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Software Piracy Will Get Worse
gollum123 writes "According to a study done by the Business Software Alliance (BSA) and research firm IDC, it is likely that software piracy will continue to expand as the Internet grows. Worldwide revenue loss due to software piracy was estimated at $33 billion for 2004 with about 1/3 of the software used being illegal. But within five years, that number could boom to two-thirds, with the value of pirated software nearing US$200 billion. Countries with the highest piracy rates were Vietnam, Ukraine, China, Zimbabwe and Indonesia while United States, New Zealand, Austria, Sweden and the United Kingdom had the lowest."
"software piracy will continue to expand as the Internet grows"
3 49249
In other news, the porn industry is getting larger as the Internet grows as well.
Web attacks are on the rise too.
http://slashdot.org/comments.pl?sid=147388&cid=12
Increased Users = Increased Users (for good or bad)
Is this news?
The question should be "Has software piracy increased disproportionately to Internet User growth?
I don't know.
It could be worse, it could be Monday.
"Vietnam, Ukraine, China, Zimbabwe and Indonesia"
How much of the software they can claim is pirated there is actually available there?
I'm more than a little tired of hearing how much the recording and software industries THINK they're losing. They don't know.
Defecation occurs.
It is quite simple...people are tired of getting screwed for rediculously high prices for inferrior software. This is where I see Linux and Open Source being key. If we can convince people that rather than running the risk of getting caught, why not switch to a software package that will do what you want, and not put you at risk for licensing fines, etc.
I'm not a troll, but I play one on Slashdot.
There will always be "piracy". It's just how we think of things. Our world is so cought up on what's mine and what's his, when it coems down to it. We are all dead. Give it a few hundred years, and your life won't mean anything. How much you bitched about piracy will be nonexisitant and the only people that will survive are the ones that: a) Get off this planet and learn to survive in space. b) Ones who steal Bill Gates money and refer to a). Our world is so selfish, we take so long deciding who's what's, that we slow progress down, and actually think we are civilized enough to legislate progress I love my pesimistic views at the moment.
$sig$
I think the United States is much lower probably because of companies like Dell. If everyone would put their computer together nobody would want to spend an extra $200 for an OS where that money could go for a new video card. I wonder how much smaller MS' revenue would be if the norm for purchasing computers would be through parts (just theoretical, I know that wouldn't happen because it'd be too much fo a hassle for joe sixpack).
:) Use Open Source! :D
Also, I know of one great way to battle piracy.
* note, I am not advocating software piracy. My intention is to counter this FUD. When will they do a study about all the revenue *gained* from software piracy? I'm sure there are many millions of people who would not have the skills they have today had they not pirated copies of Photoshop, Window 2000 Server, MS Office, etc. ... and yes, there are open source alternatives, but they aren't common in the business world today. If piracy totally stopped, its likely that all of these millions would be forced to use open source applications and all but the most specialized commercial software would cease to exist.
I got an idea, lets make up some numbers ! " Worldwide revenue loss due to software piracy was estimated at $33 billion for 2004. " Ok ok .. the software is ILLEGAL, so um, how did you come up with this number ? Out of thin air ? Seriously does anyone question how they pretend to arrive at such statistics ?
Do they run some anony web site were all the illegal users can come click radio buttons and check boxes to indicate the amount of illegal software they have ? Because, without any REAL way to show how you did your fact finding, I think your FULL OF SHIT.
Plus, if these people had no other option how are we to know that they wouldn't go with a FREE alternative ?
But , this is not science - JUST GUESSING.
Have a stuper day,
me
"Freedom and Justice for All" is a registered trademark of The United States Govt Inc. Not available in all areas.
This is a common theme for music and film dowloads, but in software, not as likely I would think. I know of many who have ms office at home for example, but they only have it because they got it from someone.
They never use it, and most of these people don't know how to begin to use Access for example. The chances that these people would actually buy such programs are remote.
Funny, the numbers finding that piracy is low in Sweden, that's not what we hear from our local BSA (and the media industry in the form of antipiratbyrån). Considering that Personal Computers are abundant, Broadband service (both fiber and *DSL) readily available, and that Marketing forces mark up stuff in the swedish market (you can easily find for example MS Office 30% off if you buy it from the US), I wonder if those numbers are correct.
"If it can be thought up, there exists at least one person trying to make it happen for real" - Phil
In most of those countries at the top of the list, the cost of windows is about a month's salary. Let's not talk about other 'useful' stuff, like office, photoshop, etc,etc... Those of you too happy to pay for the next version of anything, ask yourselves this... if an OS or office app cost $2,000, would you still buy it, or look to alternative means of aquisition?
The Digital Couture Collection
The most commonly copied software I hear about are.
1. Windos OS of the month
2. microsoft office
3. Adobe Photoshop
Why? because they are all way over priced, and have acceptable free alternatives. If software is priced properly then it is not worth searching through the virus and bug ridden back alleys of warez looking for the latest version. The free versions aren't used by as many people because there is a percieved lack of quality in them.
(I said percieved. I used open office in 2001 and it was good except the spread sheet program didn't do curve fits worth a damn. That feature is important to me so I bought Office)
I used to have a cool sig, back when I cared
Zimbabwe barely has food enough to feed it's populance, who number such a small amount ?
Well, I don't know what they are using the software for - possibly to figure out how to share 1 bag of maize between 5000 people ?
South Africa maybe definately, but please, Zimbabwe ?
Really, the Zim Dollar exchange is Z$15 000 to a US dollar !
If they are pirating software, it's because a copy of windows would cost them the equivalent of 20 years salary !
Surely this is a mistake in the article ?
A slashdotting - you get the stick first and then the carrot !
[humor]
Sure, they don't get $megabucks/license but the end-users couldn't afford to pay anyways.
Think of how much they are saving in CD-manufacturing-and-distribution and software-support costs.
[/humor]
Seriously, software piracy IS a problem just like any other piracy, but the "lost revenue" figures aren't very meaningful, what counts is lost profit in a world that is otherwise-equal but where those who pirate instead pay for a license or do without that particular product. If every third-world MS-Office pirate went legit, destroyed their bootleg copies of MS-Office, and switched to OpenOffice today, Microsoft's increased revenue would be $0, or perhaps negative as the Gospel of OpenOffice spread and existing customers Saw The Light.
Knowledge is how to play a game, intelligence is how to win, wisdom is knowing what game to play.
I think software businesses need to go back to basic economics: the value of non-scarce resources is very low. I think that the only way for the software industry to remain viable is not to be strict on piracy but become a service industry: we will write programs and support it for a fee. Basically this means anyone can use the software, but new software won't be written and existing software won't be supported without payment. Because the actual executing code isn't scarce, it has very little value: the value is in creating that software and keeping it running.
This is very similar to the *IAA issues: the value isn't in the distribution of the art, but in the experience of listening to it and having new music created. This is why I think that software isn't a "real" commodity but a service. (Also why I think information should not be property - information is not 'scarce' and so cannot be effectively managed using concepts of property. There might be another way to manage it, but it's not with property protection laws).
Anyway, I could go on, but the fundamental thing here is that "unrealised sales" is not equivalent to "lost revenue". Lost revenue is simply poor accounting or "we got less than we did before". The software industry, even if piracy increases, will probably still continue to post revenue gains. So their complaint is "we won't have high enough revenue gains" not "we will have revenue contraction".
"There are a dozen opinions on a matter until you know the truth. Then there is only one." - CS Lewis (paraprhase)
Let's reverse the metric a little bit, and talk about the value of some of these products versus the cost. What in the new version of photoshop or word is really worth paying the full price of the upgrade. I don't think that the consumer really finds most of this stuff worth it. People are pirating this software because it's the new version and it doesn't cost anything. In other words, the value of Office 2003 over Office 97 to regular customers is way below the cost.
Go ahead BSA combat piracy. I think you'll find that, at the end of the day, the same sales you're claiming to lose to piracy would have been lost at the cash register anyway.
like anyone in the UK is gonna admit they use pirate software
RingRing
BSA: hello its the BSA, do you use pirate software ?
Company: no sorry, cant help you
BSA: ok thanks, bye
The argument I always heard for why Photoshop is $700 was because of all the piracy.
Baloney. Photoshop is $700 because they've got the screws to the design industry and can get away with that price. Photoshop is used by almost everyone doing professional work with digital pictures. The people that use it know how to use it very well and don't want to switch to another tool of unknown quality (and have to re-learn how to do everything).
It isn't a commodity product needed by low paid secretaries like Word, it's a product of usually well paid professionals, and companies are willing to spend more on those people because it'll wind up saving them more if they get just a few more hours productivity out of them. Furthermore because it's not a commodity product, there's a much smaller market for it than Word/Office. Almost everyone needs an office product, but not many need a super-fancy photo editing program. I get along just fine with Gimp, and have no need at all for Photoshop. Of course I also am not a designer, I just do some occasional photo editing a few random purposes.
AccountKiller
Well, China and Vietnam are not produceing any software, right?
I would like to point out that it is rather difficult (if not impossible) to get even a remotely accurate idea of how much is lost due to piracy. You have to consider it on an individual level - what would happen if piracy did not exist?
We take a person who pirated say Adobe Photoshop to use to design art for his personal website. That's considered a loss for the Adobe. But the question is, if this person was not able to find a single illegal copy of Photoshop to download, is there a possibility of purchasing the software legally? From here there are two points - either yes, in which case we conclude that piracy cancelled out the possibility of obtaining the product legally causing the company to lose money. Or, if the answer is no, then the company lost absolutely nothing. If the possibility of purchasing a product does not exist, with or without piracy, then it is impossible to conclude that piracy is responsible for lost income. In this situation, the company looses nothing, but the individual gains a benefit he would not have had without piracy.
I am by no means trying to justify what is going on, but all I'm saying is that it's not so simple to say that when someone downloads software worth a few thousand dollars, that the company making that software lost a lot of money. Far more complicated than that.
It's like living in a world where food costs $50 per meal, and then when people begin to grow their own food in their own gardens, the revenue lost to farmers is extraordinary!
Of course, if food didn't cost that much, maybe poor people would be able to afford paying for it instead of sitting on our streets begging for money.
If you sell 5 handbags at $5,000 a piece, you make $25k revenue and pay very little for expenses. If you sell 5000 handbags at $5 a piece, you do a lot of work and notice less profit (more materials, more labor cost, same revenue, less profit). Of course, this leaves plenty of people without handbags, which doesn't matter for handbags, but the market works the same way for other products.
How do we have people starving in our country, while our government gives our farming industry subsidies to stay alive, and STILL manage to destroy surplus food?? Not that this has anything to do with the topic of course.
The "value" of pirated software is much lower than that. If you talk about "value" you kind of assume you'd be able to sell the same software to the same people for your MSRP. This just ain't so. The populace some of the listed countries is ridiculously poor. They aren't going to pay half a year's salary for office after spending their life's savings on a low-end PC.
There's no excuse for the Western countries, though. As ridiculous as it sounds, by pirating software made by large corporations you're helping those corporations to stay in the business. You see, you could have used alternatives and supported the people behind those alternatives. This would in turn generate competition and drive the prices down and quality up.
It is the same thing we do in copyright-infringement research (e.g. movie/music piracy, though I refuse to title my articles as such). Most of the research that is done by the BSA, American Life Project, and even the MPAA uses a prediction model that takes year Y, applies the growth prediction, and then evaluates the difference in year X.
The sad fact is that the difference in Year X becomes written off as piracy or copyright-infringement and not the less obvious issues of inflation and less consumer confidence. At a recent ACJS conference I pointed out a severe flaw in a colleagues research that noted that the increase in movie-piracy (hate the term) is a direct result of the increase in Broadband connections. The results of my research shows that yes a broadband connection facilitates the behavior. However, the behavior has to be reinforced and first introduced. In all the research I have done on the subject, less then 11% of subject reported that they purchased a broadband connection to commit copyright infringement.
An interesting fact for those that reported this was that 75% did so because of friends but about 15% did so because of the actual commercial that showed individuals downloading music and video. My current research project is looking at how commercial products and advertisements facilitate in a person engaging in copyright-infringement.
This whole "study" is bullshit. The figures are made up from wind. To give an example: you might be interested in knowing that open-source software is counted as pirated (since it was not purchased). A more complete analysis can be found on: http://chosechu.blogspot.com/
If piracy continues to increase for years on end, companies are going to start wondering what they are getting for the money they pay the BSA. After all, their job is to combat piracy, and reports like this show that they are failing at their job. If piracy never turns down, software companies will take their anti-piracy dollars elsewhere (or change strategy entirely).