opinion

Software Audits Pose Potential Problems for Adult

Piracy is a hot button issue for the adult entertainment industry today, but software publishers have combated the problem for many years; engaging in an ongoing struggle against computer users that think it is “OK” to share and used unlicensed software, from Photoshop to Windows and beyond — many of which periodically “call home” for new updates, revealing the software’s installed location in the process.

Attorney Dan Pepper of the Pepper Law Group recently posted an article on his Technology Law blog (www.informationlaw.com) discussing the pain and expense of software audits, which have been steadily rising during the past decade.

The bottom line is that routine, periodic audits are the only way for software companies to ensure full payment for their intellectual property.

Pepper cites a Gartner report revealing that 61 percent of survey respondents say they were recently audited by at least one software company; with IBM, Adobe, Microsoft and Oracle, claiming the top spots for audits performed.

As for why a specific company might be targeted for an audit, Pepper says that it may be the result of a disgruntled employee acting out of revenge; a software vendor deciding that it was your turn; or perhaps a random audit by an IT compliance agency, such as the Business Software Alliance (BSA).

“The bottom line is that routine, periodic audits are the only way for software companies to ensure full payment for their intellectual property, and they are counted on as a new revenue source when new license revenue is decreasing,” Pepper explained. “Sooner or later, your company can be expected to be selected.”

Pepper says that many companies underestimate the risk of being singled-out and the consequences for non-compliance; and that software policy is not enough for protection.

“Beyond the direct financial costs involved, software audits also impact organizations by disrupting normal business operations, by drawing IT and executive personnel away from the needs of their customers,” Pepper continued. “The financial impact of an audit may include damage to an organization’s brand reputation, and can draw the attention of other software vendors seeking additional revenue.”

The Gartner report notes that if you answer “no” or “I don’t know” to questions such as “How long has it been since a meeting was held on contract compliance and asset management?” or “Does the enterprise have written procedures on software procurement processes?” and “How long has it been since a desktop audit was performed?” that your company presents a high risk of non-compliance with licensing requirements.

“If your company receives the dreaded letter from a software vendor demanding an audit, preparing an effective and comprehensive strategic response is vital,” Pepper concluded. “If your company has not yet received the dreaded letter, and you are at high risk of non-compliance, conducting a comprehensive review of your existing technology licensing agreements to determine the software vendor’s auditing rights is paramount.”

As dedicated as the online adult industry is to preserving intellectual property rights, it should have no problem in ensuring that it is authorized to use the software installed on the computers used to make and market its wares.

Related:  

Copyright © 2026 Adnet Media. All Rights Reserved. XBIZ is a trademark of Adnet Media.
Reproduction in whole or in part in any form or medium without express written permission is prohibited.

More Articles

trends

How Local Payments Can Expand Access and Reduce Friction at Checkout

Global adult platforms often enter new markets with a familiar assumption: If their checkout accepts major cards, they're ready for local customers. In reality, payment habits vary widely by country. Dutch consumers use iDEAL for online shopping, BLIK is a leading e-commerce payment method in Poland, and India's UPI handles billions of transactions each month.

Mitch Platt ·
opinion

How Detailed Receipts Build Consumer Trust and Reduce Chargeback

When was the last time you bought something online? Chances are you looked for the confirmation almost immediately. Did the transaction go through? Does it show what you bought? Were you charged correctly? And if there's a problem, who can you contact?

Cathy Beardsley ·
opinion

What Adult Platforms Should Know About the EU AI Act

The European Union's Artificial Intelligence Act is now largely in force, creating new obligations for adult platforms using AI for content creation, performer verification, age estimation, moderation and other functions.

Corey Silverstein ·
opinion

How Native Spanish Speakers Help Pleasure Brands Expand Across Latin America

Latin America's Spanish-speaking markets represent an exciting growth opportunity for the pleasure products industry. Across the region, conversations about sexual wellness are becoming more open, specialty retailers are expanding their assortments and shoppers are seeking products that reflect their lifestyles and values.

Rin Musick ·
opinion

Why Retail Expertise Is Essential When AI Tools Analyze Store Data

Somewhere in one of our stores, someone scanned a barcode into a quantity field. The number entered was 8,388,607. At $19.99 per unit, that made a single line item worth roughly $167 million. The number was so large that the import failed immediately.

Zondre Watson ·
profile

Vendo CEO Mitch Platt Reflects on 20 Years of Lessons and Evolution

More than 20 years ago, three entrepreneurs in Barcelona began gathering over beers to pitch, dissect and routinely destroy one another's business ideas. The ritual was simple: One person arrived with a concept, while the other two tried to expose every weakness. Any proposal that survived earned another look. Most did not.

Jackie Backman ·
opinion

How to Avoid the Hidden Risks of AI-Generated Legal Documents

Artificial intelligence can write a contract in seconds, but that does not mean it can write the contract your business actually needs. Across the adult industry, operators, creators and producers are increasingly using generative AI to prepare model releases, performer agreements, privacy policies, takedown notices, employment documents and responses to regulators. The appeal is obvious: Legal work is expensive, AI is fast and the resulting document often looks impressively professional. That polished appearance is exactly what makes the practice dangerous.

Corey Silverstein ·
opinion

How Rolling Reserves Affect Cash Flow and Merchant Stability

You log in to your payment processor’s dashboard, discover they are withholding 10% of your sales, and immediately assume something has gone wrong. In reality, everything is working exactly as intended.

Jonathan Corona ·
opinion

What Federal Age Verification Could Mean for Adult Websites

Our industry has grappled with a patchwork of confusing and burdensome state age verification laws for the past couple of years. But that landscape could change quickly after the House passed the Kids Internet and Digital Safety (KIDS) Act (H.R. 7757) by a vote of 267-117, marking a significant federal step into this space.

Lawrence G. Walters ·
opinion

The Website Footer Requirements Every Adult Merchant Should Know

Since I started in this business 25 years ago, I've watched website footers evolve from a simple collection of links designed to help with SEO into important tools for meeting compliance and regulatory requirements, improving the customer experience and reducing chargebacks.

Cathy Beardsley ·
Show More