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MP3's and Hacks are Good for Business

Boy am I going to get flack for this article.

After all, how on Earth can I possibly say that illegal hacks and mp3's are good for business? And whose business do I mean?

First off, let's discuss what hacks and mp3's are.

Hacks

When a program (usually shareware) is altered to render the time limit void, or falsely register or otherwise "trick" the program to think it's OK to run in full mode, it is said too be hacked. (Yes, there are other situations referred to as "hacking" but we will concentrate on this particular definition.) There are many different ways to do this; key generators, registration alteration, "brute force" or raw code alteration, etc. But the basic aim is to be able to use a program with all its features intact indefinitely without having to pay for it. The creators of the programs that this is happening to is calling this theft. People are using their programs that they have spent time and money creating, promoting, distributing, supporting, etc. for free. The companies are not getting compensated for their efforts.

Or are they?

Let's take a recent situation as an example.

I have heard about a particular HTML editing/web site management software program many years ago, and got curious about it. However, I was no where near able to afford their high price for the program, so I downloaded a trial version, and hacked into my Windows Registry to disable the 30-day time limit. I fell in love with that program and have used the illegal copy ever since.

A few years later, working with one of my clients, I told them the benefits of using this particular program. The software was perfect for their upcoming website project they hired me to work on.

The result? A $3,000+ purchase by my client.

Since I've used a non-supported version for quite some time, I was able to learn many things about the program that I would never have learned if I would've just tried it for 1 short month and never used it again. I am just too busy to spend 30 days learning what I can about another program that may or may not benefit me. These people would never have made such a purchase on a system that I had no idea how to work.

I am also planning in the near future to buy the full version myself, so I can enjoy the fringe benefits of having a supported version.

Let's recap: I downloaded (read, copied onto my hard drive) some software, not bothering the company, or stealing a CD, book and material in a box off the shelf of some retail establishment. I never bothered the company's support staff (since, obviously, hacked software is NOT supported.) I did not waste any of their employee's time nor did I steal currency from them. I took nothing except a copy of a program.

If I could not have hacked into the program, would I have bought a copy of it? No way. I never had the money to spend hundreds of dollars on one new program just to find out it isn't what I needed/wanted.

They did not lose a sale. They never would've had one from me in the first place. If I couldn't crack it. I would never have tried it.

However, thanks to my "extended trail period" version, they ended up one huge sale plus one regular sale they otherwise wouldn't have received. In the end, they won, because their software is fabulous. Not because they played hard ball.

Hacks also do something else; allows good programs to invade market space regardless of price. Many items have kept themselves out of potential customers' hands due to their prohibitively high cost. Many good products have actually brought about their own end simply because they were priced too high.

Microsoft Office 97 was a good office suite program, combining very competitive interlocking programs. The problem was that it was a few hundred dollars. Not the worst price for big companies, but much too expensive for the large, yet under financed, small business market.

Along comes recordable CDs and some people learn to create their own registration passwords and distribute them for less than half of the cost of "real" MS Office CDs. Small businesses bought these "illegal" copies like mad. This really helped Microsoft penetrate an important market that it would never had reached otherwise. The price for penetrating this market was not seeing a dime from the sales of those "illegal" copies.

NOTE: I am not talking about hacking a program and selling it for your own profit. That is a very unethical act and should remain illegal.

MP3

Without getting into the technical details, mp3 is a music format that can be highly compressed and still retain high quality sound. How compressed? Well a standard 650 Mb music CD contains around 18 songs at most. My personal record is 197 high quality mp3 songs on one CD.

This high compression ratio allows music to be a decent size to download over the internet. This allowed people to place entire CDs onto the net and for thousands to download them for free. In effect "stealing" copyrighted music in mass quantity.

If you get paid for every CD bought with your name on it and you found out that anyone anywhere could download your whole CD in an hours for free, how scared would you be?

My friend (I'll call him Jake) is a huge Kid Rock fan. Well, at least he is now.

He heard some of his songs through friends, but didn't want to waste his money getting his CD. So he downloaded a few mp3's to listen to. In fact, he ended up downloading his entire CD. Jake loves the songs. Every single one of them.

So did he buy the CD? No. He already had the songs available and any CD he got would've just been played in his home office where his computer is anyway.

However, Jake has gone to Kid Rock's concerts twice already and both times plunked down plenty of dough for t-shirts and memorabilia. (You do know that artists get a percentage of all concert ticket sales and licensed merchandise sold, right?)

Could Jake afford the CD? Of course, but didn't want to waste money on a CD. Of course the money he spent at the concerts were much more than the price of one compact disc.

Did Kid Rock lose out on a CD sale? Yes. Would Jake have gone to the concerts if he had bought the CD instead of doing the mp3's? Of course. can Kid Rock get over the slight drop in CD in exchange for increased concert sales? I hope so.

(Note: The famous rock group Metallica is will known for achieving their success in large part to kids passing around illegal copies of their cassette tapes. Word of mouth is truly the most powerful advertisement.)

Recent statistics have shown that, despite rumors, there is NO definable drop in CD sales due to the mp3 movement. In fact at the time of this article, the recording industry is experiencing record sales. More people are buying music then ever before.

I will go on record and say that mp3 is in fact contributing to increased record sales.

(Update 7-22-2000 - HA! According to surveys and reports, I was right.)

In conclusion

Is downloading mp3's and hacking software stealing? In the strictest sense, yes. Do companies lose money because of this? Absolutely. Do they gain money because of it? In many cases, yes. However on a strictly bookkeeping level it's much easier for the company accountants to calculate how much money is lost rather than how much they might gain due to "illegal market penetration".

So what are companies to do? If they say it's OK for these things to happen, this gives a green light to the hacking and mp3 industries and will allow them to grow to epic and highly disastrous proportions.

Software companies have no choice but to attack the hackers. Music companies and recording artists have to try to crack down on mp3 thievery. Hackers and mp3 downloaders will continue to try to get something for nothing and will reward the best software companies and recording artists with their loyalty.

In my opinion, there is no possible end to this dual situation in the foreseeable future. The fight will continue on all sides. White flags and peace treaties are not an option.

Do you disagree or agree with me?

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