I've always wondered what the measurable effect is of piracy on software sales.

For example; What happened to the Steinberg sales number for the unpirated Cubase 4 in comparison to the heavily pirated SX3?

Did they go up, down or remained the same?.

There is no way that I know of to predict what would have been sold if there were not kracked versions around...it is only ever a guess. With hardware, at least there is a reasonable assumption that every unit in use generated some revenue for the manufacturer....

When a new version comes out, legitimate sales go up. There is always a lag time between the new release and the hack...sometimes longer then others depending on the CP scheme used.

So that is the long winded way of saying " I Don't know "

Michael

Still, thanks for that reply.
Maybe I should generalize the question a bit:

Do the costs of anti-piracy measures weigh up to the benefits?

And aren't these costs in a way being paid by legitimate customers?

i know in the graphic design world piracy is also rampant, but many of the students who learn to use a program on a "kracked" copy, go on to get jobs working for reputable companies who pay to make those experienced users legitimate license holders.
i imagine the conversion rate is much lower in pro audio.

In general the costs are not something that the customers could detect.The costs in relation to the prices you pay for your software is rather trivial. Do you worry about credit card clearing costs associated with your product, or the fees to move box inventory around?

As you may or may not be aware, PACE offers serial number, software activation and iLok licensing method. These methods can used in many different ways. The iLok is not required unless a software publisher requires it.

Over the years many software publishers have found the iLok to be a method that offers their paying customers the greatest flexibility in how they use their licenses. In addition, many customers have chosen iLok even when software licensing options are available.

It is up to us at PACE to continue to improve the experience and offer benefits for the end user. We welcome suggestions and dialog with the community.

I wonder that too.

[QUOTE=PACE Andrew Kirk;4198959]In general the costs are not something that the customers could detect.The costs in relation to the prices you pay for your software is rather trivial. Do you worry about credit card clearing costs associated with your product, or the fees to move box inventory around?

I think that this topic could be fleshed out a bit....while it is true that the actually cost of CP is a small percentage of the overall cost of the retail sale of a product, the cost of CP goes much deeper. Copy Protection can cost customer goodwill when it goes bad. The required intracacies of secure software protection can cause problems with some customers computers....certainly rare, but it happens. It costs the software developer money for tech support instances that had nothing to do with the product itself.
So we have to balance the real cost of CP with the unquantifiable but very real difference in revenue.
The need for copy protection costs the customers as well as the software developer. It costs more then money...it costs innovation...

I was the UK distributor for Steinberg at the time the copy protection for SX3 was broken - it's difficult to say exactly, as SX3 had been out for some time, but the sales rate did slow down markedly when this happened.

We also saw a difference in the longer term sales of other soft synths we sold - those without copy protection would drop right down after a while, but those (from the same manufacturer) that did have protection were less affected by this trend.

Steve

Agreed, it is very difficult to measure accurately, although I'd expect that there were Cubase 4 and Cubase 5 customers who bought a version (including the lower-priced ones) who wouldn't have normally. And I think that the effect of this conversion becomes more marked over time, when the new products offer new capabilities that people are worth paying for that their aging pirated versions don't. So having a functioning (knock on wood) uncracked copy protection technology is definitely helping in the long run.

Angus
Steinberg

Short answer: YES! It is unreasonable to think that consumers do not consider EVERY facet of their purchase. The fact remains that, regardless of the manufacturing costs, that is built into the price to the end client. And, to your first statement, the difference between $500 and $475 is something that I can "detect". The real question is whether or not I find it ACCEPTABLE.


I can appreciate that you represent PACE and that you endorse them. But it is your last comment that was your saving grace. Of course publishers will make the best decision BASED ON THE CHOICES THEY ARE PRESENTED. I simply have a problem with the choices! IMO, the iLok is much too large for any laptop operator. I refuse to believe that PACE can't reduce the form factor by at least 50%.

To be clear, I have faithfully supported (pay for!) my copies of Logic since the days of Notator/Creator. Without significant copy protection, the Logic Studio package STILL gets my money because I think it is a stellar product. I believe that most professionals will purchase their software. Conversely, the majority of hobbyists won't buy the protected software if another tool is available; ie cracked. As a business development professional, I find it hard to believe that companies like Steinberg can't find a way to (reasonably) quantify what the effect to P and L has been/is.


Peace,
PWG

As a customer, I would chose a company that uses copyright protection over one that does not. I feel this saves me money as a customer since there is less need to raise prices to compensate for theft. Much like how insurance companies have to raise rates to compensate for fraud, or stores have to raise prices to compensate for theft. I feel a company offering copy protection has my best interest at hand.

I also personally will always take ilok over traditional protection. I always get frustrated with other methods because I end up having to worry how many tiems I can reinstall the software or use it in other locations, etc.

One can argue that it's inconvenient to get scanned at airports, or have to provide ID in places, or have to show my reciept leaving some stores. But I feel these things ultimately protect me so I don't have to be the one paying for the theives. I think the blame for these measures should be put on the theives, not the people trying to protect themselves and me as a customer.

At the end of last year, I purchased my first set of plug-ins that required iLok from "the" best known plug-in company. While I am generally happy with the plug-ins, even very happy with a few of them, I can tell you that if I knew then what I know now about what a total PITA the iLok authorization process was, there is NO WAY I would have purchased those plugs or any that required iLok. I would absolutely limit my purchases to plugs that had challenge/response or other simpler authorization methods.

If I ever have to start over or build another system, I will avoid iLok like the plague unless it is simplified by an order of magnitude. So, if you indeed welcome suggestions, mine is that you must simplify the process and eliminate 1/2 or more of the steps. My DAW is NOT on the internet (frankly I don't know why anyone would have their DAW on the net) and the process is terrible.

As a business development professional, I find it hard to believe that companies like Steinberg can't find a way to (reasonably) quantify what the effect to P and L has been/is.


The challenge is in being able to determine how many people who use a kracked version would actually have purchased the product...

if you assume a 1-1 Ratio, then how do you determine how many kracked versions are in use?

To know the exact effect of piracy on the sales of a given software product, one needs the participation and honesty of ALL the legit and ALL the cracked users of that software product. Anything else would be an educated guess reached through the use of sampling and statistics.

Nonetheless, sampling is the only practical way to answer such questions. However, to add integrity to the data collected, the researching organization must conduct similar studies for several years in order to compare data, analyze trends, and take other factors such as the state of the economy into account. Plus, this information has to be collected globally and not just for one country.

In the last quarter of 2008, IMSTA deployed its “Let’s Talk Piracy” survey on a global level and will continue to do the same annually. Over the next several years, IMSTA will be able to fine-tune the survey and use collected data to answer many of the questions that are lingering around the subject of software piracy.

Paul

My position is that assumptions are not necessary. There are a variety of forums/platforms by which users (pirates and non-pirates) can be polled in a way that doesn't supersede their fifth amendment rights. Quantifying that kind of information is, IMO, a necessary benchmark to determine REAL market pricing and releasing the product in a manner consistent with the CONSUMER desires. (That goes back to my earlier point about choosing from the selections presented.)

I think many software developers would be surprised at how reasonable consumers are IF they believe they are receiving adequate value for money spent. I don't use Cubase/Nuendo. However, I can estimate a reasonable market value based on the USEFULNESS and FEATURES of the product. Of course, R&D is a factor as well. But to summarily "adjust" prices on a phantom loss of revenue is tantamount to preemptive war.

The questions any business should be asking are fairly simple:
1. Does the customer perceive our product as having real value? Why/why not?
2. Is the product "right priced"? (That doesn't mean MARKET competitive. Analogy: Gas prices were SKYROCKETING everywhere, but NONE of them were in true alignment with the production costs.)
3. Is gaining/retaining market share more important than a loyal, niche customer base? (That should have been define in the company mission statement.)

Those three questions will speak VOLUMES as to how any company/corporation addresses it's (potential) market and customer feedback. It ain't rocket science; there are clever ways to avoid cumbersome dongles and internet connectivity requirements for protecting your intellectual property. Hey - if I can do banking with my mobile phone, I should sure as heck should be able to validate a software application or plug-in! Make it smart, make it slick, and make it THE WAY THE CUSTOMER (remember us?!) WANTS IT!

Peace,
PWG

KenM (MatsonMusicBox),
I would welcome to know more about your experience. You can post here. It sounds like you have a problem with the implementation made by the software publisher. You can write to be directly if you wish by posting to iLok.com a support incident <[email protected]>. We have over 85 vendors in this market that use iLok. Some also provide non-iLok activation using our tools. Most of these publishers distribute trial versions and full licenses via iLok.com. Customers can login, click to see what licenses they have, load them to their iLok and organize their licenses. I see the numbers daily of usage of this system. We take our support seriously and work to improve our systems.

The DAW itself need not be used - one of the main reasons we developed iLok.com in the first place. The moving of licenses to and from the iLok is independent of the use of the DAW and the internet. Many studios access from the front office. The iLok is not a USB flash drive, so it cannot possibly carry any kind of virus.

Most publishers have worked hard to improve the use of our technology and the steps for their customers. We continue to work to make it very simple for users to get activated. Some users are very advanced, with many iloks and many licenses. Others have one iLok and one product. We are working to make the experience easier for everyone.

I would welcome specifics about the publisher you are referencing. Was the activation inline?

What specific problem did you have with the iLok or iLok.com? Many people like the portability and convenience of the iLok. It gives them independence from C/R rules or the pain of contacting many companies in many time zones to re-activate each time you upgrade your system.

Thanks for the reply ... the following is copied from another forum I posted at the time I did it ...

So my Waves bundles came in and I was all excited to get them installed and play with them .... didn't know it would take half a day to do it thanks to piracy paranoia and iLok.

As a software developer, I appreciate the need for security and license protection, but there has got to be a better way! Here's the PITA I went through on this.

1. Ordered Waves bundles from Sweetwater along with this iLok thing I apparently needed. They sent my serial numbers and instructions for iLok usage/authorization.
2. While waiting for the actual package, I went ahead and clicked the links to go "Register" the waves bundles - this required me to create an account at waves - no biggie, probably want one anyway, so I do. Registration goes smoothly enough.
3. Now Waves want to "Send" my registrations to my "iLok account" ... OK .... I don't have an iLok account ... so I go there and create one ... fill out same tedious information .. .again.
4. Go back to waves and "send" the registrations - indeed they show up in my iLok account after a few minutes ... cool ... but alas, I have no "registered iLok device" ... so I wait for FedEx
5. Package arrives, I open iLok, plug it in to "Register it" ... but ... I have no "iLok client helper" software installed, so I have to download that to install it.
6. But ... my office computer is my work computer, and I (re)learn via a nasty dialog that I can't install software on it because I don't have "administrative privileges" Arggghhhhhh!
7. So - I kick the kid off the home computer - download the "helper app" there and install it, put in the iLok, but ... I have to now download and install a driver for the iLok!!!!
8. Finally - I get the driver installed - go back to iLok web site and am able to "download" the authorizations onto the thing - a process itself that seemed inordinately long and confusing - but it worked.
9. Now I'm off to the basement studio with my locked and loaded iLok to install waves.
10. Let me interject here - Waves has the nicest software boxes and CD packages I have ever seen! No wonder it costs an arm and a leg - they have $100 in the darn package LOL!
11. I install Waves - more or less smoothly, though it seemed to ignore where I told it to go and installed in its default directory - but it installed.
12. Now I plug in iLock and ..... no driver! This despite the fact that it says "most software packages that need it will install it when they install themselves" - I have to go back upstairs and get a standalone driver installer from iLok and go back downstairs and install that.
13. Do so ... and it works ... takes me a bit to point SONAR at the "right" waves directory - but get there and it all works ... yeah!

My point here is that I didn't really have anything go "wrong" and yet this was a huge pain in the rear - there has got to be an easier way. At least I think the next iLok bound software I buy will be much easier .... I think.

Well ... I bought another Waves package (JJP) a few weeks later, and to my dismay, it was even harder as I had to have some other piece of software to get the keys on the iLok for it as the "normal" method was not supported for that plug-in .... sorry, I don't remember the specifics here other than it took downloading and installing some separate piece of software.

Again - thanks for replying ....

At the end of last year, I upgraded to EW Platinum Orchestra. I have been a many year supporter of EW and I own many of their libraries among those of many other outfits. I remember when EW (Doug) had a thread going on their site a couple years back re going to ilok cp. I protested then that it was unfair to make long time supporters jump through new hoops and that if they went to ilok, I could not continue to support the company. Well, with that said, I still very much wanted the Platinum plus orchestra when I could afford it so I bit the bullet and I bought it for my new machine which I had built at the same time.

All those ilok registrations for all those various libraries. That's just crazy man. Anyway, I was able to get the library authorized (or at least it appeared to be) but there was a major glitch. I have had a long time ilok account because I also own a Muse receptor which requires it's own ilok. But for some inexplicable reason my account does not now show the EW platinum libraries as authorized but it does still show the one for the Receptor. The one time and only one time I ran the platinum libraries (last january), it accepted the ilok authorization. I remember I called ilok and was told that they did not have a answer for how it could be that my account did not show show my new Platinum library. Have you guys experienced any other users with this problem and what the heck can I do to make my ilok account show my EW Platinum Play library.

Sounds like you guys have work to do on that first part before you knock on wood.

I have several ilok plugs and the installation of all of them was painless and quite quick - at least as easy as challenge response - I use a tower which makes the ilok fairly invisible to the end user, but I could see it being a real drag for laptop guys....

I'm liking the iLok so far. No troubles and the process is pretty much dead simple. I think the issues surrounding lost/ stolen iLoks is glossed over though, probably because it's a tough subject. Nonetheless it should be addressed to the satisfaction of the installed user base that spend thousands and then have to spend more to try to insure the dang thing.

In the business world it's called externalizing risk. Basically meaning you're on your own. That is NOT cool!

I also think the iLok could be a bit smaller but that's a niggle.

Sorry, but all these steps were to be made for iLok ONCE.

Next time you purchase iLok plugs it all will be reduced to:

1. register product
2. load iLok key into iLok
3. install software

Done.

See it this way. When you first use your DAW program, you have to go through a lot of configuration too. After thats done once everything works well. At least it should.

Exactly what I HATE about dongles. I always worry about it getting damaged or walking off. Too bad more companies don't just lower the cost of their software and get rid of the darn things altogether. I think it'd lessen the incentive to steal and result in higher sales for software developers.

Hi Animus,
Of course what I meant was that the copy protection works in that the current generation has not been succesfully emulated or otherwise bypassed.
Cheers,
Angus

using audiowarez when i was a studient lead me to spend more than 50000 €uros in audio software and hardware (because since i have a job i can afford them).

without them, and like many "home producer" i don't spend any euros in this market.

the main point of view here is : how many software editors crush down due to piracy ?

my point is : how many software editors are here today because of the so many studients that use audiowarez in the early 90's and buy their softwares today ?

here is to me the mesurable (and positive) effect of piracy.

you can kill me now

Well ... I'm sorry ... but I don't think I should EVER have to download and install new applications, drivers, etc. and set-up multiple internet accounts just to get security to work. It's ridiculous. And as I pointed out, it was NOT just the first time - the 2nd set of plugs was equally bad if not worse.

I wonder if Waves and others have ever tried to weigh the cost of piracy vs the cost of lost sales due to draconian security measures? I am not "pro piracy" by any stretch, it is wrong by any standard. However, I seriously doubt that much actual revenue is lost by it, because I really do believe that in most cases, the pirates would NOT purchase anyway it if they could not get it free. If I were Waves, I would look toward increasing my revenue with the increased goodwill of a simple licensing method and spend my "anti piracy" budget in other ways whether that be education, criminal pursuit. whatever. Heck just pay people to anonymously turn in people they know are cheating. It would be cheaper and much more effective.

I don't think I have ever had to spend more than 10 minutes installing any software with ilok. And after the first tiem, maybe a couple of seconds just to authorize with the ilok. I have to spend far more time with the challenge-response installs. And then you have to worry about how many times you can reinstall it until your software is no longer usable and you ave to buy a new copy or call in and make special arrangements. Ilok solves all those problems.

I think part of one person's problem is trying to do everything on 2 computers and run back and forth. Of course that's coing to be a pain. But not because of the protection, but because it's not designed with the intent of someone running back and forth between two computers to register stuff. Take that out of the equation and you're looking at a couple of minutes getting set up.

As for someone suggesting to lower the prices and do away with protction? That's an oxy moron. That protection is to keep the prices down. If they get rid of the protection, then the piracy goes up and they have to charge more money to stay in business. I would be suspicious before making any purchase with a company that uses no copy protection. I see the protection as a sign that the company is looking out for its users.

I just wish all of the software companies offered a choice of ilok type device or challange-response so I wouldn't havea to deal with the challange and response issues which can be a major road block, and those who don't like the dongles can have their challange response.

I DETEST iLok.

I, like several, was forced into getting one for the use of Pro Tools and other plugins.

I found the process of loading them to be annoying. The first times, there were errors, and my licenses dissappeared from my account. I was pretty pissed about this, especially since there's some kind of ridiculous charge to get issued new ones!

Luckily, I didn't end up paying anything because, amidst all the errors and sync issues reported (along with license dissapearances), the keys made it onto the iLok.

I absolutely think it is ridiculous to have "iLok insurance" - talk about money grab. Why should I have to pay ANYTHING if your product breaks and I lose my licenses? That makes no sense.

We're not talking about a car here, that breaks, you first of all have a warranty for a few years, and then you replace tangible things. But in the iLok case, there is no such warranty, and you are paying to replace things that cost NOBODY money. Its very much free and fast to move licenses around.

In my opinion, I would approve of the iLok if they didn't resort to making you pay for something which damn well should be free. Adding keys/licenses is annoying, but about equal to any other protection beyond entering just a serial number or something.

In my opinion, all of this stuff penalizes the loyal customers who support the company - often times to the point of losing sales, all in the interest to save sales they probably would never have made to begin with.

What about logic pro....
When apple dropped the dongle...
I know a small trader in my town, he used to sell about 40-50 updates for logic....
He sold about 5-10 afterwards..
Now every musician I know has it...no one bought it afaik....
Exept the pros...
Maybe that could be a good software to measure the drop of sales....
Well apple still has a dongle...but now it has a prozessor built in

This is circular logic and that is exactly what is being contended.

I was expecting Angus Baigent to tell us that Steinberg saw a dramatic increase in sales for C4 and C5 as it has uncracked copy protection. His answers hints at there not being any dramatic sales increase (or any at all).

Or looking out for their Christmas bonuses... Do you believe that Cakewalk sell less copies of Sonar than Steinberg do of Cubase? Sonar only has a very easy serial code protection scheme. No dongle and no challenge response.

Logic is harder to compare to as Apple dramatically dropped the pricing and bundled all their pro audio tools into one "cheap" product.

Many users on the Sonar forum explicitely say that they use Sonar because Cakewalk trusts it's customers and does not have draconian copy protection (including quite a few disgruntled Steinberg customers). In this case the easy copy protection increases sales for Cakewalk.

I guess it depends on the point of view of the customer. For people like you the strong Copy Protection is a bonus. For others it is a negative. For me personally it is a bonus if it really works and is uncrackable otherwise it is a huge negative.

Alistair