Written by David Tebbutt, MicroScope 05/83 item 01 - scanned
THE SOFTWARE RENTAL RISKS (column)
Have you seen all the fuss in the papers recently about an outfit that rents software? Bill Cannings, the man who opened Britain's first computer store - is the managing director of the company which allows people to try out software before purchasing it. The scheme invites people to pay the full price of a software product before taking it away and, provided it is returned in good condition within six months, 80 percent of the purchase price can be put towards other software offered by the company. Of course, the user forfeits the full price if (s)he keeps the program for more than six months.
Some software publishers are understandably getting upset about this development since it will inevitably diminish their markets. Of these, the people who seem to be getting most agitated are the producers of computer games. The parallels drawn by MicroScope (7 April) between this operation and video rentals are absolutely valid. Computer games, like films, have a short life. Not many people want to watch a film more than three or four times. Computer games hold the attention for longer but most become tiresome after a month or two. No doubt this is what inspired Cannings and company to set up the rental scheme. For the punter it's great news - five programs for the price of one. This assumes that the punters are honest and don't rip off the programs for their friends. Sadly, I think that this is very likely to happen so the poor old publisher loses out many times over. He sells a program once, it is loaned to a number of people, some of whom will make copies.
Most people know that I earn my living by publishing software, yet I am astonished at how many freely admit to me that they 'borrow' copies of programs to see if they're any good. Did I say 'borrow'? 'Steal' would be a more accurate description. Because it is so easy to do and because the 'stolen' information is obtained with the 'owner's' permission, no-one feels the slightest twinge of guilt about it. A bunch of local kids told me that they split the cost of software between them because this is the only way that they can afford to buy programs.
Unlike most business programs, games require little documentation. This makes life even easier for the pirates. Compare the recent advent of the domestic music centre and twin cassette deck which enables anyone to copy any recording.
It seems to me that games publishers, who have already been exposed to widespread piracy, are now being exposed to further erosion of their business. Somehow, the publishers will need either to stimulate a desire for ownership of the original version of a product or they will have to create a massive initial demand for each new game. If this was coupled with widespread availability, people might buy rather than wait for the rental companies to get a copy. If the demand generated is sufficiently high, rental companies would not be able to cope without wrecking their cash flow.
Since some publishers have already taken legal action to try to curb Bill Cannings, I guess I can't pass comment on their chances of success. I can't help wondering what chance Black and Decker would have if it tried to take my local tool hire company to court. Getting a slice of the rental income would similarly pose a bit of a problem. Another mischievous thought that I can't shake out of my head is the possibility that public libraries will start lending software. Then what?
Games publishers have every reason to be alarmed by software loan schemes because interest in their products is essentially shortlived anyway. I suspect that business software publishers may take a slightly different view. If someone decides to use a business program then they're going to use it for more than six months and this means that the publisher would be making a large number of sales through the scheme. The problem of theft remains but this is complicated by the need to photocopy manuals and the inability to obtain support from the original supplier.
An interesting ratio in the business package game is that the value of the information managed by a package swiftly exceeds the cost of the package itself. If anything goes wrong, and it needn't be with the package, the user stands to bear not only the cost of the information lost but also any consequential loss which, in some cases, could mean going broke. A friendly software supplier at such a crucial time can quite often rescue what may appear to be a disaster.
Software publishers will need to make sure that rental companies can support the package users both during the rental period and following purchase. If they're not up to it then they're best left alone, otherwise publishers will find themselves giving a whole package worth of support to each casual renter. With software prices tumbling the way they are, this would force most software publishers out of business.
I can't help feeling that the solution will lie in a system whereby each computer has a unique code, like a car registration number. All software to be protected would be supplied to the user with the code suitably encrypted thus restricting its use to a single machine. This would seem to overcome the problem of piracy and force software rental companies to enter into some sort of formal relationship with software publishers who adopt this approach.