Certainly anyone with a CD burner can makes lots of copies and distribute them to his or her friends. Some people even burn hard-to-get CDs and sell them at eBay. But that's not the issue that everyone's been talking about.
Trading copyrighted MP3 files online is what has everyone buzzing. You can use MP3.com, Scour, or any of the multiple sites that facilitate MP3 transfer, but the most famous and widely used is Napster. First, you go to Napster's website and download their client software. Then, using the software, you search for a particular song (2). When the search results pop up, you double-click on the files you want to download (2). When the download(s) are complete, you play your new sound files using a freeware MP3 player.
The interesting thing about Napster is that it doesn't store the MP3s in a central file server like MP3.com does (2). In fact, Napster doesn't store any MP3s at all (2). Napster simply helps you find and connect with other Napster members who have the songs you are after (2). You download the song directly from the other user, once Napster helps you find each other. Napster hopes that this approach will keep it invulnerable to copyright infringement lawsuits (since the users, not Napster, are doing the pirating), but this is currently being tested in pending litigation (7).
Dubbed VHS tapes are generally passed on to close friends, and this has been going on for quite some time. The movie industry is aware of this, and aside from a ominous warning at the beginning of each videotape, hopes that it will remain a insignificant problem.
Enter eBay. With millions of auctions and a loosely worded prohibition on copyrighted material, there is no way that all auctions can be checked for copied videotapes. As a result, duplicated tapes can be bid upon in abundance. Every day, many auctions close with the winning bidder receiving a duplicated videotape. Sometimes it is an amateur operation, and sometimes the professional labels on the duped copies hint at a larger-scale outfit.
Copied DVDs are also starting to show up on eBay. Again, these are supposed to be prohibited, but there is no real incentive for eBay to enforce these rules. Therefore, DVD movies can be had for a fraction of the price but with no loss in quality. And of course, DVD copies can be exchanged between friends.
Computer software has been the target of pirates for a long, long time. Just like VHS and DVD, computer software can be distributed among friends via burned CDs or diskettes.
The past couple of decades has also seen the rise in popularity of "warez" sites. These sites started out as computer bulletin boards that were dialed into independently of the Internet. "Warez" was just an alias for pirated software, and these bbs's contained gigabyte upon gigabyte of copyrighted "filez". When the Internet came along, these pirate bulletin boards migrated to the Net and used FTP to exchange their illicit offerings. Warez sites still exist in large numbers, but due to the searchable nature of the Internet, the smartest ones change their locations frequently to avoid detection. However, it is still not that hard to find what you want for free on the Internet.
With new software swelling to incredible sizes, burning pirated software to CD is starting to make more sense. These CDs are then sold on eBay or exchanged through other channels. eBay is also the place where pirated Playstation games are distributed, although these games are also distributed among friends (9). Indeed eBay seems to be a convenient outlet for the distribution of many different kinds of copyright material.
One of the newest tools available to those who wish to distribute copyrighted software is Gnutella, which was created by programmers at America Online (2). Gnutella is like a Napster for software instead of MP3s. However, Gnutella does not use a "central controlling computer" (2) like Napster does. Instead, Gnutella searches a network of all connected computers for the file requested. When the file is found, it downloads the file directly from that computer (2). Top AOL executives tried to delete Gnutella when they realized the Pandora's box it could open, but it was already too late, and multiple versions exist online today. Someday, using Gnutella, users could be able to download any piece of software they want.
Source for images: News.com (2)