In finance, a foreign exchange option (commonly shortened to just FX option or currency option) is a derivative financial instrument that gives the right but not the obligation to exchange money denominated in one currency into another currency at a pre-agreed exchange rate on a specified date.[1] See Foreign exchange derivative. The foreign exchange options market is the deepest, largest and most liquid market for options of any kind. Most trading is over the counter (OTC) and is lightly regulated, but a fraction is traded on exchanges like the International Securities Exchange, Philadelphia Stock Exchange, or the Chicago Mercantile Exchange for options on futures contracts. The global market for exchange-traded currency options was notionally valued by the Bank for International Settlements at $158.3 trillion in 2005 For example, a GBPUSD contract could give the owner the right to sell?1,000,000 and buy $2,000,000 on December 31. In this case the pre-agreed exchange rate, or strike price, is 2.0000 USD per GBP (or GBP/USD 2.00 as it is typically quoted) and the notional amounts (notionals) are?1,000,000 and $2,000,000. This type of contract is both a call on dollars and a put on sterling, and is typically called a GBPUSD put, as it is a put on the exchange rate; although it could equally be called a USDGBP call.

Our software can change and enhance audio to help people write cool sounding music, much like a car stereo can adjust the bass and treble, but way more advanced. We model classic analog processing circuits, bringing them to the digital world, and upgrading them by adding modern features making them even more.

If the rate is lower than 2.0000 on December 31 (say 1.9000), meaning that the dollar is stronger and the pound is weaker, then the option is exercised, allowing the owner to sell GBP at 2.0000 and immediately buy it back in the spot market at 1.9000, making a profit of (2.0000 GBPUSD? 1.9000 GBPUSD)? 1,000,000 GBP = 100,000 USD in the process. If instead they take the profit in GBP (by selling the USD on the spot market) this amounts to 100,000 / 1.9000 = 52,632 GBP. Although FX options are more widely used today than ever before, few multinationals act as if they truly understand when and why these instruments can add to shareholder value.

To the contrary, much of the time corporates seem to use FX options to paper over accounting problems, or to disguise the true cost of speculative positioning, or sometimes to solve internal control problems. The standard clich? About currency options affirms without elaboration their power to provide a company with upside potential while limiting the downside risk. Options are typically portrayed as a form of financial insurance, no less useful than property and casualty insurance. This glossy rationale masks the reality: if it is insurance then a currency option is akin to buying theft insurance to protect against flood risk. The truth is that the range of truly non-speculative uses for currency options, arising from the normal operations of a company, is quite small. In reality currency options do provide excellent vehicles for corporates' speculative positioning in the guise of hedging.

Corporates would go better if they didn't believe the disguise was real. Let's start with six of the most common myths about the benefits of FX options to the international corporation -- myths that damage shareholder values. Historically, the currency derivative pricing literature and the macroeconomics literature on FX determination have progressed separately.

In this Chapter I argue the joint study of these two strands of literature and give an overview of FX option pricing concepts and terminology crucial for this interdisciplinary study. I also explain the three sources of information about market expectations and perception of risk that can be extracted from FX option prices and review empirical methods for extracting option-implied densities of future exchange rates. As an illustration, I conclude the Chapter by investigating time series dynamics of option-implied measures of FX risk vis-a-vis market events and US government policy actions during the period January 2007 to December 2008. Chapter 2: This Chapter proposes using foreign exchange (FX) options with different strike prices and maturities to capture both FX expectations and risks. We show that exchange rate movements, which are notoriously difficult to model empirically, are well-explained by the term structures of forward premia and options-based measures of FX expectations and risk. Although this finding is to be expected, expectations and risk have been largely ignored in empirical exchange rate modeling.

Using daily options data for six major currency pairs, we first show that the cross section options-implied standard deviation, skewness and kurtosis consistently explain not only the conditional mean but also the entire conditional distribution of subsequent currency excess returns for horizons ranging from one week to twelve months. At June 30 and September 30, the value of the portfolio was?1,050,000. Note, however, that the notional amount of Ridgeway's hedging instrument was only?1,000,000. Therefore, subsequent to the increase in the value of the pound (which is assumed to have occurred on June 30), a portion of Ridgeway's foreign currency exchange risk was not hedged.

For the three-month period ending September 30, exchange rates caused the value of the portfolio to decline by $52,500. Of that amount, only $50,000 was offset by changes in the value of the currency put option.

The difference between those amounts ($2,500) represents the exchange rate loss on the unhedged portion of the portfolio (i.e., the 'additional'?50,000 of fair value that arose through increased share prices after entering into the currency hedge). At June 30, the additional?50,000 of stock value had a U.S. Dollar fair value of $45,000. At September 30, using the spot rate of 0.85:1, the fair value of this additional portion of the portfolio declined to $42,500.

Ridge way will exclude from its assessment of hedge effectiveness the portion of the fair value of the put option attributable to time value. That is, Ridgeway will recognize changes in that portion of the put option's fair value in earnings but will not consider those changes to represent ineffectiveness. Aitan Goelman, the CFTC’s Director of Enforcement, stated: “The setting of a benchmark rate is not simply another opportunity for banks to earn a profit. Countless individuals and companies around the world rely on these rates to settle financial contracts, and this reliance is premised on faith in the fundamental integrity of these benchmarks. The market only works if people have confidence that the process of setting these benchmarks is fair, not corrupted by manipulation by some of the biggest banks in the world.” The Commission finalized rules to implement the Dodd-Frank Wall Street Reform and Consumer Protection Act regarding Regulation of Off-Exchange Retail Foreign Exchange Transactions and Intermediaries.

The Commission also finalized Conforming Changes to existing Retail Foreign Exchange Regulations in response to the Dodd-Frank Act. Additional information regarding these final rules is provided below, including rules, factsheets, and details of meetings held between CFTC Staff and outside parties.

How do you get new customers? How about filing lawsuits and taking a break-your-legs-style approach to busting recording studios via covert operatives? Yes, it’s Banpiracy.com, a new private business dedicated to threatening studios unless they “go legit.” Their efforts got started as part of Waves controversial sting operations in European studios. Now they’re coming for you Stateside, as an independent copyright police. First, they claim 50% (in the US) to 80% (in Europe) of studios pirate software, with no evidence to support that claim. Then, they plainly state their mission is to be a group of legal vigilantes, filing hundreds of legal actions around the country and taking on dozens of studios here in the US. (Great AES announcement; thanks.) Let’s be clear: I’m absolutely opposed to piracy.

It really has damaged the industry, and it really is often perpetrated by people can afford to pay. For people who can’t afford the software, we’ve been big advocates of cheap, freeware, and free/open source software that can be used legally. But making anti-piracy efforts look like brute thuggery is horribly damaging for an industry that’s been working for years to try to encourage positive relations with its customer base in order to compel them to buy software as choice, not out of fear. I’ve talked to many developers who, despite their concerns about piracy, have worked really hard to build that paying base of users, through mutual trust. And I can only see this nonsense having one effect: hurting the efforts of developers who have fought piracy by using sensible product authorization, providing great support, and taking an active role in the music community.

SonicState.com got a great interview, which is nice, as it means I didn’t have to talk to them: And developers, please, we’re happy to help you sell more legit software; let’s stay away from these guys. They’re creepy. This isn’t really an anti-piracy effort; they plainly state they’re out to make more money for their clients.

And that’s called extortion. Updated: Amidst the roiling debate going on in our comments now, here’s an excellent and quite balanced article from Pro Sound News Europe. They detail the tactics used.

In fact, what Waves/BanPiracy is doing is legal. Whether it’s good PR for existing, legitimate customers is another matter. [Pro Sound News Europe] Another observation, if I’ve got this right. Some readers do feel combating piracy may take this kind of strong-armed approach. But, so far, the only confirmed client of BanPiracy is still Waves. That means, whatever claims BanPiracy makes about the industry as a whole, it’s possible no one else is willing to take these kinds of measures. If you hear otherwise, let us know.

But sticking to dongles, serials, authorization, and old-fashioned customer outreach may remain the solution for most developers. Companies like Native Instruments I believe have a forward and enlightened view of cost and licensing. Most people who are into soft synths will go for the full meal deal with NI and get Komplete. Once they do NI takes care of them with really easy to swallow upgrade costs and they sweeten the pot every time by adding product that far exceeds the value of the upgrade price. This time around they throw in Massive and a third license all for around $200.

If you own Komplete 4. I know people hate the authorization scheme but it does work and their tech support, as far as I have experienced is really good. I don't work for NI. I simply think out of all the software companies I have bought from over the past couple of decades that they really get it. I don't mind authorization schemes as long as they work; NI's system does basically work. I'm definitely not blaming software companies — on the contrary, I think BanPiracy is overstating how many 'clients' they're likely to get.

This independent 'business' is using covert operatives and entrapment. If anyone can explain how it is that they establish companies are pirating, I'd be happy to hear it. And 'forced'? BanPiracy seems to have taken this upon themselves on their own; sounds like opportunism to me. It sounds like this group is going after big studios and if that is the case, I'm not losing sleep over it.

I mean, c'mon, if a big studio is using cracked software, lock 'em up. That's just a slap in the face to all the cash-strapped garagebands and songwriters trying to get a break. It also makes me wonder what they do with all the money they have been given to rent studio time.

For some reason, some people don't see stealing software as an illegal act. Maybe it's because the software exists in a 'virtual world' or because they theorize that the software product is overpriced. I dunno I do know that something has to be done.

Is this the answer? Well, what else can they do? Logic board keys? Online registration? All those methods have proved ineffectual.

If someone has a better method to stop piracy I'd love to hear it. Positive relations with consumers really only affect those that have decided to buy the software in the first place right? Again, I'm not saying this is the answer. Just wondering what other options could be available. I think a balanced approach to the sting operation would be for these guys (and other developers) to strongly encourage a commercial for profit studio caught to buy the software they use (perhaps a deluxe version like Waves Diamond Bundle) and leave the settlement at that. Perhaps publicize it to embarrass the studio caught pirating software (I mean really guys, how unprofessional), but leave it at that.

Don't take them to court, don't shake them down for punitive damages. Just embarrass them a bit, get them to buy the software and then let them go. Stealing software is absolutely illegal, and punishable as such. But imagine you're a studio owner who's made a significant investment in hardware *and* software now you have to worry about some shady uncover agents trying to prove you're a pirate?

Anyway, I can speak from experience: I've seen plenty of people give up piracy and go buy software, and that's obviously the best case. Unfortunately, software protection really does cut down on piracy (unfortunate for the rest of us, that is). But I think it's also telling that Apple just dropped the dongle on Logic, and the single biggest PC software maker, Cakewalk, has been serial number only for some time. So basic authorization may be enough, minus hardware dongles. It may not stop piracy, but it can discourage casual illegal copying.

Those who do use dongles, well, at least many of them have reasonable replacement policies and good support, and it's worth researching when you're thinking about software. Authorization schemes like Propellerheads, NI, Ableton, Cycling '74, et al also can work. Is a developer alliance and software retailer that encourages people to buy independent plug-ins rather than steal them.

They also have an extensive list of. Is an industry effort that encouraged anti-piracy proactively, without the strong-armed approach, by working with studios. CDM's own series was a big hit, as have other free + cheap line-ups, which tells me that people really do care about finding software on a budget legally. I hope we'll do more with that. There's a lot of new interest around open source software, for people who do want to freely copy software or modify its code — that's another valid and legal choice.

Linux now even has a number of free distributions of creative software, like the recent Ubuntu Studio. Of course, these guys won't talk about free, cheap, and open source, because they want you to believe every pirated copy is directly-lost revenue, even though that just ain't so.

(And since we don't know what the source of pirated software in these studios is, or how much software is pirated, or what techniques they're using to determine how much is pirated and even if those techniques are legal or simply ethical, there are a whole lot of questions here.) And I don't know that this kind of campaign really helps perception. Is this is a problem? Is it the only problem for the industry? That implies that the music software industry is dying, which I think detracts from the incredible work a lot of these software companies have done. They've built a business and attracted customers, sometimes fighting piracy to do it. And the people I know who are serious about music production, serious about running a studio, buy their own software.

Fighting piracy really is important, and it really will require policing. But I think self-policing is likely to be the most important. As long as you have something ephemeral like software, you're going to have piracy. But basic safeguards, and the other things you do to make people understand value, have kept this industry alive and can continue to do so. It'd actually be really interesting to bring together some of the software developers on this for a round table, as I know most of them do think about this issue (and without hiring someone to saddle studios with lawsuits). Phyllis: I don't thing apple fits in that group (since they can sell the software at whatever price they want – it will hardly make a difference to thier bottom line if they give logic away free). Phead and ableton – I definetly agree.

Not just affordability but top-notch support, upgradbility after market freebees (in case of propellerheads – free refills, some of them VERY high quality like the electromechanical refill, or the 2.5 update which added a lot of cool stuff – and was free to 2.0 users). These guys make you feel like you made a smart choice buying their software rather then pirating it. And that's the way I think software companies should go.

Phyllis – if you don't like Waves' prices, don't buy their software. I work exclusively with freeware and I couldn't be happier. But you couldn't seriously be using that as an excuse for piracy? Apple is a huge company, they can price their little pet project however they'd like to. Ableton markets to a much larger audience than Waves. Waves is a small company that has been an innovator for years, and that means a lot of R&D, which is very expensive.

Not to mention their products are way above average (PS, a single plugin costs about 200$, not that expensive – as expensive as, say, a cheap Zoom H2 handheld recorder, or a cheap chinese condenser). Let's take Apple as an example: Final Cut Pro. 800,000+ users as of this year's NAB and growing fast.

That's legit users, not pirates. Even assuming volume licensing, that's a huge amount of cash. And Final Cut Pro is not hard to pirate — these folks chose to get it legally. Apple made $386 million in application revenue for Q2 2007.

It's not all software — that's 'software, service, and other sales' — but it excludes iPod/iTunes/iPhone revenue, it's a big chunk of their yearly revenue, and it's one of their fastest-growing segments. Now, music piracy may indeed be worse, but Apple has directly positioned Logic Pro as a complement to Final Cut. Do they want to give it away? I don't think so. Is Apple interested in you handing them money for Logic Pro? I think that's a safe bet. For the record, Waves claims 'over 150,000 users worldwide.'

If I were arguing in favor of piracy, that'd be one thing. Again: I want piracy cut down. I just personally think this is a terrible way to do it, and I can't come up with a justification for it.

@Yuri – Clearly you work for Waves. That Tomar guy is a scary wicked SOB whom just drips darkness and of course he worked for Waves what a suprise! Though out time, All great offensenses have started as quasi defenses – it is SOP and of course it would be Waves whom started this as the are the worst company of all time in their treatmeant of their customers. I take great joy in not using any Waves products at ALL in many years time. I take even more joy in using my UAD card and the plugins that sound better imho than Waves, and of course they use less cpu by many times.

I also tell every new user I meet or teach, to avoid Waves like the plague that they are. The past couple of weeks I have paid for 2 new UAD plugs, my Reason 4 upgrade, I am waiting to buy my Live 7 upgrade and have a Cubase 4.1 upgrade coming for free in a few weeks. I will be getting LP8, very shortly, after my MBP. I will also continue to never use Waves again as long as I live. Reading through the comments all the non- litigious methods of anti-piracy are very passive and depend on the 'honesty and conscience' of the pirateer. Damon hit it on he head 'I feel people will not be very inclined to buy software by choice when they can rip it off.' In life, I think people, in general, fall in three camps – 1) 50% will pay for a service.

2) 35% will always look for the cheapest way to the deal for said service. 3) 15% hate any price for the service and would rather get something for nothing by any means necessary.

Since, as far as I know, there has been no publicized penalty for piriting music software 'Warez,' the people in category three feel no reason to follow the letter of the law. Software copyright enforcement is the legal equivalent of jaywalking.

It needs to be stopped an penalties need to be levied. I think maybe, triple the retail price and court costs would be a 'fair' penalty but I'm just pulling that out of thin air.

Are we really still having this argument? You can't stop piracy by cracking down on it. No amount of prohibition will work. Bits are easy and cheap to copy and distribute. All copy-protect schemes are hackable.

The less hackable, the more you run the risk of making things such a hassle for your paying customers that they stop using it. Payment for software must be built on creating a community of people invested in the software, not through other measures. I pirate 100% of my non open-source music making software — before I buy it. There's far far too much software out there with crippled or non-existent trials. Sorry folks, I'm not going to buy hardware without using it first and I'm sure not buying a plugin or DAW without trying it out extensively first.

You will never come up with a scheme to stop pirating by shutting down sites, suing your users, or otherwise. Pirated software has always existed and is only increasing. GET A NEW BUSINESS MODEL.

That being said, if companies (HEY ADOBE) stop building pirating into their prices by jacking them up to completely unreasonable levels to gouge their corporate customers who have to pay (really, adobe cs3 is totally ridiculously priced) then maybe people /would/ pay. Whether or not Yuri works for Waves – or BanLunacy.com – is irrelevant. He's obviously involved with their PR and I thank him for having the temerity to post his comments here, as it really helps us to understand where they're coming from.

As a FORMER Waves user (I opted to NOT pay their gouging prices when migrating from OS9 to OSX), I can say this. Waves makes ONE good plug-in. The Ultramaximizer. Everything else has been copied – and improved upon – by the competition. Even the Renaissance plug-ins. So I recommend that we look for the best +L1 alternative at an affordable price point and stop worrying about a company that is clearly so desperate that it has to resort to thuggery.

And while we're at it, here's a link from August that points out BandaidPiracy's modus operandi. Honestly, guys There are so many alternatives to Waves that we should really just consider – dare I say it – a boycott. Oh, and Yuri? On second thought, if you ARE a Waves or BP employee, you have no idea how much ill-will (not sales) this 'solution' is going to generate, so please by all means, go F&%K yourself.

(Hey, I said please) Let the Waves-goes-out-of-business countdown begin! Way before we heard anything about the so called 'BanPiracy', of all the companies in the music software business, the one that was _already_ the most despised by its legit customers, and that has generated the most ill will because of what is widely perceived by customers as unnecessarily abusive upgrade fees is Waves. Anyone who thinks otherwise should go over to DAW-Mac or similar and see if you an find any of the many legit Waves users over there who have anything good to say about the companies treatment of its customers.

With this already being the case, it is not much of a surprise that of all the companies in this business, the one that goes this route is Waves (as whether 'Ban Piracy' is actually part of Waves or has been spun off to pretend to be a seperate company, its clear that its a Waves iniative run by Waves people.) This company has priced itself out of the market, has already alienated most of its paying customers, and has the worst reputation for customer relations of any existing company left in the business (the ones who were even worse have already gone under) and this is their new great idea? They really just don't sem to understand the reality of the world that they are operating in. I am in a position where I have a litle bit of influence on software acquisitions for quite a few musicians and small studios.

Several of these people were/are using cracked copies of Ableton Live, NI packages, and other software packages including Waves. Here are several random thoughts: I guess the bigger a software company is, the harder it gets to see the relationship between paying for a piece of (their) software and keeping the company going. Maybe it's me, but I think Waves have way too many products, and there's a retro feel to how they market these. Do companies like Waves realise that as soon as there is a good free (as in free beer) DAW out there, quite possibly the same people will turn to creating free high-quality plugins? I think they do, and BanPiracy banks on that ('our days are counted so we have to act now!' ), which makes such fear-induced schemes look even more pathetic.

Phyllis has a point there, I think. Waves make great plugins, however, they're no longer alone where they are in terms of quality and ease of use. I think enforcing the law on software in a crowded field (audio plugins here) is like shooting yourself in the foot.

How about taking the massive userbase you've built (regardless of whether they're legit), and doing something better than intimidating them, Waves? @Yuri – I do not believe you.

@Phylliss Stein – In case my post was not clear enough, I am in and have been in a Waves boycott for several years and All are welcome to join in. I would not use their overated, over CPU hoging, over priced crap if you gave it to me for free. I love the UAD people and products, for others, there may be better choices, as long as it is not Waves. They are just horrible people and I would never want anyone to see me using their products. That Tomar guy whom was/is a DIRECTOR at Waves, wishes he could torture the studio owners to turn in the other terrorists.erra. No no violaters.

This is in fact a legalized extortion racket. It would ring more true and have much more integrity, if they just turned all the caught studios over to law enforcement. I'm glad you guys found this helpful to the debate, I went to the Waves stand and asked if I could talk to someone about this issue and was directed to these guys. When I arrived, I was vetted by their media minder, who wanted to know what questions I was going to ask and then briefed these two as to how to answer. I must say it was more like a government interview and clearly they are very guarded. In a conversation afterwards it is very clear that they want to promote the brand of banpiracy.com to make more money for everyone. Obviously Elbaz is passionate about this issue as he was involved with Waves, who I feel have a particularly protective attitude to their business.

Mike David has a background in business credit management – which basically means that he's a debt collector. I think they disregard the point about negative PR for their clients at their peril, they are concerned only with asset recovery and that perhaps blinkers them to the wider affect of this kind of action. It will certainly be interesting to see if smaller, 'cooler' software houses get involved and whether this sort of approach can work for them •. Please, by all means, get started on my 'pompous' rape analogy.

Wait until you work hard on a piece of software, that's supposed to support you and your family, and have someone pirate it. Let's see how dandy you'll feel after that.

By all means talk to software engineers, especially small independent ones, whose rights are violated without anyone to turn to for justice. Maybe the director of On a practical note: maybe Waves is a rich son-of-a-bitch, but don't forget the company supports dozens of workers who are 'small fry' and who get sacked when the profits aren't high enough, and who are the real victims of piracy. Let's assume for the purpose of this discussion that I'm a Waves nut, I've got posters of Tomer whats-his-name on my room walls and my favorite CD is the recording of Sonic State's interview (it's not, it's Queen's A Night at The Opera). Address my arguments on a factual basis instead of just running around like a bunch of panicked girlies flailing their arms and screaming, 'he's from Waves, he's from Waves, make the big bad man go away! (sheesh, he might awaken that annoying thing called a conscience I've worked so hard to repress )' •. >Yuri: hold on a minute, there seems to be a misunderstanding here. But Piracy already IS 'banned' in most countries it is just that in the real world this ban, unlike the 'ban' on stealing Ferraris, is not enforced, principally because it is not enforecable.

' By all means talk to software engineers, especially small independent ones, whose rights are violated without anyone to turn to for justice.' Hi Martin, It's obvious that in most countries the law enforcing agencies do close to nothing about software piracy (unless you dispute that claim, which is another story altogether). I am definitely suggesting a form of 'taking the law into their own hands', but the word vigilante is misused here. A vigilante is a 'judge-jury-executioner'. BanPiracy definitely are not.

They use the law as-is, much like a husband hires a PI to photograph his wife's affair so he won't have to pay so much alimony in court. They do not break any laws. You can refuse to pay and then the burden of evidence in a court of law is ON WAVES. THEY have to do all of the work, and the judgement, jury and execution is in the state's hands. Unless you're saying that the law itself (which Waves is leveraging) is flawed?

Like I said, I believe Waves' choice is morally justifiable, although from a business point of view it is (legitimately) questionable. If someone broke into your studio and stole all your hardware and your just completed album, you would be mad. If they then took your gear on the road and performed your songs in public with your gear and made money doing it, you would want blood. If you did not want to go to jail yourself, you would seek legal alternatives to punish the thieves.

I imagine software developers feel somewhat like that. If they start suing kids trying to make beats in their bedrooms with pirated software, they may suffer backlash like the RIAA has, but if they focus on 'pro' studios that should know better, I don't see why they would suffer much backlash from their loyal customers. Remember their customer base is made of people who are paying for the software already. Finally, if I ran a pro studio and used lots of expensive software legitimately, I would be unhappy if the studio next door was using cracks. The money that they did not spend on software would let them buy more hardware or give discounts to their clients, giving them an unfair competitive advantage. (Or, they could take more vacations than me.) So, legitimate Waves users should be thankful that they are going after the pirates. I can’t say it surprises me that Waves would use this type of tactic.

I have real problems with their business model. Having to pay a yearly fee to them wether or not there is an upgrade is ludicrous.

You don’t own Waves software, you lease it. I will happily pay an upgrade price a piece at a time. I will not continue to pay for the WUP given that I’ve spent more upgrading their software than I paid for it to begin with. I wrote to them about my concerns and their reply was essentially ‘tough luck’. I was a loyal customer for 10 years. Their products are very good, especially their comression/limiting tools.

But I’m done with them •. Haven't we been through all these analogies with the RIAA? Let's just get this straight: pirating software (or any digital media) is *not* the same as someone breaking into your studio and stealing your gear, or stealing a TV or sports car. When these are nicked the person who owns the product looses it. Now if someone breaks into your studio and makes an exact replica of all your gear I'm not saying it's an entirely victimless crime – obviously revenue is being lost, laws are being broken.

But trying to shoehorn a physical media paradigm where it doesn't easily fit doesn't help anyone's arguement. Also, about GIMP. Yeah, it's great and all, and it's good that it's out there.

But if you're a professional designer you *need* to know Photoshop. It's great that you can get most of the stuff done in whatever freeware alternative, but since everyone else in the industry use the PS standard, either get on board or get the scraps. The problem for Waves is that they've spent a lot of time and money positioning themselves as the Adobe of DSP, and anyone with an interest in digital audio and an internet connection know this to be far from true. Big corporate clients for Adobe probably generate revenue in the 10k/20k range; design rooms full of computers humming along with CS software. Waves, a big client might have 2/3 DAWs, and spend a couple of grand to 'maintain' their license – and those clients would be rare. Quite frankly, especially in the case of Waves, I don't know how unauthorized use and 'thievery' are synonymous.

One goes to the Waves website to obtain the latest demos of their products, good for 15 to 30 days, can't remember which. At the point the demo is over, what's to stop a person from uninstalling ALL of the product's software and documents, going back to the Waves website and downloading a fresh demo to install for another 15 to 30 days? There are no laws against doing that. Yeah, it's exploitive, but it's not thievery OR unauthorized use. Second in a court of law it could be argued that the studio used the unauthorized copy of Waves at the request of the undercover sting agent.

I'm not sure how far it would go, but if a studio keeps demos of Waves products on a computer that is set aside for studio tours then Waves has a bit a lawyering to do to prove that the demos were being used without permission on studio productions. What sounds more persuasive to a civil court judge, a studio promoting Waves products as a means to get business or studio's client observing unauthorized use of Waves products in a production.

It's true that if a person takes another's automobile without permission, drives off to California or somewhere, that it is considered theft. If a person steals your car, then you don't have it anymore. In the case of Waves, the analogy doesn't hold.

While one can use Waves without permission, one cannot take Waves without permission, no matter where the 'culprit' gets it from. Waves always obtains the original copy and source code for its products. Waves licenses copies of its software for use. Last time I checked, Waves was proprietary software and not open source. Therefore the accusation of thievery in either case is false, which makes any arguments to that claim fallacious. The fear tactics used by companies like Waves and their vigilante group BanPiracy operate on fallacious arguments equating the unauthorized use of software with theft. And that's what's the big problem with this campaign.

They have to target studios without knowing for certain that copyright infringement is taking place. And once the sting agents request that a demo of Waves be launched they say that they have enough evidence to convict of theft? I'm not even a lawyer and even I can see the holes in that argument. A seasoned lawyer would have a field day with that in court, and I'm sure some of the biggest studios can afford the best money can buy.

Not that they'd need a lawyer of the highest caliber to prevail in court. The outrage of course is that Big Time Phenomenally Successful Hollywood Studio doesn't want to waste time giving tours of its facilities to spies. There a loss of potential revenue right there. Will Waves reimburse the studio's lost hourly rate in the event that no evidence of wrongdoing is uncovered? Sooner or later the studios are going to know who the agents are or were.

And then what does that do for Waves' reputation. In this day and age does a studio really want to spend time giving tours to fake prospective clients? It is quite obvious to me that Waves have bought this unauthorized use = thievery rhetorical silver bullet from its lawyers. What happens when legit studios stop renewing Waves' asinine WUP and deleting it from their hard drives? And the studio assistant says, 'Sorry, we do not use Waves products anymore. Let me demonstrate for you something that's better.'

Will the sting agent break cover and hand out brochures of Waves products? What happens when studios decide to go to court and if convicted they pay the penalty, AND they refuse to use Waves products? Is it a win for Waves? No it is not.

No more chance for stupid WUP renewals. Phyllis, first of all, it's 'Methinks the lady doth protest too much, ' and that would also apply to anybody who 'protests too much' about Ban Piracy tactics. Demos can't be used for commercial purposes.

It's in the EULA you accept when you install. Interesting how musicians who want to make a living making music (aka their Intellectual Property), but are so cavalier about stealing IP from others. 'What goes around, comes around.' If someone steals your car, are you going to offer him the chance to just buy it from you, or would you expect them to be punished? I just want to observe, with very few exceptions, no one here is advocating any kind of piracy. The question is enforcement and what is appropriate, *especially* when the target of your enforcement is also your customer, as a widespread operation against music listeners or music studio would be.

And just as many musicians — even those who are protective of IP — have been displeased with the RIAA pushing actively for needless DRM and suing grandmothers, it's clear that at least some legitimate software companies don't like their vendors going on a campaign against as many recording studios as they can find. I expect Waves and BanPiracy may well have solid legal footing, but as others have observed, that doesn't mean it's a terrific PR campaign.

I'd like to make the observation that resorting to this kind of legal strong-arming of one's own customers against piracy is a symptom of a company desperately clinging to a failing business model. It's happening right now with the RIAA. CDs sales are plumetting, digital download sales aren't enough to combat the loss, so they dig in and try to scare customers into shelling out the cash for their music. And yes, people should buy music (and software) that they enjoy, but the bigger picture here is that it's a last resort, and ultimately, it's not going to save them.

The music industry has failed to react quickly enough to the demands of its customers and the technological advances of the times and are paying the price. I think that the same may be happening with Waves; for whatever reason, they're struggling and are trying to compensate. But what about the music software industry in general?

Like it or not, open source music software is maturing, and it WILL become a commercially viable option. It's not quite there now, but it's just a matter of time. And when it does, what incentive will companies like Ableton and Waves give to customers to shell out $200+ for software that functionally does the same thing that software like Ardour does for free? Ardour is accumulating that with each day developers work on it. Like I said, it's just a matter of time before the open source stuff gets there. New features?

Honestly, how many new features does one need from a sequencer? At the end of the day, it's just a sequencer. A pretty GUI then? Customer support? It's just not going to be worth the price of admission. They'll manage to hold on to the old-schoolers who are convinced that money-spent=value, but the new generation won't be so sold.

: They may well be customers, or potential customers, and the perception I've heard from other studios is 'they're coming after studios' more than 'they're coming after pirates.' So clearly they have an image problem with their customer base, to say the least. Are these studios using exclusively cracked software?

I sure hope not. A lot of cracks are highly unreliable from what I've seen from, which is part of how I have successfully convinced ex-pirates to join the Legit Software Navy; go ahead and use the cracks and suffer the consequences. @Gogmagog: I'm a huge fan of open source, but I don't think Waves going over the top means music software is dead. There really is a business model here that supports people, lets them feed their children (literally). And there's still tons of money to be made in album sales — I agree absolutely about the record industry, but it wasn't the model of selling albums so much as a specific surge of sales in the 90s, driven by pop megastars, that they couldn't sustain. The market has changed, it's more diverse (the Latino market was growing and continues to grow while Pop and Britney Spears were flaming out). And there's probably a parallel here, as well markets shift and change, and you have to adapt.

It's unfortunate that you do have to deal with outright theft, yes, and some kind of enforcement is clearly necessary. But when you're sending people undercover to bust people in your own market and blaming all your woes on piracy, it does seem that something else is going unexamined. And meanwhile, yes, Ardour is awesome. But unless I see major indications otherwise, I see free-open source and commercial models coexisting for the forseeable, which should be a good thing. The point with my previous post is that it may not be the smartest move to use 'The War On Terror' tactics to try and get people to buy software. And the same applies to buying music. There are studios that haven't been caught yet that are simply going to delete Waves products from their computers, and never think about using Waves products again.

That should be fine with Waves. There are freelance recording, mixing, and mastering engineers who take their authorizations with them on their iLok keys. I have met a few of these people online. And so the existence of Waves demos on studio hard drives is not evidence that any wrongdoing has taken place. I have gone to music stores and have seen Waves demos in operation on DAWs featured in the stores.

Not once did I think pirate. My assumption was that the iLok key was kept in a safe place. Anyway, as much as Waves does have legal ground, I'm pretty sure they have to do more than uncover demos being installed on computers in recording and post-production studios.

They have to actually witness a crack in use during production. And no one's making money off of Ultramaximizer either, if you think about it. Well, maybe Waves For now (BTW, for the record, I used 'Me thinketh' because I didn't want to be accused of stealing, Jonnykins.) Here's a scenario. You're an employee of Waves, you go to the dickhead president with this idea, he says 'I love it! It will enable me to squeeze every last dime from my failing business. But I don't want to be the bad guy. What should we do?'

'That's cool, o great master. We'll create a front company called BanPiracy.com and you can be our only customer! This way, if anything goes wrong, I'll take the hit, not you.'

'Make it so, my loyal knave.' This sounds like really likely scenario, if ya ask me P •.

BanPiracy is a collection agency. That should tell everybody something right there. They are in if for the money and not for some pious moral reasoning. As soon as the game dries up then what are Waves going to do in order to increase sales? BanPiracy are obviously using the Waves case as a means to market their services to other software vendors. They are hoping to catch some big fish.

Micosoft, Apple, Sun Microsystems, maybe? Clearly they are not going to make too much dough on Waves' market share which will more than likely dry up fairly quickly, if it hasn't already. The whole thing stinks from non-verifiable market research results supporting the 80% European – 50% United States market saturation of piracy in commercial studios, to the methods used to expose 'pirates', to the criteria used as determining that piracy is taking place. Right now I cannot imagine a way that those market research figures could have been arrived.

Did BanPiracy go to 100 studios in Europe and the United States in order to extrapolate those figures. What are Waves' success rate with renewed WUP subscriptions?

Especially given the ever improving and inexpensive competitive options that are available these days. Buy Logic Studio 8 for $500 and the temptation to buy Waves Platinum at $7500 is diminished even further. Could it be that Wave's market is saturated to the hilt with LEGAL users of its products? If that's the case, those 40-45 cases mentioned in the video is hardly going to help the matter of no one to sell to reverse.

Are full-fledged audio and video production facilities opening up at a record rate these days? I haven't heard about it. The music industry loves to blame P2P for declining CD sales. The music industry fails to take into consideration competing industries like the console and portable video game industry and mobile communications as being a part of the reason that sales have backed off. The music industry loves to reminisce about the heady 90s when it was making all that money from music lovers replacing their old scratched vinyl with digital reissues of old titles, remasters of old titles, and remasters of remasters of old titles.

The music industry really misses MTV making megastars out of a-ha who sold 75 million records and singles, or Sade, an artist who was famous for releasing an album every three years, who sold 50 million records previous to her fourth album Love Deluxe. Then there are the galactic superstars like Michael, Prince, Madonna, U2, who all bled MTV to death for riches and glory, some of them producing really good music. And how about Sting and The Police, eh?

Sure do miss those days. Must really be the pirates fault that MTV no longer plays music videos 24 hours a day.

I'm sure A Flock of Seagulls didn't have anything to do with that either. Nothing has replaced the phenomenon that was MTV. Could it be that Waves in its comparatively tiny market have overlooked a few things as well in its determination that commercial studios are losing it money? Wait a sec, Jonny since the only people going into a studio to insist on Waves plug-ins seem to be undercover agents, doesn't that mean a third studio can use more affordable software and charge $30/hr? Or, let's be realistic, a fourth studio that has a better engineer who can rely on talents as much as anyone's specific products, for $50/hr again? Despite the anger here, I do know people who use and love Waves — that's their choice.

But it's not something you *have* to have. And the likelihood of pirated Waves bundles literally stealing business from another studio, even at Waves' prices, seems absurdly far-fetched. Even if you agree with BanPiracy's tactics, surely this doesn't mean we have to go down the road of imbuing one company's products with mystical powers over sound. That's best left to marketing people. 😉 As for pricing/Apple/etc.: Cakewalk is also in the $500 range. A current cross-grade means just about anyone who's ever owned anything can get it for $350. When last I checked, they don't manufacture computers, phones, etc.

It's up to companies to choose how to price their products. But there's absolutely zero basis to say that you *can't* price it lower successfully, because it's been done for years.

So, again, why cast suspicion on the competitors just because they're selling a cheaper product? ('So sue me' is the phrase that comes to mind) •. @ Alex It seems you are the one on the 'moral high ground', whatever that means or wherever it is. Who, exactly, wrote a defense of studios profiting from the use of pirated software?

I don't think anyone here did, regardless of their stance on methods to reduce piracy. If Waves' EULA for the demos of their products specifies that one cannot use the demo for commercial reasons, and only for demonstration reasons, then what is the problem with studios having demos of Waves products on their computers for the purpose of demoing their services to PROSPECTIVE CLIENTS?

I have already stated that I have seen Waves demos in operation on DAWs in music stores, does that reek piracy to you? Does that reek piracy to Waves? Not only is the music store promoting the fact that it carries Waves products, it is also promoting the fact that it is a professional high-end retailer and that other products of similar value can be purchased there. It doesn't reek piracy to me.

And I've already stated, what should be blatantly obvious to anyone familiar with iLok, that there are freelancers who carry their authorizations for Waves products on their iLok keys. What that means is that studios can indeed have Waves demos on their hard drives for use in the event that they hire someone who is authorized to use Waves products. That person inserting his iLok key into the computer to authorize the software. Tell me how this scenario equates with lost revenue for Waves? Clearly they approve of this since it they who have contracted with Pace/iLok for their copy protection/authorization services. And $7500 is a lot of money, even if one could afford to pay that amount, and as far as economics go price versus performance is always a consideration. The performance of the effects plug-ins in Logic Studio 8 at $500 rival those offered by Waves.

There is no question about that. Maybe they are not perceived to be 'better' than Waves by some, but many albums have been produced use those plugs in the context where they were more favorable to use than what Waves had to offer. And if you cannot comprehend standard English, then perhaps you might take your final statement to heart? @alex, and others who asked this question: 'What else can you do?'

You can do what the music software industry has done for the last 20+ years. You choose software protections, but you also balance that with customer needs. You build customer relationships.

You encourage people to buy your stuff. That's not to take the challenges of music software development lightly. But by implying a 'crisis', BanPiracy takes away from the fact that, for many, the above approach is working. Not headache-free, but working. Alex, are sales really less each month? There seem to be other cases where software sales are growing, or at least are flat; that's not the case?

(Not to pry into your business, specifically, but maybe what you're hearing) The issues here remains specific to Waves, though, as the majority of software developers are dependent on sales from more than just studios. And anyway, the consensus here seems to be 'Waves is overpriced, I'll not buy it / buy something else, why is only Waves hiring undercover agents?' , not that they'll pirate anything.

If *paying* customers want to complain about price or piracy measures, that's their prerogative, just as it's the manufacturer's prerogative to choose what they want to do. If you think Waves plugins are extortionate, then don’t buy them. People cannot possibly suggest that them being expensive is a legitimate reason to pirate them.

That’s ridiculous. They sound decent, the cost of equivalent hardware equipment would be astronomical in comparison, so they cost what they cost. If $7500 is too much, then tough. But don’t think you’re on some moral high ground. Can people link to more information about Waves having ‘abominable’ customer service? I don’t think piracy, certainly in the case of studios profiting from the software, is defendable in any way.

The music software industry is really not as big as people seem to think, these are not megacorps. And that’s irrelevant anyway. If you can’t afford it, go freeware! There’s tons of great stuff. Otherwise, shut the fuck up. Alex, if you need links about Waves customer “care” you have not been in the game or even on the sidelines and should surely not tell those that have to STFU.

I do not think anyone should pirate any Waves software at all for any reason at all. Rather, everyone should refuse to use it, at all, for any reason at all, at anytime. That what I do. Their time is over, any way you slice it. Those whom have not moved on to better, cheaper plugs, from better companys, will do so in the near future. I am sure of it •. @ bliss I’m not really talking about anyone here particularly.

I should have qualified my outburst in that way. But people attack the methods Waves and BanPiracy have taken, when really – what else can they do? Piracy is a very clandestine act. It’s very hard for any company to find out who is pirating their software without actually going in and looking.

What alternatives are left, if you’re not prepared to devalue your software? It sucks that this is what they’re resorting to. But I can see their viewpoint on it.

I do, by the way, completely agree with you as well that far cheaper plugins are mostly as good and useful – they form far better value. Peter, I'm wary of commenting on this issue for lots of reasons. However, I would suggest that you're suggestion ('You can do what the music software industry has done for the last 20+ years. You choose software protections, but you also balance that with customer needs. You build customer relationships. You encourage people to buy your stuff. ) is pretty much exactly what Waves has done to date.

They seem to have taken things to another level with this move. Precisely what the motivation for that is, I don't know. I am not sure that CDM has a readership that is particularly representative of Waves customers, but I could be wrong. Peter Kearney made some interesting points above about the validity of that whole 'you wouldn't steal a car' analogy per the replication of the end product, and the main cost of software is development. Its a different business model and im quite tired of such unimaginative analogies delivered with almost Gospel fury. Also, i think we can all at least meet on common ground to consider that people who WILL buy and people who WILL NOT buy are quite strong demographics.

The people who MIGHT buy are the ones that need to be encouraged. For me, I cant even IMAGINE pirating Ableton, i quite simply buy it and rely on it to do what it should, occasionally dialing home to check for upgrades, but i would consider moving to Cubase if they suddenly hired storm troopers and made people feel like they are being watched. PS, Im getting rid of the couple of Waves plugins i own, and am moving to the excellent TC suite of plugins. Its not much, but i think in a market where everyone is making relatively equivalent quality software, i can put my money on the side of companies i like more. See ya waves!

Never did much like your Rverb anyway 😛 •. PS, i love that video.

Cfa Candidate Body Of Knowledge Cbok Pdf File there. Mike David is such an easy target. Public spokes-people should actually be able to communicate. What an awkward bundle of out of place cliche and buzzword assembly. I was half expecting his little friend, who kept staring into the camera, to start rapping. We have a War On Terror, and a Ban on Piracy. What next, a caution on infringement?

A stern finger waggle on file sharing? Are these wannabe Bobba Fett of Copyright going to get cool uniforms?

Is Jerry Bruckheimer writing a new crime show for them as we speak? What about Law & Order: Software Division???

I think it is important to understand that banpiracy.com is being paid on settled cases (at least that is what I heard in the video). That is exactly how a collections agency operates. They have an incentive to settle cases, be they through a settlement or legal actions. Now there seems to be no information regarding the number of successfully prosecuted cases, so I don't know if they have actually had any. My guess is they are relying heavily on settlements to bankroll any litigation they may have to deal with. I would think that they are making the settlements 'affordable' meaning slightly cheaper than having to go to litigation. This is a tactic I see commonly used in other IP cases.

The defendant would rather pay a small licensing fee, and penalties, rather than pay legal fees, and possibly face loosing the case. Now with having said that, there is no reason that banpiracy.com has any real onus to take care in building a good case. The mere threat of pending litigation could be enough to scare a studio into paying up, even if no crime were committed.

Once a small number of studios decides to stand up to them, they will need to start fabricating cases, and result to extortion to stay in business. So while what banpricay.com is doing is not illegal, it opens up the strong possibility for abuse.

Any evidence they collect would probably not be admissible in court, but since they probably never get to court, it really doesn't matter. I've seen companies like banpiracy.com in many other industries. In the end, they cause some harm, make some money for themselves, and eventually go away when their business model no longer is profitable (which isn't usually very long). Most companies in most industries would rather have strong PR, than deal in seedy ventures like these. Keep in mind, while piracy is a problem, most software companies do not want to resort to extreme measures like this, and risk loosing potential customers.

In the end banpiracy.com will fade away. If they are smart they will do so before they start bring false accusations, but only time will tell. I would expect several things to happen, some good, some not so good. There will probably be a slight uptick in the use of legitimate software instead of pirated software, mostly just due to public awareness from this news issue, which is a good thing. People who switch software will mostly likely choose any product on the market BUT Waves, losing that company far more money than they will ever gain from their handful of lawsuits.

Studios are businesses too, as it turns out, and they do not take industrial espionage lightly. The days of the casual studio tour showing 'the works' will come to a close. Prospective clients will be vetted before the day of their appointment, or kept in the reception room and shown some gold records. Enlightened, intelligent companies with good customer relationships and fair pricing will continue to gain market share, while the litigious rear guard fights its twilight war against a dwindling pool of users.

BanPiracy will eventually pick the wrong victim or push their tactics too far, and find themselves in a world of trouble with the courts. I would be fuming mad if an undercover civilian came into my studio for such a reason. Only police have the right to do such a thing, if even them.

When i have a commercial studio, i will have a disclaimer for all clients: there is a $20,000 penalty if you book time for reasons other than we have agreed upon, specifically if you come to my studio to bust me for piracy, or are affiliated with ban piracy in any way. Ill put it in small print at the bottom of the forms you must sign to book studio time. That has to be legal, its what all the big companies do ('hey you signed it').

I dont agree with piracy, but this is effed, and i will never buy waves plug-ins because of this. There are plenty of great alternatives these days, like wave arts etc. • Pingback: ().