keep documents safe, code secure, and digital media protected. There is room for many specific solutions, and these are all useful, but sometimes people wake up only after they have suffered a loss to piracy. It is essential to bring in experts to assess the risk a company faces, not just once, but continuously at regular intervals. Sometimes, a company takes things lightly and gets caught at its weakest moment. Companies can only stay ahead of ‘pirates’ if they are actively involved in protecting their content.” Innovate at both software and hardware levels Simultaneously, technologists must focus on innovations both at the software and hardware levels. Hardware level protection is by now well known. For instance, companies have devised a secure music path concept, whereby digital music files are protected by virtue of analogue (player) sound cards. If people try to record a song playing via an analogue source, they will not be able to make a ‘digital’ quality recording. Other innovations happening at the hardware level are by Microsoft in Vista; they had earlier come up with the Secure Audio Path technology in XP and ME. New formats like DTH (Direct To Home) TV involve the use of set-top boxes incorporating both software and hardware to counter piracy. If these boxes are opened, a key that was burnt into the hardware gets erased and the set-top box is rendered useless. Mani says, “This kind of 6 / 13
  • 7. IT Magz.com - The Official web site of IT Magazine software-hardware combo protective solution will succeed in limiting the access to a service or product—to those who possess hardware—as well as limit the range of services availed of—by coding the hardware according to rights paid for. Basically, companies must realise that consumers must retain the rights they pay for.” Aravind also favours a combination of both kinds of protection. “While hardware-level protection makes the product machine-dependent, protection at the software level could be relatively easier to crack. Both have their own set of pros and cons, and striking a balance may only be a matter of time,” he says. A multi-pronged effort A balance could well be the way out—as Prasad explains that both hardware and software protection will co-exist due to the benefits each has to offer in varying scenarios. But holistic technological evolution must be matched by a renewed focus on awareness, to result in a permanent attitudinal change—among common people and in legislation. Donde cites the “…efforts of governments of Third World countries to enforce policies to ensure they use authorised software across departments. They are also waking up to the possibility of using open source licences. India is at the forefront of this awareness drive towards compliance, and is taking many steps in the right direction. People addressing the piracy problem must be very clear about where there is the most non-compliance. Advisory bodies could help launch ad campaigns, and suggest policy level changes such as the now reasonably comprehensive Indian IT Act,” he says. At the end of the day, Dr Chand observes, “A mix of tech innovation and a change in attitudes, both at the user and corporate level, is what could solve piracy across the world. If technology is implemented in a user-friendly way, it is only a matter of time before piracy is eradicated.” Fair enough—at least we have something to look forward to! The Voice of the People 7 / 13
  • 8. IT Magz.com - The Official web site of IT Magazine In spite of all the rhetoric about containing (never mind eradicating) piracy, pirates and their wares abound. Why? Are the technological innovations coming out of small and large IT stables not useful, or lacking in genuine deterrents? Or are the masses just adamant about supporting piracy, for whatever reasons? On behalf of ‘i.t.’, Charu Bahri spoke to a few well-placed experts and consultants for their opinion on what would be the best approach to abolish piracy. Is the piracy menace getting better or worse, and why? “Most of China runs on pirated software, and there is little that the affected companies can do about it. Even Internet operating systems used in networking gear by companies like Cisco seem to have been pirated by Chinese companies providing similar equipment at a fraction of the cost. At the same time, software like Windows has evolved to make piracy difficult, if not impossible. Overall, piracy as an issue is moving to a different zone, with control and action shifting from regulatory machinery to the market participants themselves.” – Sanjay Negi “Yes! It is getting worse, with disruptive and storage technologies becoming cheaper and new technologies arriving on the scene. A few examples… - People can send content, images and software easily on Bluetooth, IR (Infrared), Wi-Fi or Zigbee without realising the copyright violation. - Technologies like DRM (Digital Rights Management) are creating more opportunities for hackers and underground sites, which increase traffic to their sites by hosting cracks, patches for breaking DRM codes. - New technologies like wireless-USB (Universal Serial Bus)/UWB (ultra-wide band) and WiMAX will allow people to transmit gigabits of audio, video and other information in a jiffy to an innocent and honest user. - Falling prices of storage technologies—SD (Secure Digital), MicroSD, etc allow people to store, carry and transmit large amounts of data and trade information.” – Gurudev Goud 8 / 13
  • 9. IT Magz.com - The Official web site of IT Magazine “I would like to point out that software piracy has always been one of the foundations of India’s IT success, especially amongst the small and medium enterprises. In fact, I am aware of companies of even 500 employees or nodes in the late nineties who maintained a 10 per cent licensing policy—for every 100 usage nodes, ten licences were the norm. Though there was at least a single licence of every software in use, under-licensing has always been the norm. I am sure that has changed for every company listed on NASDAQ, due to the appropriate declarations required by US legislation. I still believe that the norm may have been increased for other companies, but we are still a long way from adopting the ‘full licensing’ paradigm. From a financial perspective, I am personally sure that full licensing, if adopted by any small and medium (less than Rs100 crores of turnover) technology enterprise will push its cost structures beyond competitive sustenance. And, as such, will serve to maintain the hegemony of the large and multinational software companies. If I want to buy twenty licences, I am likely to pay a price that is more than ten times the price per licence paid by an MNC with 250 or 1000 licences. If they will get the benefit of volume pricing, I, as an entrepreneur, am forced to take recourse to piracy to remain competitive. Software piracy is not only about the rights of the vendor but also about the compulsions of the buyer.” – Jayant Tewari “The piracy menace is definitely getting worse. People are looking for pirated software, as it’s cheaper, and sometimes free of cost. I would say piracy is changing the attitude of people towards real products. Sometimes, piracy is introduced by ‘other’ parties to cause economic breakdown. These may include competitors or other nations. Rules governing piracy are limited, and are sometimes applicable only in certain jurisdictions.” – Amit Kumar S Mahajan What will eradicate piracy – a tech innovation or a change in attitude? Why? 9 / 13
  • 10. IT Magz.com - The Official web site of IT Magazine “Piracy as practised today may become irrelevant before it can be eradicated. With the move towards Web applications like Google Docs, and even Microsoft following suit in a limited way, much of the popular applications like word processing, spreadsheets and presentations would be available over the Net, and the mass market for these products may shrink, if not disappear altogether. Enterprise business applications and systems will of course continue to be licensed, and these do not suffer from much piracy in any case.” – Sanjay Negi “There are initiatives being taken to eradicate piracy. Definitely, it does not need tech innovations, as ‘pirates’ take up every tech innovation as a challenge and try to find solutions for it. Attitude is the only thing that will eradicate piracy. But attitudes present a dilemma – people making products should find a mid-way to kill piracy. For example, they can sell a low-quality version of their product at the same rate as the pirated copy. This is what will change the attitude of people, as they would prefer buying the original product instead of the pirated one. We know that this is happening in the entertainment media, and it’s working, which is a positive sign. The easy availability of products at moderate prices will definitely eradicate piracy.” —Amit Kumar S Mahajan “Piracy of all sorts is as old as humanity, and will be here to stay as long as humanity exists. While we all know piracy cannot be eradicated, a change in attitude and business models will address the issue of piracy to a huge extent. Technologies that try to address piracy directly will only create more opportunities for pirates, and will actually aggravate the problem. Listed below are a few examples of how a change in attitude and business models will address the problem of piracy to a large extent: - Loyalty programs by content/music firms with user groups and customers and other innovative methods (like appointing hackers as a legal distributor). - Incentives for not sharing copyrighted content (e.g., if an iPod can track that no content was transferred through USB/IR or other means in one year, then you are entitled to an iPhone). - New laws that will allow copyright owners to own the copyright for a limited time period (like pharma-molecules patents). - Incentives to share content: e.g., an algorithm in a forthcoming music video by Shakira 10 / 13
  • 11. IT Magz.com - The Official web site of IT Magazine that will actually increase the Hi-Fi/HDTV (high-definition television) quality of the album or will allow bigger discounts on another volume every time it is shared. So users, in the pursuit of better quality, will actually share the information with multiple users and increase the record sales in return. - Technologies that help implement the above business models. For instance, KTwo has created an Intellectual Property Protection System (IPPS) that allows firms to transmit and share their IP freely, but the moment a customer of the firm starts using the IP to make money, the IPPS system prompts or asks the user to register and pay for the extent the user wants to earn money through the IP.” – Gurudev Goud   The respondents     Name   Designation / Organisation Dr Prem Chand   Vice president—E Security Services, Tech Mahindra Rajesh Mani 11 / 13
  • 12. IT Magz.com - The Official web site of IT Magazine   Practice head—Media & Entertainment DRM, Tech Mahindra  Nikhil Donde   Principal consultant, PricewaterhouseCoopers   Deepak Prasad   General manager, SafeNet India   Aravind T S   Software engineer, Infosys Jayant Tewari     Independent outsourced CFO to small and medium technology companies, http://OutSourcedCFO.GooglePages.Com 12 / 13
  • 13. IT Magz.com - The Official web site of IT Magazine   Sanjay Negi   CEO, TBS: Technology for Business Solutions   Amit Kumar S Mahajan   Software engineer, Mastek Ltd.   Gurudev R Goud   Vice president—Business Development, KTwo Technology Solutions       13 / 13

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