I know that it has been awhile since I posted anything on here, but I have not had much time to do so as I have had a lot of stuff to do for my college courses.  I had to write a term paper for one of my courses and I chose the topic of piracy and DRM.  While this can be a touchy topic, with the upcoming release of SimCity with always online DRM, I wanted to post my term paper and possibly raise awareness about the issues of DRM.  I apologize ahead of time for the lack of pictures.


***NOTE: All that follows are my personal views and do not necessarily reflect the views of the website as a whole***

Piracy is undeniably rampant in today’s culture.  However, what exactly is the reason for piracy?  Are people lazy?  Do they feel that the product is not worth the price?  Is it a problem with the service provided by companies?  All of these could be possible causes.  DRM (Digital Rights Management) is not a solution to piracy, and how it works can quite often be counterintuitive to preventing it.  There are other possible solutions besides DRM to try to help solve piracy.  To be able to properly analyze the matter, we need to first take a look at the background of piracy and the causes of it.

Piracy, by definition, is “the unauthorized reproduction or use of a copyrighted book, recording, television program, patented invention, trademarked product, etc” (“Piracy”, Def. 2)  In terms of the internet and technology, this means the uploading or downloading of copyrighted material that the original author did not give consent to be distributed.  This covers a wide range of media types, including TV episodes, movies, software, and music.  The different industries are affected by online piracy; but to what extent?  There is no definitive answer to that question as there is no way to accurately measure piracy rates.  Every torrent, a file type that is commonly used to illegally download content, and every file sharing thread would need to be searched through and determined to be fake or not to be able to even start measuring piracy rates successfully.  This amount of work is insurmountable when you consider the fact that thousands of torrents are uploaded onto hundreds of sites on a daily basis.

There is no question that the various industries are affected, but the calculations done on piracy are usually by the companies themselves, and they do not release how they arrived at their estimates.  Looking at some specific examples; this year, Ubisoft claimed that the piracy rate on their software was an astounding 95%.  However, this figure was arrived at through guesswork and it begs the question of how a company could even manage to operate if 95% of their software that is in people’s homes is pirated.  Coincidentally, the music industry has also claimed that it has a 95% piracy rate.  (“Online Piracy in Numbers…”).  The most pirated content on the internet usually coincides with the content that has the most sales.  Out of the 10 most pirated movies of 2010, 90% were in the top 20% of highest-grossing films for the year they were released and 70% were in the top 5% of highest-grossing films for the year they were released (“2010 Yearly Box Office Results”).  So how much is lost in sales for these industries?  Supporters of SOPA, the Stop Online Piracy Act, claimed that the cost of online piracy to the US economy was between $200 and $250 billion per year.  They claimed that it also caused a loss of 750,000 jobs.  However, the Government Accountability Office released a statement that the figures used to support SOPA “cannot be substantiated or traced back to an underlying data source or methodology.”  This means that no basis could be found for the estimates used.  Another estimate released by the IPI, the Institute for Policy Innovation, claims the loss is much smaller at $58 billion; but it too has been criticized for the methodology used to obtain these estimates (Raustiala and Sprigman).  The fact of the matter is no single company or organization can clearly and accurately estimate the cost of online piracy.  These statistics show that while piracy is a problem, the depths to which it reaches are unclear.

People who do pirate products can do so for one of three main reasons.  For some it is the fact that they cannot afford a product, and if they can get it for free, why would they save up the money to actually purchase it instead?  This mentality has become more widely accepted due to the fact that the effectiveness of counter measures is extremely low.  This relates to DRM so we will go into this deeper in a little bit.  There are also those who do have the money for products but decide they do not feel like paying the full price or anything at all for that matter, to get the product, so they turn to piracy (Strickland).  The last major reason why people pirate is because of a service problem, by service problem, I mean how the company distributes the game.  Releases for countries are often on different days, and sometimes they can occur over a month apart from one another.  Users in the country that gets the product a month after it was first released turn to piracy so they can get the product at the same time that everyone else does.  The United States usually receives most games at least a day or two before other countries, and this could possibly explain why the piracy rates in the United States are relatively lower than other countries.  While this is a large part of the service problem, the term “service problem” can also refer to the use of invasive DRM that interferes with the user’s experience while using the product; in this case, the user might pirate a product because they want to avoid the DRM.  This is the link between piracy and DRM; while DRM is designed to protect against piracy; it hurts legitimate users more than it hurts people who pirate content.

So what exactly is DRM?  DRM, as previously stated, stands for Digital Rights Management and what that entails are the various methods that are used in an attempt to protect content from being copied and illegally distributed.  DRM dates back to the 1970’s and has been around since the first computer.  While there have been dozens of methods used by the various industries, mainly the software industry, throughout the years; the only ones that will be covered in-depth here will be the more recent forms as they will be the most relevant to the issue of piracy in today’s society.

First up is the software industry, which, for the most part, will encompass gaming and its history of DRM.  The first modern day DRM is product keys.  These are random sequences of letters and numbers that the user would have to enter before installing the game to confirm that it is in fact a legitimate copy.  This is a mild inconvenience for users and it is much less invasive than other modern day DRM methods because it only requires you to do this one time.

The next form of modern day DRM that came about is third party software.   This third party software includes programs such as SafeDisc and SecuRom.  These programs are installed with the game and removing them from the computer will cause the game to no longer work.  These programs are also known to have bugs, which includes not properly recognizing the disc for the game is in the drive, which makes it so that you cannot play the game.  This form of DRM is much more of a hassle for legitimate software users because it can deny them access to their programs that they had purchased.  Third party software hurts genuine users and it is largely ineffective against preventing piracy because hackers are able to remove the countermeasures from the programs.  While it does delay hackers from getting to the software, one of the longest times was 422 days; the hackers still do get to it, which means that in the end it is ineffective (LGR : History of DRM & Copy Protection in Computer Games).

Limited installs can also cause the legitimate user some grief.  The title is pretty self-explanatory, the software is only allowed to be installed a certain number of times.  However, there are different types of this.  Some will just limit the number but allow you to call a phone number to get more installs, while the much more invasive method will scan your computer’s hardware and store it in a database.  In the case of some games, this profile of your computer was so specific that if you changed even just one piece of hardware in your system, the game would count it as a separate install.  This means that a user could inadvertently use up all of their installs on one computer because they changed their hardware.

A newer form of DRM is Always Online DRM.  This means that to use the software, the user must have an internet connection.  This, like the limited installs, also has varying levels of how they affect the user.  The first, and more intrusive level, is software that require you to always be online while using the software.  If you lose internet connection for any reason, the software will stop working and you will lose any progress that you made (B, Ryan).  One of the most notable times that this method was used was with the video game: “Assassin’s Creed II.”  In that case, the game had to always be online, and the saved games were stored on servers run by Ubisoft, not on the user’s computer.  This meant that to access your progress, you had to have a connection.  Ubisoft received so many complaints about their use of this that they finally changed the DRM in an update for the game.  They decided to switch to the other level of always online DRM, which is when a program online requires an internet connection when the program starts up, as opposed to a constant connection requirement.  This clearly can impair a user’s experience with the software and it also keeps users who do not have access to the internet from using the software.

The final form of modern day DRM, distribution clients, is not the newest form, but it is the most important.  Distribution clients are programs that are used as a storefront to sell software.  These include programs such as Steam, Origin, and Games for Windows Live.  All of these clients sell games, but they also act as DRM for the software that they sell.  They act as DRM by requiring a user to login to their account and by verifying the games in that user’s account by checking it against their servers.  The clients do allow you to access the software offline, but some clients, such as Steam, require you to download the credentials for your account before going into offline mode.  This means that if a user goes offline without having downloaded their credentials, they will not be able to use the software.  This is the major flaw of distribution clients, but as long as the user is educated about what they need to do, it will become a non-issue after the one-time download of their account credentials.  Another flaw of distribution clients is that they can often come with the other forms of DRM that have been previously mentioned.  This means that software downloaded through distribution clients can suffer from the downfalls of both types of DRM.  However, distribution clients are the most liked from of DRM.

Steam leads the pack when it comes to distribution clients, so we will take a more in depth look at it.  Steam is the distribution client that is run by the gaming company “Valve.”  Since its inception in 2003, Steam has grown to have over 40 million user accounts and a 51% market share (Tim).  This can be attributed to the many sales that they host throughout the year and the major discount sales that they host during the middle of summer and during the winter holiday season.  These sales draw millions of users; in fact, during the 2011 holiday sale, Steam had five million users online at the same time.  Valve is able to work with game developers to offer big discounts because of the business model that they have adopted which greatly differs from the typical distribution client model.  While the normal retail model only gives the game developers about 30% of the profit, Valve is able to offer them about 70% of the profit (Tim).  This gains them many users who want to support the developers more than they would through normal distribution methods, and it also draws in many developers who are looking to make more money than they would through the typical model.  Due to its popularity and the ease of its user interface, Steam could likely be a way to put an end to piracy.

This seems to be an opinion that is exemplified by an article written by a Steam user about their experience with Steam and how it affected their use of piracy to obtain the games that they wanted.  In his article he states that “in a way the main reason I was pirating games was that I was lazy and there wasn’t a service that catered to me” (“How Steam Stopped Me …”).  This shows that this user’s reason for turning to piracy was a combination of not wanting to pay for the game, the laziness the author mentions, and a service problem.  The anonymous author also clearly shows his opinion of DRM when he says:

Digital Rights Management is a curse word around the Internet. It’s not that most people want to take money away from the developers and engineers that worked day and night for years. No, but rather most DRM schemes are obtrusive and get in the way of actually enjoying the game — or music, ebooks, or movies.

Look at Ubisoft. In order to counter piracy, they require all their games to have a constant internet connection. This means you’re SOL if your Internet drops or you wanna play a game on an airplane. Craziness. It’s this sort of scheme that forces people to pirate games (“How Steam Stopped Me…”).

This opinion of DRM is quite common among the gaming community.  DRM acts only as a hindrance as opposed to being something useful.  The article and the viewpoints of its anonymous author also mirror my own experience on the matter.  I used to get some of my video games through torrents for a combination of two reasons.  The first was that sometimes, I simply could not afford a new game when it was released and the second was that I disliked the methods that companies used that could affect gameplay.  While neither of these reasons justifies illegally accessing content, it does show the reasons why people pirate, which should allow us to come up with possible solutions by eliminating the reasons to pirate content.  In my case, the answer was in fact Steam; with its constant discounts and its mostly unobtrusive DRM, it eliminated my two reasons to not actually buy content and give the game developers their, usually, well-earned money.  While there are still a few hiccups with secondary DRM on some games, Steam is able to offer a mostly user friendly experience and it could be the basis for the solution to the piracy of PC games.

The DRM in other industries is much less invasive than those in the gaming industry.  Almost all movies and TV shows come on encrypted discs or in encrypted files.  These encryptions require either a login or confirmation that the actual disc is present in the drive.  With music, most files come DRM free; however, there was a time where iTunes encrypted their mp3 files so that you would have to sign in to iTunes to be able to play your music.  When this was removed, iTunes decided to try to cash in on the conversion by charging users thirty cents per song to receive a DRM free copy.  This further made users dislike the DRM that came with their content.

Regardless of what type of medium it is on, DRM has become largely ineffective.  Software crackers are able to remove DRM from software within days, if not hours, of its release.  There is commercially available software to copy a DVD or Blu-Ray that will decrypt the files and then copy them to your computer.  There are also programs available to decrypt the DRM on video files.  The DRM for music is basically non-existent now, which shows that even the companies producing the music have realized how ineffective their DRM has become.  Unfortunately, DRM is still provided with products and the type of product most affected by this is video games.  They can often be rendered inoperable or unplayable even if the user has legitimately purchased the software.  When taking gaming and software combined, they make up for about 13.4% of pirated items on the internet, and that statistic was from 2010.  The percentage will most likely be higher today due to the fact that more and more people have gained access to the internet but they do not necessarily have the money to purchase all of the software that they want or need.

So how can piracy be fixed?  The general and simple answer to that question is that it cannot.  There is no method that can completely eliminate piracy.  No matter how hard companies and even governments try to get rid of it, hackers and tech aficionados will consistently thwart their attempts.  However, there are methods that can be used to at least lessen the impact that piracy has.  To simplify things, we will only be looking at possible solutions for the software industry.

One possible solution is the complete removal of DRM, which would eliminate the bugs that come with it and would allow users to have a better user experience.  However, this solution also has the potential to have the complete opposite effect and make piracy rates worse.  A second and better option is to have less invasive DRM, such as the product key method that was previously mentioned.  However, this only eliminates one of the reasons why people pirate, that reason being that they want to avoid DRM.  Another possible solution would be for companies to offer more incentives to purchase rather than pirate the game.  This option usually takes the form of some sort of physical memorabilia or some small bonus in-game; and for people who just want to play the game and do not care about that, this method would be ineffective and also run up the cost of the game for the user and the game developer.

The final and best option, in my opinion, is to create better distribution methods.  Steam has already taken strides in this area by offering affordable games to a wide range of users.  This option tackles two of the three previously mentioned reasons for piracy.  For those who do not have the money, it lowers the price of games to something that is much more likely to be affordable to them; and it eliminates the service problem by creating a hassle free method of downloading and using products.  While secondary DRM and users who have money but simply do not want to pay for items are downfalls of this system, at least one of them can be eliminated and it might just encourage some of the users who have not paid for products to consider doing so.  Unfortunately, for the others, some people do not change and will always have the mentality that they do not have to pay for things simply because they can find it for free, whether legal or not.  However, Steam and other digital distribution methods can strive to keep improving and help to decrease the amount of piracy that occurs.


Works Cited

“2010 Yearly Box Office Results.” Box Office Mojo. IMDB, n.d. Web. 26 Nov. 2012.



B, Ryan. “The Video Game Industry and DRM – Time for a Change.” Yale Law & Technology.

N.p., 18 Mar. 2010. Web. 26 Nov. 2012. <http://www.yalelawtech.org/ip-in-the-digital-



“How Steam Stopped Me from Pirating Games and Enjoy the Sweet DRM Kool-aid.” Tech

            Crunch. AOL, 5 July 2010. Web. 26 Nov. 2012.




LGR : History of DRM & Copy Protection in Computer Games. Perf. LGR. YouTube.

Phreakindee, 26 Oct. 2012. Web. 26 Nov. 2012.



“Online Piracy in Numbers – Facts and Statistics [Infographic].”Go-Gulf. N.p., 1 Nov. 2011.

Web. 26 Nov. 2012. <http://www.go-gulf.com/blog/online-piracy>.


“Piracy.” Def. 2. Dictionary.com. Dictionary.com, LLC., n.d. Web. 26 Nov. 2012.



Raustiala, Kal, and Chris Sprigman. “How Much Do Music and Movie Piracy Really Hurt the

U.S. Economy?” Freakonomics. Freakonomics, LLC., 12 Jan. 2012. Web. 26 Nov. 2012.




Strickland, Jonathan. “Why Do People Pirate Software?” How Stuff Works. HowStuffWorks,

Inc., n.d. Web. 27 Nov. 2012. <http://computer.howstuffworks.com/pirate-



Tim. “Steam: Valve’s Ingenious Digital Store [Infographic].” Daily Infographic. N.p., 24 Feb.

2012. Web. 27 Nov. 2012. <http://dailyinfographic.com/steam-valves-ingenious-digital-