Replacing the Stick

One of the most interesting things we read this week came from ELSPA's new director general, Paul Jackson (who has admittedly been in the job for several months, but after over a decade and a half with Roger Bennett at the helm of the trade body you'll forgive us if we absent-mindedly refer to Jackson as the "new" DG for quite a while).

He was discussing in broad terms the organisation's new approach to fighting piracy. Acknowledging the closure of the trade body's Evesham-based anti-piracy office and the decision to halve the number of investigative staff, Jackson talked about the vast changes taking place in "the landscape for the theft of IP" and the need to change how the industry responds to this.

Jackson is right, of course - the landscape of piracy is changing, not so much "rapidly" but at breakneck speed. Ironically many of the people whom ELSPA's anti-piracy measures have tackled in the past are being left behind by new developments in this sector just as much as ELSPA itself was.

The traditional channels of pirate material - the shadowy "large organisations" who duplicated discs en masse and distributed them through a network of dishonest types with market stalls and the like - have been left in the dust. As a result, every announcement from law enforcement agencies that they've cracked another market stall piracy operation sounds more and more like a Pyrrhic victory - exterminating a few rats in the kitchen while failing to do anything about the tigers locked in the bathroom.

The reason, of course, is the Internet - a system which has changed piracy in two key ways. One of these was widely predicted, but the other has come as a shock which much of the videogames industry still hasn't quite absorbed the wide-reaching impact of.

The predictable effect is that the download of game software is becoming easier and easier thanks to rising broadband speeds - which is entirely removing the need for market traders or paying for pirate software for an increasingly large segment of the market. That alone would be cause for the industry to massively rethink its piracy strategy, but it's far from the only effect of broadband penetration.

The other effect is most clearly visible in the ongoing battle between Sony and various hacker groups over the PlayStation Portable firmware - a battle which the platform holder is losing badly. Anyone buying a PSP can now play homebrew or pirate software on the system without ever needing to unscrew the cover of the console; they can simply upload a hacked version of Sony's own firmware which strips out much of the protection and adds many new features, and install it in a process as simple as upgrading the official software.

No chip is required, no factory turning out complex hardware to bypass security, no shipments of EUCD-infringing silicon to intercept, no dodgy geezer in the back room of an electronics shop soldering console circuitboards and throwing in a few gold discs of top games with every purchase. Just download a file from the Internet, copy it to your PSP and off you go.

So who makes these files? Surely there, at least, there's a group that the industry can pursue or threaten? Unlikely. The files used to modify the PSP - and, indeed, the soft-mod files used to modify the original Xbox - are worked on by a vast array of unconnected people, each beavering away on a different part of the security problem, often communicating only through anonymous web forums and hacker pseudonyms.

A lot of them are bright teenagers and students; none of them are the kind of hardened criminal that some in the industry would like to imagine. No hardened criminal would waste his time on this endeavour, since the work that these people do on cracking console security is made available completely without cost, gratis, and for free.

That's the real change wrought by the Internet on piracy - and it's not just in the development of firmware (and chips, since several popular chip designs are now "open source" and can be built by anyone with a few pounds worth of electronic equipment). It's also in the distribution of software, where the only large organisations are actually not organisations in the conventional sense of the word at all. They are loose groupings of people who have never met one another and know little about each other's real identities, working in their homes scattered around the world to be the first people to launch a hot new videogame onto the Internet in cracked form.

Just as the Internet has enabled volunteers around the world to develop software like Linux which it would cost millions of pounds for a major software company to create, so too it has allowed groups of anonymous individuals to develop copy protection hacks which would previously have been the realm of a well-funded criminal body. The criminals are out of a job - but so, too, are the industry's piracy investigators.

After all, how do you track down a piracy group when they don't even know each other's identities? How do you trace a group developing a chip when there's no money trail to follow, because no money is changing hands? How do you intercept the transfer of pirated software when there are no physical goods to intercept?

The answer which some people in the media industries will trot out at this point is that they need more legislation, more Government protection, more powers to enforce their copyright. Unfortunately for them - but fortunately for the civil liberties and balance of law in our countries - this probably isn't going to happen.

Public opinion has swung brutally against media companies in recent years, a swing which many people within those companies don't quite appreciate yet but which many politicans are easily shrewd enough to have noticed.

The media firms have systematically blotted their copybooks with the public with everything from restrictive DRM and the headline-grabbing Sony rootkit debacle, to the ham-fisted attempts to associate piracy with terrorism - which rankled particularly in the wake of the September 11 attacks.

In an environment where most piracy is of material which is downloaded or copied for free, the attempts to form a link in the mind of the public between this activity and terrorism has become the subject of parody and ridicule - and has added to a growing wave of distrust and dislike for the huge companies which control much of the planet's IP. In the face of such discontent, what government is likely to give the media industries new, more intrusive and hugely controversial powers of investigation?

This malcontent is, of course, aimed primarily at music and movie industries - but the backlash will be felt by the videogames industry as well. It may, however, be the best thing which has ever happened to anti-piracy efforts in this market. Faced with the prospect of the stick being broken - or rather, of not being able to find anyone to hit with it - the industry must turn its mind to the carrot. Here, perhaps, lies the ultimate solution to the problem of online piracy.

Why do people pirate software online? There are two key reasons; the first, of course, is that people like getting things for free instead of paying for them. That will always be the case, and it will always be the case that a certain number of people will pirate software no matter how difficult you make it, simply because they are bloody-minded about paying for it.

The second reason, however, is that there is obvious demand for software to be available online, and to be easier for users to manipulate. The ability for users to download software, to install it without a CD, to store it on their hard drive (either in their PC or their next-gen console), to play it without load delays from a Memory Stick - these are things which users want to do, and which you can't do with legitimate software.

The awful truth is that using pirate software is often a better user experience than using legitimate software - and this is where the industry should focus its efforts. The tide of music piracy is being pushed back, little by little, by initiatives like iTunes and eMusic. These offer the same products as the pirate networks, but with better quality, more user-friendly interfaces, added bonuses and a low price which is enough to entice many users away from pirate products and back to legitimate goods.

The videogames industry needs to learn from this, and fast - because the head-start which it has over music and movies due to the size and complexity of its products will not last long in the face of escalating network speeds.

It may stick in the craw of those used to seeing software pirates as hardened criminals who should be met with the full force of the law, but what the industry needs to do is to change its own business models so that it remains competitive in the face of freely available pirate software - and ensure that it is offering people a better experience than the pirates can.

This system of providing incentives to users is the precise opposite of what has happened up until now. So far the war on piracy has done nothing but inconvenience legitimate users, who have to navigate through extra layers of security in order to use their software while users of pirated software never experience this, since the hackers have stripped out such things.

The alternative to this is to stick rigidly to existing business models and petition the government for new powers to hunt down teenagers and students who are posting code and software to the Internet for free; an endless chase which can only end in a public outcry over what will be perceived as wasted police and governmental time, and unwarranted government protection of an archaic and broken business model.

The message here isn't negative, though; on the contrary, we firmly believe that this pressure on the industry's business model has the potential to force it to evolve and develop in fantastic, innovative and hugely profitable ways.

ELSPA's recognition that the landscape has changed is a vast step in the right direction - what the trade body must do now, in tandem with all of its members, is to acknowledge that the stick is no match for the circumstances in which it finds itself, and start exploring ways to apply the carrot instead.