What price this disk?

Despite the high profile of the Federation Against Software Theft, illicit copying of ST software remains rife. Neil Jackson and Steve Carey report on the extent of the problem and new approaches to solving it.

The advertisement, in the classified section of a well-known magazine, looked innocuous and contained nothing obviously illegal. "ST contacts desperately wanted," it read. "Definite 100% reply. Send games list." Checking the rest of the page showed nearly 50 similar ads, all with the same basic theme.

Innocent? Maybe. A letter, an SAE and a not altogether successful attempt to write like a 14 year old told a different story. The list was immense, but by no means untypical: hundreds of programs available for no more than you'd pay for public domain software. Only this wasn't PD, but cracked copies of everything from the very latest games — downloaded from bulletin boards, often before the games were even on sale — right up to DTP and CAD packages costing hundreds of pounds.

Facts and figures are of course virtually impossible to discover: it's an underground crime. I think we would probably sell three times as many games as we do if there were no piracy," estimates Domark boss Dominic Wheatley: others put that figure even higher. It is clearly a deeply rooted problem that is not about to go away.

Pirates fall into two main categories. The first category is the organised cracking team. Most are groups of seasoned hackers and crackers working together for long hours breaking protection systems, adding fake loading screens which name themselves as the authors, and the familiar scrolling messages. Some even go so far as to duplicate entire packages to be sold off as originals.

The second is the casual copier and swapper who passes hacked copies of games to friends in return for more of the same. These small-time pirates usually work from home, breaking into their latest ST games and perhaps adding an infinite lives mode, before taking the at copyable disk to his school or club. The disk is copied by friends, or swapped for another.

The two groups have differing motives. The casual types do it for fun or to save their pocket money, whereas the sole desire for the organised groups is to make money.

Despite their fundamental difference, however, the effect, and in some cases the operating methods, are the same. Both groups deprive the industry of its income, and both use various forms of deception to achieve their objectives (see box, "How pirates get away with it").

But if money isn't the sole motive, why don't such people put their creative energies into writing original programs, instead of ripping off other people's — fellow programmers' — work? Dominic Wheatley of Domark stresses the wasted intelligence and work of pirates and hackers: "If they have aspirations, they should not do it illegally, they should do it legally: come along and be published it you are that clever! Do not spend your time hacking — write your own. After all, it's not a difficult industry to get into."

Attempting to discover just why people do crack and copy software, ST FORMAT, by promising anonymity, was able to track down a man who termed himself an ex-hacker — but then, he would say that, wouldn't he? (By the way, most of the "interviews" you read in magazines with hackers and pirates are made up in the office: this one is genuine.)

Mr E, as he shall be known (Mystery — geddit?) first started pirating about six years ago as part of a small club, using the "Group Purchase" idea. "We justified it by declaring the software we bought as the property of the club, so it followed that we were entitled to copy it." E's involvement in what started out as a small-time operation is worrying, as this is precisely how many, and maybe even most, young hackers begin.

Once a group is formed there is a great deal of internal pressure to be the best hacker in the team. This can lead to more and more hacking, and often takes over as the main motivating factor. "It's an unbelievable challenge. That's the whole thing about software protection: if there's something there it's just got to be mastered. If someone else in the team is unable to crack the code and I can, then it's a wonderful feeling, a buzz. It's like doing a giant puzzle, a huge logic problem. If someone can be bothered to create a really difficult protection system, then it makes me all the more eager to try and take it all out."

But E claims that many pirates have other reasons for wanting to break protection. "Lots are out to get the software houses," he says. "They see publishers as yuppies, rich kids and fat cats, and are basically just jealous. There's a running battle, a rivalry between them. The worst thing a publisher can do is to hide a rude message to the hackers in the protection code. It's like waving a red flag at a bull — one hell of an incentive to pirates."

But Activision's head man in Europe, Rod Cousens, dismisses this fashionable argument. "it's nonsense. The real losers in this situation are the developers, the programmers, artists, musicians and designers who work so hard to bring you new and exciting games. This industry has lost a lot of creative talent, because they know they are not being properly rewarded when their works of art are being abused by pirates. Developers see the efforts of their last year instantly wasted, and as a result some cannot consider this a viable career any longer, and are lost to other industries."

The exodus of talent may seem an odd one to blame on the pirates. It revolves around the amount of money a publisher can put aside for developing a program, and that in turn is based on the projected revenue said program could generate. If the danger of piracy hitting sales is high it follows that publishing budgets are reduced. The ST suffers, like most computers, because of the lack of adequate protection that can be implemented. So if a large, well-organised software company like Activision estimates sales of about 15,000 copies of an ST game (generally regarded as a good quantity — but still tiny compared to the 250,000-plus STs in this country) then the development cost is worked out accordingly.

"Clearly that puts a constraining influence on the amount any developer working on a project can earn," explains Cousens. "We can't attract new talent unless we can guarantee sufficient reward for their work, so piracy also affects quality as well as price." Cousens believes that in some cases as much as £25,000 is being indirectly stolen from developers (and five times that from the publishers), on an ST version alone. In an industry where developers are dependent on future royalties from a product to keep their team or business afloat, that kind of loss cuts very deep indeed.

The software industry, says Cousens, is only making about half its expected turnover (not profit), on the ST overall. This is because the sales are decimated by piracy, at home and abroad. "We'd like to think that reducing the ST game retail price to £14.99 or £9.99 would increase sales to around 50,000," says Cousens. "But some have tried it, and found that the volume of sales does not increase significantly at all. 10-20,000 is good on the ST, so we shall be keeping the prices where they are until we know we can reach all the market directly. Piracy is keeping prices higher than necessary, and that keeps this industry a minority interest."

Yet, according to pirates, the majority of hackers are just out for a good time, and besides, investigating programs is the best way of increasing your knowledge of complex systems such as the ST. "I didn't set out to do any damage," asserts our Mr E: "just to test my brain and learn the ST as quickly as possible." That may be so. Yet the fact remains that copying and swapping games is costing someone a great deal of money. How can this be justified? "Most hackers don't have the time to distribute large amounts of cracked software, they're too busy hacking. But if a hacker gives a copy of a game to a friend, especially one who is not a programmer, then that's often the beginning of the pirate chain. These people don't understand the skill involved, either in the original creation, or the hacking job. They're the worst kind of people, the real philistines, especially if they make money out of it. Even I think they should be stopped."

But surely this doesn't make the original hacker any the less guilty? After all, the theft started with him. But E denies that piracy is theft. "Theft means to take an item from someone, so you can't call it that. Software isn't an object, it merely exists on one — the disk. If I give someone a disk, and it just happens to contain a game I've cracked, then it can't be termed theft, because I gave them the disk."

The sheer idiocy of this argument has done little to prevent its widespread currency as an argument in favour of copying. After all, on the same basis it's hard to see how electricity could constitute an item, and the entire concept of intellectual property and copyright — which protects songs and books, for example — depends on the notion that theft extends much further than mere physical objects.

And, of course, the law does not accept the cracker's argument either. Illegal distribution is specifically precluded under the criminal provisions of the new Copyright Act. Despite E's attempts to justify his actions, either he really has no idea of the extent of the damage he is causing, or he does not care.

The task of tracking the crackers and bringing them to justice falls to FAST (the Federation Against Software Theft), a non-profitmaking organisation funded by the software industry. The funding is done on a pro-rata basis, with the more modest companies paying less than industry giants like IBM. Its role is to uncover piracy and amass enough evidence to bring about a legal prosecution, assist software companies in formulating a case and provide them with legal advice. FAST is also charged with the task of publicising the anti-piracy cause, using adverts and leaflets, and providing helplines to enable the public to take an active (and anonymous) role in the hunt for pirates. The organisation gets information from magazines, from the software industry itself and from the general public.

A vast amount of piracy occurs in foreign territories, and makes its way over to the UK via networks. Malta, Germany, Sweden, Holland, Italy and Denmark all have major problems with piracy, and most have no organisations like FAST to clean up for them. Consequently FAST has become something of an international watchdog, and has very good contacts in Europe, the USA and even Saudi Arabia. "The first problem is the lack of legislation in some of these countries," says Bob Hay, the man in charge of FAST. "In Italy, there has been no copyright law covering software, and so the situation is literally out of control there. So much so that the US Government has threatened to take reciprocal action against the Italian industries by denying them Favoured Nation status, and therefore access to the US markets. In Italy the news vendors on the streets are the sellers of illegally copied software, and it's properly packaged, sometimes in compilations which make no reference to the original copyright owners."

As evidence, we were shown two copies of Afterburner on the ST. The disks are indistinguishable, the documentation has been incredibly well reproduced, and only tiny, but unmistakeable, tell-tale marks give away the fact that one is an illegal copy. The box artwork is exactly the same, in full colour, and even the promotional Afterburner sticker had been reproduced and placed in the box along with the disk. This is no casual, small-time copying operation. But Hay is optimistic. A new European Commission directive comes into effect soon requiring member governments to introduce legislation to deal with criminal breaches of copyright in the software market. When these are in place, FAST should become more effective.

As well as the low sales that result from piracy, there is also a "cost of prevention" effect too. Almost all ST software is protected in some way, and it costs. Cousens believes that interactive packaging is one way forward. This technique, pioneered by Infocom in adventure games, requires the disk user to possess all the original packaging, badges, leaflets and so on. But although this may be effective in keeping out the pirates, it also pushes up the cost of the game. This is not good news, not only because this hits sales, but also because high prices are an incentive to copy.

Currently, the most cost-effective defence against piracy is to use low-level disk technology to literally "encode the code" and tie the program up in knots, squeeze it out of all recognition, and generally make it as unreadable as possible to a hacker and his copy systems. The man most widely acclaimed in this field is a man ST FORMAT readers know: Rob Northen, creator of the disk format for the Cover Disk now nestling in your drive. He has also designed ST protection systems for almost all the UK's top publishers at one time or another. "Protection has to be changed, modified and constantly improved," Northen explains. "There's always going to be someone who can hack it out. I feel sad when I see so much effort spent on removing protection, when it could have been spent on more constructive tasks, such as writing new software." The real task is in making the protection as difficult as possible to find, let alone hack. This takes a great deal of time and cooperation between protectors, programmers and disk master-makers, and is therefore an expensive process. "If you can keep most of the hackers guessing for three months," Northen estimates, "there might be enough shelf-life in the game to make it pay for itself."

Zareh Johannes, programmer of Super Hang-On ST, has dealt with protection from all angles. He not only creates games, but uses little-known hardware tricks to protect them. "You cannot stop a hacker," he admits. "All I aim to do is stop copiers. If protection wasn't such a problem, then it would possible to play games from hard disks more easily, or multi-task them. But it's just too dangerous to leave any operating systems in place."

An important new player in the anti-piracy war is the rather grandly titled European Leisure Software Publishers Association, ELSPA. Last Christmas you may recall having seen a number of advertisements, all placed by ELSPA and claimed to be worth over £100,000. Now another campaign of similar scale is about to break: you're going to be seeing a good deal of Smithy, Mr Jones and company (see page 21).

The new campaign is aimed very much at what the computer industry calls the "young home user." Dominic Wheatley, the Dom in Domark, who is leading the ELSPA initiative, explains the thinking: "FAST have managed to clamp down on most of the commercial pirates — the chaps who have spun off thousands of disks, held them in warehouses and sold them all over the place. It has taken a while, but it is beginning to bite now. Where we have been less successful has been in preventing people from pirating from home, and I suppose small time pirates."

But aren't the new ads, well, just a little childish? "I think if one can appeal to the eight, nine, ten year olds and give them a sense of this thing being wrong, they will carry that through. I think it is pretty tough to try and tell a 15 or 16 year old who has been pirating games for three years that he is a naughty boy and he should stop it. I mean it might have an effect and you can try, but really and truly we should talk to the younger kids, who are impressionable and who want to be good, and they are not yet at a rebellious age where they have to go out and prove things.

"We need to get them before the age of 14, so they do actually believe as they grow up that it is a bad thing, a wicked thing to do."

So how do the ads work? "One is at the school, one is in a street market and one is in the changing room after football, when two kids are reading a magazine where there is a small ad offering tapes for sale. So each of these ads is showing them an absolute example of where they might find piracy so that they can become watchful in those areas." The kids depicted in these ads are not bespectacled, goody-goodies who sit at the front of the class.

The objective is also to put off street traders and schoolteachers - the latter group "very, very big pirates," according to Wheatley: "they encourage pirating among youngsters, people who put in small ads and so on."

Despite the obvious lack of subtlety of the campaign, Wheatley is optimistic. "If I was a market trader and I saw those ads, and saw that there was £1,000 on my head, I might think twice about being obvious about the thing. I might lower my profile, because I do not want some snotty-nosed kid coming up, looking at me, remembering the ad, going off and making a phone call that will result in a visit from the police. Good! We have achieved something immediately. As soon as they lower their profile, so they lower their business. And that is the objective of this campaign."

Are you angry yet? You should be. The tired old arguments — "Everybody does it," "I don't do it, so it doesn't affect me" — just don't wash anymore (and that's why they stink). High prices, delayed release dates, low quality: these are all symptoms of the disease. Piracy is theft, and in the long term the pirate is stealing from your pocket. We are all of us ST owners and games players, and we are all of us missing out on a world of excellent, cheap ST software.

Think twice before you accept that dodgy version of Degas, or writing a scrolly message to go in front of Midwinter. And then, don't do it. Instead, put your creative effort into original work of which you can be genuinely proud. Once you do, you'll understand even more clearly why everyone of any note connected with the ST — ST FORMAT, software houses and above all programmers — despise pirates.

If you're still not convinced, just consider for a moment the implications of two recent advances in computer technology, CD and consoles using cartridge software. Both formats, unlike the ST's disk-based software, are difficult if not impossible to pirate.

And ask yourself why software houses should bother to waste their effort on the ST, knowing that their sales could be much more effective on CD and console-based hardware. We are facing a future, in fact, in which the ST is considered too dangerous to write and sell games for...

How Pirates get away with it

One of the oldest forms of piracy is falsely thought not to be piracy. A group of users club together to buy a game which is then hacked and distributed around the group, arguing that the sale of the first disk would not have happened had it not been for the pooling of the group's resources. But it has been estimated that for every single disk sold, 10 pirate copies are made. If this figure is even anywhere near accurate — and statistics are notoriously difficult to come by on the subject — then "Group Purchase" does at least as much damage to the software industry as the commercially organised cracking teams.

Perhaps the most spectacular operation of all is the copy party. A relatively new invention, they involve large numbers of infamous hackers assembling at secret locations. Such copy parties were held late last year in the Netherlands, for example, and earlier this year on a small island off the coast of Denmark. Crackers are invited from all over Europe and spend an entire weekend cracking and copying software. At the Danish meeting, competitions were organised for cracking the largest number of programs, and prizes awarded to the winners. After the party, which offered bed and board to the pirates, the organisers and those who attended had amassed a huge collection of compressed, hacked and generally well dodgy software, ripe for distribution to users only too happy not to ask questions. Such a party could cost the software industry £1,000,000 in lost sales.

The scale of such operations means that the pirates have to be well-organised to prevent discovery. Distribution of vast amounts of software is something which won't go unnoticed, especially if conventional routes from country to country are used. Customs officials require import documents for goods, and software is no exception.

The result IS the use of telephone lines as a distribution channel. Using secret telephone numbers, modem links and bulletin boards, pirate networks can access a wide area using only one version of an illegal program. The recipient, who may be in another country, is then able to mass produce his own copies without arousing any unwanted interest from the port authorities.

This is potentially the most damaging operation, as it is hard to detect, and even harder to eradicate. The law enforcers have to be at least as able to hack into the networks as the hackers themselves. This takes time — enough time for the damage to be done. But it doesn't stop there. Some network operators include the telephone systems as further targets in their quest to make money. The fact that international computer to computer calls can cost a great deal of money has led to the invention and use of specially-made devices which prevent the call-metering systems from operating.

There is no copyright law

Contrary to popular belief, there is absolutely no automatic right in law to back up copyrighted software, even for archival purposes. Some publishers allow you to do it, others recommend it and some expressly prevent it. You have legal rights if disks are damaged or won't work, but these do not include copying unless the copyright owner states that you may, in writing.

A Universal Problem

There's a tendency to assume that games are the pirates' only object of desire, and there's no doubt that games are widely pirated. But serious software — graphics, DTP, programming languages, utilities — also fall victim to the thieves, as HiSoft's David Link is aware from bitter experience. "Yes, our products are pirated — and fairly heavily, I suspect." But his problem is that he cannot take the simple step of protecting disks: the user of a language or a utility simply won't stand for it. "The way we try and minimise the problem of piracy," he explains. "is by providing high quality manuals and upgrades. We make sure that each copy of the software bears a unique serial number, so that only those people that register are entitled to upgrades and technical support. So we encourage people to register officially to get all those extras: we're adding value to the software."

Link finds that he does not need to go looking for evidence of piracy. It comes to him. "People ring us up saying, 'Did you know the company I just left has 20 pirate copies of Devpac ST?' Or, 'My mate next door (who I've just fallen out with and I want to beat up) has a pirate copy of Devpac ST.'"

HiSoft have evidence too of the kind of blatant mass piracy that occurs overseas and which, in the absence of tough legislation, is virtually impossible to control. "It was a company called Ofites in the north of Spain, San Sebastian, about 18 months ago. We licensed software for sale to them — and they then promptly disappeared! We couldn't contact them, and then a customer in Spain sent us a Spanish copy of the program with the Ofites logo all over it which he'd bought in a store! We never received any royalties, and we never managed to trace them. They were selling it in fairly large quantities in stores in Spain. If they still exist, by the way, we'd like to track them down!"

A company in Italy licensed Devpac ST and never paid HiSoft a lira in royalties. "Those sort of things are very difficult without using expensive solicitors," Link sighs. As to how much such losses might amount to, Link can only guess: "I suspect in Italy we must have potential sales for Devpac of quite a few thousand, at a licence figure of anything between £2-£10 perhaps, so it's thousands of pounds it's costing us. It's not hundreds of thousands, though if you look at the total number of household products that are not bought from us in the world it could be up to five figures."

And as Link points out, the only way a company can keep going is by selling software: it's no good people using what they have not paid for. "For our sort of software it's not as big a problem, because most people, if they are going to use it seriously, want to come back to us, for a new manual, an upgrade, support or whatever."

What you can do

It you know anything about piracy, and in particular about an organisation from the Netherlands known as QUARTEX, let FAST know (071-497-8973 — their helpline for the Entertainment and Leisure Software Publishers Association, ELSPA). Or write and tell them: FAST, 132 Long Acre, London WC2E 9AH. Remember too there's a £1,000 reward for information leading to a prosecution and conviction!

This article was originally published in ST Format issue 11 from June 1990 on pages 16-22.