Hackers and Pirates

It was a good week for hackers and techno geeks as new broke that the iPhone has been cracked. A teenager broke the code that only allows the phone to work on AT&T's network (which the iPhone has an exclusive contract with.) I'm personally torn on the issue. I love sticking it to telecommunications companies because they are far worse monopolies than Microsoft in my book - at least there is the ability to enter the software world by anybody innovative whereas not just anybody can enter the telecommunications market because you have to have a massive infrastructure to start or pay to piggyback on someone else's. But on the other hand, if someone develops a cool toy that everyone wants, they have the right to sign an exclusive contract with another company in the hopes that millions of people will jump to that company to play with their new toy.

Also this week, an Australian web filter created by the government at a cost of $84 million was cracked. It took a teenager 30 minutes and still leaves an icon on the computer so parents believe the filter is still working. Let's see, you pit the minds of maybe a few hundred brilliant scientists against the hormones of millions of horny men, I'm going to bet on the men every time. Let's face it, web filters are nice for keeping your ten year old from stumbling across something he shouldn't, but they are never going to keep people from finding stuff that they want to find if they are determined.

And on the pirate front, a recent study claims that music piracy costs the industry $12.5 billion and 71,000 jobs are lost. Reading other people's comments on this were most amusing. First of all, the study did not assume that every song downloaded would have otherwise been bought, they assumed 65% of them would have been bought. I don't know what dark crevice they pulled this number out of. Basically, it means that if a teenager with limited income downloaded 100 albums for free, if he couldn't have pirated them, he would have purchased 65 of them. I don't think 100 albums is too large a number for a lot of teens and college students, but how many of them would have actually bought 65 of those albums otherwise? Buying 65 albums seems a bit high.

The second comment that appeared often on this article related to the fact that the music industry is producing junk that no one will pay for. There's likely a grain of truth to this but I don't buy the argument entirely. If it's crap, you're not going to waste your time on it, even if it's free. If it is good, you'll pay for it. Now, I will buy into the argument that many songs and albums are overpriced which has caused many to turn to pirating songs. But people are still willing to pay for good songs that are reasonably priced or itunes wouldn't have millions and millions of downloads.

And the third and probably most amusing set of comments had to do with the lost money and jobs this piracy causes. As many pointed out, it's not like this money simply disappears because it's not being spent on music. The $12.5 billion supposedly lost is spent on other stuff that wouldn't otherwise have been purchased and creates jobs in those areas. Sure, there might be a few less jobs in the music industry because of it, but there are more in the movie industry or a cell phone company because of this. Even if this money were being saved (which is fairly unlikely considering the average amount people have in savings today) if it is in the bank drawing interest, the bank uses that money to invest in the stock market, helping fund our publicly traded businesses.