And Of Course: Study Shows That Getting Rid Of DRM Reduces 'Piracy'

from the no-surprise-here dept

Wed, Oct 12th 2011 2:16pm — Mike Masnick

We've been noting for years that, contrary to the popular wisdom within much of the content industry, adding DRM to a product is not good for business. DRM restricts the legitimate buyer, thus making the product less valuable. When you take away value, it shouldn't be a surprise that fewer people are willing to buy. This seems obvious to some of us, but many companies still insist that DRM somehow increases sales. A new academic study has backed us up with empirical evidence that DRM hurts sales, and removing DRM actually tends to decrease infringement, because the product is more valuable to buy. Again, nothing in this research strikes us as that surprising, but we're wondering when the content industry will finally realize this basic fact about the counterproductive nature of DRM.

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Filed Under: drm, piracy, studies

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ScytheNoire, 12 Oct 2011 @ 2:28pm

Duh
Now try to get corporate suits and stockholders who know nothing about gaming to understand this concept, that when you make it more difficult for your paying customers, they are often forced to pirate just to get a working version of the product they purchased.
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anonymous, 12 Oct 2011 @ 2:30pm

about as much chance of this happening as finding an honest politician!
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A Dan (profile), 12 Oct 2011 @ 2:31pm

A simple case study
If anyone actually cares, just look at the situation with The Witcher (for PC) and its sequel. They have had great gamer response to their removal of the DRM, and it was actually a selling point for one of the online retailers during their launch of the sequel.

On an unrelated note, the "Hover to see video" is very annoying to me because I often move my mouse out of the text box to type. It popped up on me twice while writing the above comment.
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sehlat (profile), 12 Oct 2011 @ 2:36pm

DRM Sends A Very Simple Message
It's the equivalent of walking up to a counter and having the proprietor slap you across the face screaming "You're a thief and I'm going to stop you!"

After that, why bother buying anything from him?
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Anonymous Coward, 12 Oct 2011 @ 2:51pm

Re: Duh
I have a game I bought that the DRM wouldn't play nice with my computer. It now sits on my shelf while I play the same pirated version.
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Samuel Abram (profile), 12 Oct 2011 @ 2:53pm

Also in the article...
Here's what you would've seen if you read the article further:

The research also revealed that copyright owners don't necessarily benefit from a lower amount of piracy. "Decreased piracy doesn't guarantee increased profits," Purohit said. "In fact, our analysis demonstrates that under some conditions, one can observe lower levels of piracy and lower profits."

Tim O'Reilly said it best: The biggest challenge for the vast majority of artists and authors is not piracy, but obscurity.
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Anonymous Coward, 12 Oct 2011 @ 2:54pm

Re: DRM Sends A Very Simple Message
Yeah, or him walking around behind you checking your pockets every minute to make sure you still haven't stolen anything.
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Jeremy, 12 Oct 2011 @ 2:59pm

yup...
DRM is why i refuse to buy Ubisoft games, i used to buy them religiously. now i refuse to buy it and would rather pirate it so i can play whenever and how ever i want. Internet is out and cant play Battlefield, no problem lets play splinter cell or assassins creed (since its hacked)
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Karl (profile), 12 Oct 2011 @ 3:04pm

Yep
Professional musicians have known this for years. Ask anyone who ever bought the Waves VST plug-ins in the early 2000's. The iLock DRM in the software would often cause a Blue Screen of Death.

For pro studios, this phrase became SOP: "Buy the software, use the crack." You had to buy the software to stay on the right side of the law, but you had to use the cracked version because it was the only way the software would run reliably.

Amateurs, obviously, didn't have the "buy the software" requirement. I'm surprised Waves is still in business, frankly.
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out_of_the_blue, 12 Oct 2011 @ 3:06pm

NO, MIKE: "analytical modeling" NOT "empirical evidence"!
Damn, this one is either flat out lie or you plain don't read more than headlines. Missed as noted above on sales effect too.

I demand a correction. You are flatly wrong.
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Rabbit80, 12 Oct 2011 @ 3:14pm

Re: A simple case study
"On an unrelated note, the "Hover to see video" is very annoying to me because I often move my mouse out of the text box to type. It popped up on me twice while writing the above comment."

Adblock
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Allomancer (profile), 12 Oct 2011 @ 3:15pm

Might have jumped the gun a bit
I appreciate you bringing this study to our attention, but unfortunately, there's actually no "empirical evidence" of any kind in this study. Ars Technica did a much more in depth analysis of the study the other day, and it explains that this is actually just a model the researchers are using to predict likely behavior in the market. They didn't actually gather any data.

(link: http://arstechnica.com/tech-policy/news/2011/10/a-game-we-all-win-dumping-drm-can-increase-sales-whi le-reducing-piracy.ars)

Don't get me wrong, I'm not bashing the study, we just need to realize the limitations on what conclusions we can draw from it. Models are important, but they're only really useful to the extent that they help us explain the real world (ie, data). I hope someone does take this model and compares it to actual data, that will be the next step.
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Franklin G Ryzzo (profile), 12 Oct 2011 @ 3:16pm

Re: Also in the article...
An interesting and very valid point. If no one is downloading your game, movie, album, etc... then it means one of two things:

1. People simply don't know about it
2. It sucks

The first reason is normally the problem though because people will turn to file sharing if something isn't worth spending the money on because of its lack of quality. I think it becomes a morbid curiosity sometimes to see something that is actually that bad.
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BigKeithO (profile), 12 Oct 2011 @ 3:19pm

Re: NO, MIKE: "analytical modeling" NOT "empirical evidence"!
I demand tits or GTFO. You are flat.
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aguywhoneedstenbucks (profile), 12 Oct 2011 @ 3:23pm

Dear Pirate Mike
If you're going to spread this kind of disinformation and paint all DRM as bad with a broadbrush then I will be forced to stop coming to this website.
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Jeffrey Nonken (profile), 12 Oct 2011 @ 3:27pm

In my view it's not even a matter of whether it reduces infringement, though that's a good thing too. While (if I were a software manufacturer) it might infuriate me when people used unauthorized free copies, I think at the end of the day it what would be important to me is how many copies I've sold.

I mean, really, keeping people from infringement is simple: don't put the thing out on the market. Don't produce the goods and nobody will make unauthorized copies.

If that's your only criterion for success then, by all means, apply the ultimate DRM. Stop trying to produce products and LEAVE US ALONE. I promise nobody will "steal" what you don't create.

But you won't generate any income, either. And I thought that was the purpose of selling things?

If you're interested in profits, then it seems to me that if you remove DRM and your profits go up then it doesn't matter if infringement goes up too. It's tempting to see all that free profit out there and try to grab it, too, but it's not real. The economy only allows for so much on its budget and once you reach that any attempts to exceed it just cost more than they're worth. Forcing the issue just pisses people off. Push them and they'll push back.

Think of it another way: if you make your software easier to use it will steal sales from somebody else who makes his harder to use. Because given two otherwise approximately equal choices most people will choose the one that gives more reward for their energy. Fighting DRM does not qualify as rewarding.

And, oh yeah, infringement goes down too? Bonus!
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Samuel Abram (profile), 12 Oct 2011 @ 3:27pm

Re: Dear Pirate Mike
And that's bad for us how?

(assuming you're serious and not making fun of trolls)
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Richard (profile), 12 Oct 2011 @ 3:34pm

DRM purpose
The purpose of DRM is to create monopolistic lockins for the purveyors of DRM s/w or h/w.

The content guys are just the suckers in all this.
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aguywhoneedstenbucks (profile), 12 Oct 2011 @ 3:37pm

Re: Re: Dear Pirate Mike
You know what they say: When you assume, you make an ass out of you.
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AdamBv1 (profile), 12 Oct 2011 @ 3:55pm

Re: Also in the article...
Look at it this way though, they didn't have to pay to either develop or license any DRM so it should still be more money in their pockets.
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PRMan, 12 Oct 2011 @ 4:06pm

Re: Re: Duh
And what are the chances that you go through the hassle of trying to buy it next time?
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PRMan, 12 Oct 2011 @ 4:09pm

Re: Re: DRM Sends A Very Simple Message
This is like when I worked a job in retail long ago, there was a person who was a known thief. I walked around following her on every aisle "helping" her.

She finally said, if you're going to treat me like a thief (she was) then I'll just leave.

Ironically, I accidentally followed another customer (some random housewife) the same way one time and got the same response. You're right, DRM is just like that.
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Goyo, 12 Oct 2011 @ 4:15pm

Re: A simple case study
What "hover to see video"?
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Anonymous Coward, 12 Oct 2011 @ 5:29pm

I refuse to buy anything with DRM.

I've had plenty of first hand experience with DRM completely fucking up a computer. I will detail just one of those experiences below.

My sister loves The Sims. She bought the Sims2, and about 10 expansions. The Sims expansions contain Securom DRM. Securom installed itself in the space between the OS layer and the hardware(?) layer. Her computer had two disc drives. Both of which instantly became fubar'd. Neither of the disc drives would recognize or read ANY disc. Any disc what so, ever... that didn't contain Securom DRM. Both disc drives how ever, were capable of recognizing and reading any and every disc containing Securom disc check code. Well, that's convenient... or not.

Removing the CD burning and leaving the regular disc drive in, didn't fix it. Plugging one of my spare disc drives in, resulted in that drive becoming fubar'd too. So we tried a complete computer wipe, format, new OS. No dice, all 3 disc drives were essentially bricked. We had to purchase a new disc drive, and tell my sister "Sorry, but if you want a computer with a functioning disc drive, then you're not going to be playing the sims anymore."

They eventually got a new computer, and they turned the old computer into a dedicated "sims only" box.

I don't care if some DRM is less intrusive or less destructive than others. After all of the different messes I have been through with different DRMs, I refuse to accept any product containing DRM. I refuse to reward people (assholes) who treat paying costumers like thieves (shit).
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Gwiz (profile), 12 Oct 2011 @ 6:21pm

Re: NO, MIKE: "analytical modeling" NOT "empirical evidence"!
I demand a correction.

You demand???? Well hot damn, if we get to demand things then I want more stories with really fast car chases and midget clowns in them. All this legal/tech stuff gets pretty dry at times.
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Rekrul, 12 Oct 2011 @ 7:07pm

Re: A simple case study
On an unrelated note, the "Hover to see video" is very annoying to me because I often move my mouse out of the text box to type. It popped up on me twice while writing the above comment.

Try the MVP Hosts file. It redirects all advertising server requests to your own system, where they fail. It makes it impossible for any program on your system to connect to any advertising server on the list.

http://winhelp2002.mvps.org/hosts.htm
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Anonymous Coward, 12 Oct 2011 @ 7:09pm

The fact is, sometimes when I buy the game, I still have to download infringing copies because they don't allow me to install on a machine that has debugging related softwares (like Process Explorer which is very powerful and useful).

I'm a programmer that needs these tools to work, and because of the size of my room I can't afford to have a PC sole for the purpose of gaming. To play these game I have to find a source that have these DRM removed.

Just another reason why these "file sharing must be because people want things free" comments are lame.
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Rekrul, 12 Oct 2011 @ 7:13pm

I don't buy a lot of games, mostly older used games, or ones from closeout stores. However, when I do buy a game and install it, the first thing I look for after patching it to the latest version, is a NoCD patch so that I don't have to dig out the disc every time I want to play it.

I also refuse to buy any game that uses/used Starforce protection.
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Anonymous Coward, 12 Oct 2011 @ 7:44pm

Re: Duh
"they are often forced to pirate just to get a working version of the product they purchased"

No, wrong. Check for DRM before you purchase. Do not purchase at all unless there is either no DRM, or any DRM which is present has been comprehensively broken for years. The presence of DRM should act as a large red flag, which encourages you to look for alternatives. There are almost always good alternatives which do not contain DRM. However, the alternatives are often more difficult to find. Seek and ye shall find.

Resorting to pirated versions is dangerous. It opens you up to possible prosecution, you can do without that kind of threat in your life. Also, pirated versions can contain their own nasty surprises in the form of malware. Save yourself the anguish.
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AW (profile), 12 Oct 2011 @ 9:45pm

Re: NO, MIKE: "analytical modeling" NOT "empirical evidence"!
You realize that analytical modeling is the same method that RIAA, MPAA and the BSA go about tallying losses due to piracy correct? Also where does it say empirical evidence? Did the article change? Analytical modeling is also how they push the boundaries of science. You can disagree with the assumptions made but that doesn't make the headline a lie and the missed part actually refutes your point of view. It says lowered piracy decreases sales.
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AW (profile), 12 Oct 2011 @ 9:46pm

Re: Re: Re: Dear Pirate Mike
I love failed quotes.
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Allomancer (profile), 12 Oct 2011 @ 9:59pm

Re: Re: NO, MIKE: "analytical modeling" NOT "empirical evidence"!
This is from Mike's paragraph: "A new academic study has backed us up with empirical evidence that DRM hurts sales, and removing DRM actually tends to decrease infringement, because the product is more valuable to buy." So, yes, he does say it's empirical evidence, which it's not, but that doesn't mean it's worthless, just that more research is needed.
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CN, 12 Oct 2011 @ 10:30pm

DRM converted me to non-customer
I used to buy probably no less than a dozen games a year. As DRM got worse, and I had more and more issues with it, my purchasing slowed.

I had stuff that wouldn't run, often complaining that I had something like Process Explorer on my computer. (Is that some kind of crime?) I remember "Knights of the Old Republic" (pretty sure the first one), which had been running fine, suddenly refuse to run, allegedly because of Daemon Tools. Thing is, I didn't have Daemon Tools, nor had I even heard of it until then.

I had store bought DVD movies not play because (I think it must have been Windows Media Player at the time, it would have been six or seven years ago) because it thought they weren't legit. I was on an offshore oil rig for 3 weeks with a collection of movies I couldn't watch. Of course now the warning at the start of movies says if I buy a movie and watch it on an oil rig I am a dirty rotten thief. (It doesn't say anything about how many people watching, just where.)

Also on the rig, our DVD-R recorders have stopped, saying that we were attempting to copy copyrighted material, even though the video source was coming from our submarine (ROV).

Anyway, back to games... I have had several recent games in my hands, wanting to buy them. I read about the DRM contained on them, and said "No thanks!" and put them back. I may have "voted with my wallet", but nobody really sees my vote. They just think "sales were poor; damned pirates! We need even stronger DRM!"

Even old school DRM requiring the CD/DVD is a pain, though less so than much of what is out there today. Since I haven't been buying anything lately, I play mostly older games. I wanted to play "Age of Empires II - Age of Kings - The Conquerors". It was already installed on my computer. I managed to locate 2 AoE2-AoK CDs (yes two, I lost one and bought a second one, then found the first), but could not locate my Conqueror's disc. I know it is still around somewhere. I had to go get a no-CD crack, which could contain malware.

Working offshore, I am without an internet connection I can use for gaming, so any single player games that require the internet for DRM purposes are out too.

DRM HURTS CUSTOMERS. DRM MAKES CUSTOMERS DISAPPEAR.
I don't "pirate" games, but I still stopped being a customer because of DRM.
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Anonymous Coward, 12 Oct 2011 @ 11:21pm

Re: Re: Duh
Oh, yes, those giant yellow DRM stickers that they put on the packaging or product description should always guide your purchasing, yes indeedy!

Please. Don't forget that you or I might know to even think of such a thing as DRM. But too many people don't even know what DRM even means, let alone that it can at the very least fubar your gaming experience and at worst might fubar your computer function.
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Anonymous Coward, 12 Oct 2011 @ 11:30pm

Re: DRM converted me to non-customer
I don't "pirate" games, but I still stopped being a customer because of DRM.

Me too. We are actual, real, live, quantifiable lost sales.

Let's start a club! ;)
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Anonymous Coward, 12 Oct 2011 @ 11:37pm

Re:
That's the situation that initiated my boycott of all things EA. I watched that Securom mess unfold in real time. EA shat all over an insanely devoted fanbase and NEVER made it right. Ever.

Had they done the sane thing and patched Securom out of those games (and Mass Effect for PC, and Spore, and every other game they used it on starting April 2007), they would've been forgiven. But they didn't, and all they did was turn loyal customers into boycotters or pirates.

Or lawsuit filers, there were six launched against EA for Securom usage in several different games including TS2.
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CN, 13 Oct 2011 @ 12:53am

Re: Re: DRM converted me to non-customer
Me too. We are actual, real, live, quantifiable lost sales.

Let's start a club! ;)

There's probably a lot of us! It would be nice if we were more visible. A sale is easily counted. How do they count lost sales? If they could count us, or counted us the same way they count "pirates" (with giant made up numbers pulled out of their ass), maybe they would realize how much DRM does hurt them!!!

People developing DRM are creating things to NOT WORK. That's why I may be infuriated when things fail to work, but I am not surprised by it. The focus should be on making things work; there are enough things that don't work by accident, without spending time and effort to make things fail on purpose!
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Anonymous American, 13 Oct 2011 @ 5:10am

Re: Re: Re: DRM Sends A Very Simple Message
So, like every time I shop at Best Buy? There's a reason I don't go there any more...
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Anonymous Coward, 13 Oct 2011 @ 5:17am

Re: Re: Re: DRM converted me to non-customer
How do they count lost sales?

Apparently, every torrent download is a lost sale in RIAA/MPAA/whatever speak.

Now granted, it makes as much sense as everyone who's not caught speeding being considered a "lost ticket" by the cops, but that's the way it goes.
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A Dan (profile), 13 Oct 2011 @ 7:59am

Re: Re: A simple case study
I don't mind advertisements. I know they're a significant source of funding for the sites I visit, and I don't resent them. But sometimes certain types are particularly annoying.
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Anonymous Coward, 13 Oct 2011 @ 8:07am

Re: A simple case study
Video's not so bad - it's the sound that goes with it. Few things more annoying than unbidden sound from the computer - either into the headset or the open office.
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Anonymous Coward, 13 Oct 2011 @ 8:21am

Actually, there are a few things here:

If part of the piracy was people getting backup copies, then yes, "piracy" would drop - but the number of people obtaining the content illegally would not change.

If part of the mystique of obtaining the product is getting past the DRM, then remove the DRM would make it less desirable, and thus reduce piracy. It would suggest that some who downloaded the file before were not even really consuming the product, just downloading the file and forgetting about the content.

If the DRM makes it hard to "share" friend to friend, perhaps more people are driven to get the file online via pirate sites. It still doesn't change the number of people obtaining the content illegally.

In simpler terms, there is no indication of a reduction in consumption of material obtained illegally, only that the narrow metric of "illegal downloads" changes.

A != B.
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Machin Shin (profile), 13 Oct 2011 @ 8:43am

DRMs
The really funny thing is so many companies not realizing that the stupid DRM makes the pirated copy more attractive. A good example of this is with Windows XP. I went out and bought a copy and used it. Trouble was I constantly would run into issues of having to re-register because of upgrades to the computer. I then got tired of it and used a pirated copy. The end result? The pirated copy installed easier, included updates and had several patches made by the software pirates. The Pirated copy was more stable then the store bought copy. This seems to be happening all over with programs these days. The software pirates actually make the program more stable and sometimes even add features. Makes it hard to justify paying for the official version.
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ltlw0lf (profile), 13 Oct 2011 @ 9:32am

Re: Re: Duh
I have a game I bought that the DRM wouldn't play nice with my computer. It now sits on my shelf while I play the same pirated version.

Same here, except for the pirated part (well, ok, I did use software to strip the DRM off when I made an iso copy of the disk.) I've noticed that running the iso in VirtualBox, SafeDisk doesn't seem to complain any more about it.

I've been spending quite a bit of money re-buying games off of GOG just because I want to play the game, and because the company who originally sold me the game years ago decided that the game should only play on Windows95. For $5.95/$9.95, it is worth the added investment to re-buy the game once and have it work on any platform I want without the DRM. Just wish GOG had a bigger selection of old games though...I was buying stuff through Steam for the same reason, but Steam has their own issues with DRM (though, I've found their DRM to be far more palatable especially since I can still play in "off-line" mode without problems.)
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DinDaddy (profile), 13 Oct 2011 @ 9:36am

Re:
Indded. Pretty sure industry will be most moved by this part of the study:

The research also revealed that copyright owners don't necessarily benefit from a lower amount of piracy. "Decreased piracy doesn't guarantee increased profits," Purohit said. "In fact, our analysis demonstrates that under some conditions, one can observe lower levels of piracy and lower profits."
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Anonymous Coward, 13 Oct 2011 @ 10:02am

Re: Re: Re: Re: DRM Sends A Very Simple Message
Why would anybody go to a Best Buy? Even employees and the executives refuse go to Best Buy.
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John Fenderson (profile), 13 Oct 2011 @ 1:24pm

Re: Re: DRM converted me to non-customer
I've been a member for years.
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nasch (profile), 13 Oct 2011 @ 10:52pm

Re:
If part of the piracy was people getting backup copies, then yes, "piracy" would drop - but the number of people obtaining the content illegally would not change.

Fewer people would pirate and the same number would get it illegally? Well I am confused - how do you define piracy?

If part of the mystique of obtaining the product is getting past the DRM, then remove the DRM would make it less desirable, and thus reduce piracy.

Well yes, if you make stuff up, you can come to any conclusion you want.

In simpler terms, there is no indication of a reduction in consumption of material obtained illegally, only that the narrow metric of "illegal downloads" changes.

That's simpler terms? Um... less illegal downloading, but no reduction in consumption of material obtained illegally. So they're getting it by carrier pigeon now instead of by downloading? Again, confused about your point.

A != B.

Sometimes that is true, but in this equation you're drawing up what is A and what is B?
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Rabbit80, 14 Oct 2011 @ 8:17am

Re: Re: A simple case study
I spend most of my time working in remote desktop environments (or working on a crappy 1.2Ghz craptop). Video in adverts causes horrible slowdown for me so I use adblock to block them. I don't generally block text or still adverts though!
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out_of_the_blue, 17 Oct 2011 @ 7:02am

No correction yet, eh, Mike? -- I'll do it for you, then.
First off, just the title proves Mike blatantly wrong: "Removal of Restrictions Can Decrease Music Piracy, Study Suggests". -- A mere "study" and only "suggests".

2nd, "analytical modeling" is NOT "empirical evidence" as Mike wrote. -- Since Mike claims to have some college and should know the difference, it's just flat out lying to substitute those words.

3rd, '"Removal of these restrictions makes the product more convenient to use and intensifies competition with the traditional format (CDs), which has no DRM restrictions," Vernik said.' -- These dinosaurs are comparing their "analytical modeling" with CDs! No wonder it shows the results wanted!

4th, "In fact, our analysis demonstrates that under some conditions, one can observe lower levels of piracy and lower profits." -- SOME conditions. -- Left out is that SOME conditions must show higher piracy = lower profits, and lower piracy = higher profits. This is an "analytical modeling" not reality, so all that's done to impose "conditions" is changing some numbers in a computer: cherry-pick the results wanted, and voila! All "proved".

On the 12th, I demanded a correction in a CLEAR and inarguable point, knowing full well that Mike wouldn't. He's not only biased in his notions, but having to admit an error is more than his little ego can bear, especially when a frequent critic demands it. So, he had choice of ignoring plain facts and being wrong forever, or giving me a one-time minor victory. He chose wrong forever.

YOU ARE BLATANTLY LYING, MIKE! And I'm crowing again.
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'Pirate' of the North Sea, 8 Nov 2011 @ 3:40pm

Strip DRM to prevent the need for copyright infringement
A case in point: I purchased an official copy of Myst IV from Game a few years ago and it stopped installing after putting the second disc in. Thinking that the requirements were too high for my friend's laptop, I quit trying until I had my Windows 7 desktop. Same problem; stops installing after loading second disc into the disc drive. Now I've given up and have downloaded a pirated version. After all, I paid for a working copy of the game, and one working copy is what I possess.
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