Here is how to stop piracy. Make it an actual crime. If you are caught, you face a year in prison or a $5000 fine. simple. Sure, your odds of being caught might be less than 1%. But if you were caught you would wish you had never done it.
Nonsense. You erroneously assume that threats of jail time are an effective deterrent, and even that the point of incarceration is the same. If that were the case, there would be no murderers or pot smokers or tax evaders.
The reality is that piracy is an expected reaction of the marketplace to conditions that attempt to manipulate it. For example, if the government were to suddenly make it illegal to drink alcohol, the marketplace would react by opening up secretive pubs for patrons to illegally imbibe the stuff. Oh wait, that already happened once! You see, the reality is that the market will try to consume whatever its participants want to consume--laws and other methods meant to restrict it simply cause expansions of the grey and black segments of that part of the market.
Use of force (or threats thereof), such as jail time, only alter the nature and supply-chains of markets, not its consumption patterns. Our current situation is a result of consumer perceived disparities due to the availability of new digital distribution methods. Hence, the grey market expanded (i.e., consumer piracy, which by-the-by, has existed for decades and is not in any way a new element ... anyone who used BBS' enough during the 70s and 80s can testify to this).
What will "solve" it? Lower product prices relative to broader market access (i.e., global vs. regional) and the less-expensive digital distribution options (look at the vastly increased sales of games currently experimenting with this on Steam for an excellent evidential basis), as well as better product quality (primarily through increased consumer participation in product development cycles, as with Elemental, alongside more refined iterative-development processes used by developers).
Many companies treat consumers badly, in the current environment, ironically in the name of higher profits--ironic because higher profits would be achieved through strategies better aligned with the consumer marketplace, not through Statist-centric methods such as lawsuits, hostile DRM and lobbyist pursuit of new laws meant to expand copyright enforcement.
After all, how are consumers supposed to react when they are restricted in often abhorrent ways--regional coding of products, attempts to enforce untenable product use/installment options, and even the occasional and ethically bankrupt use of technology to gain advantage over consumers, pirate or not, such as Sony's Rootkit fiasco.
No, neither jail-time nor DRM are the answer, though the majority of companies already know as much. DRM is not really an anti-piracy tool, after all, it is a method meant to extract more money from consumers by maintaining "title" monopolies, via copyright, and by increasing primary market sales alongside a simultaneous reduction of secondary-market product exchange (i.e., used, or consumer-to-consumer). That is, DRM is about short-term profit strategies that come at a cost to consumers--and most of us don't find it agreeable.
