A question of piracy

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This effect diminishes with price, and varies according to the exclusiveness of the product and the size of its potential market. Pirates are more likely to reproduce a Rolex watch than a Timex.

As is the case with music, the ubiquity of the Internet, peer-to-peer, downloading, piracy and indiscrimate copying massively expand the potential market for some products, but doesn't tackle the problem of ownership.

Not drowning, but waving

Questions of ownership of innovative and creative work lie at the heart of the perennial debate about the pros and cons of the Internet.

At first glance the issues are simple. The films, songs, software, texts and images that are casually downloaded from the Internet belong to somebody, "and should be paid for". Everywhere there are countless casual infringements of copyright by people using the web as a free information exchange, swapping music, software, knitting patterns, photographs and texts that are all protected by existing copyright law. They are breaking the law, often without knowing they are, because they can, and because they do.

Claudio Prado, digital policy coordinator for the Brazilian Ministry of Culture, put it succinctly when he expressed the view that intellectual property law is a 20th-century idea and "most of the blossoming of world civilisation has happened perfectly well without it - The 20th century is a cul-de-sac," he says. "And the engine of progress doesn't have a reverse gear, so it's hard for the first world to get out of the cul-de-sac."

DRM doesn't work – something even Apple seems to have realised with iTunes. Criminalisation of music consumers hasn't worked. Like the printing press, web and mobile technologies have revolutionised the cultural expectations of consumers – and the problem for creators is how to respond to the new realities.

Something free can’t be stolen

Like the music world, the software industry faces a challenge to its business model. In the case of the software industry, the challenge comes in the form of free and open source software. Free software negates the first premise of piracy. It is legal to share, copy, amend and sell the software. And it works. Free software is becoming the norm in many industries, and in many parts of the world.

Free is hard to compete with. The revenues may not be so great, but the costs are less, and companies built on free software development models have made significant returns – Cygnus, the original free software company, was sold for $687 million (£472 million), and MySQL was sold to Sun for $1 billion.

Even Microsoft is making tentative steps towards open source software, which may be tacit recognition of an inevitable future.

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