The numbers are sobering. The Recording Industry Association of America (RIAA) claims piracy costs the U.S. recording industry hundreds of millions of dollars each year. And the International Federation of the Phonographic Industry claims illegal music duplication costs the industry $4.5 billion a year worldwide.
The Business Software Alliance (BSA), which represents most major computer software publishers, estimates that piracy cost the software industry $11 billion in lost revenues during 1998 alone. The Software & Information Industry Association recently conducted a survey that found that approximately 60 percent of the software distributed on Internet auction sites is counterfeited (an internal Micro soft study found the volume of auctioned fakes much higher, at 90 percent).
But is the potential economic bite as dire as the industry watchdogs contend? Many people think not.
"There are a lot of good arguments to be made for unpaid exposure to copyrighted works," says Julie E. Cohen, an associate professor at the Georgetown University Law Center. She compares " 'fair use' . . . sharing of copyrighted material" to word-of-mouth marketing. "It gives much broader exposure and can encourage [the unauthorized user] to buy the next version later."
And practically all of the supposed costs and lost revenues bemoaned by the RIAA and BSA aren't really lost, since by definition pirated music or software doesn't cost the original creators a dime: The pirates copy the material with their own duplication equipment and media.
Nobody has ever successfully demonstrated that people would uniformly pay for all the content and software they had received for free if pirated copies didn't exist. Indeed, the opposite seems to be true: Many people will install Photoshop from a friend's CD-ROM only because they can, not because the application is essential or even useful to them.
"I have tons of programs on my computer that I've never even launched," says one 30-something from Montana who asked not to be identified. "I figure I might want them someday, and a friend who got the stuff for work let me copy them for free."
What about the applications he uses often? "I'm willing to pay for the software so long as [the price is] not in the stratosphere," which he defines as more than $150.
Even that price may be out of reach for some consumers. "Particularly in some other countries where people can't afford American prices, it's not fair to say that every single one of those copies would have translated to a sale," Cohen says.