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BSA Piracy Study Deeply Flawed
zbik writes "Corante reports that The Economist has blown the lid off the BSA's recent report on software piracy (covered by Slashdot), referring to their methods as 'BS'.
'They dubiously presume that each piece of software pirated equals a direct loss of revenue to software firms.' The BSA has complained that the article is offensive but does not dispute their analysis. Score one for common sense."
For any company confident enough to claims they have lost 100,000 copies in revenue. They need to also claim they have increased their market share by 100,000 users.
Much as we might laugh at the BSA's (don't they make guns and motorcycles?) figures, illegal software distribution (I refuse to call it piracy until is bad for open source. Every low budget company that copies top-of-the-line software that it can't afford is the loss of another business that might be persuaded at the cost efficiency of a Free Software solution.
Athletic Scholarships to universities make as much sense as academic scholarships to sports teams.
Just about every piece of software that I use professionally now - Photoshop, Visual Studio, Oracle, SQL Server, NT Server, Netware - I pirated as a teen. I probably wouldn't have learned them otherwise. What is wouldn't - not couldn't.
Now that I am gainfully employed, I am very vigilant about making sure that my employers always keep me equipped with the very latest versions of them all, even if I don't use them.
I'm not saying that what I did as a teen was right, but I know for a fact that a few pirated copies in 1996-1999 have resulted in thousands of dollars in purchases over the past 6 years or so.
Dissolve... Resolve... Evolve...
Just ask Microsoft -- if not for so many pirated copies of Windows all over the world they would have lost market share to Linux or something else. They just settled a piracy dispute with the government of Thailand. THOUSANDS of government computers had pirated copies of Windows and Thailand settled with Microsoft for $1 per computer. The last time I checked on NewEgg.com, an OEM copy of WindowsXP Pro costs $140. Therefore, it's worth $139 / machine to Microsoft to make sure Linux is *not* installed...
No reasonable person is arguing that you shouldn't pay for software. The argument is simply that not paying for software doesn't always hurt the company that makes the software. That doesn't make it right. That doesn't make it legal. But, when some 15 year old pirates a copy of Oracle, the company hasn't lost any money.
The people (guess Who) that paid for that report got the report that they want. Just what is new about that.
it's all about elasiticity. anyone who has taken a 100-level course in economics (as have apparently the editors of "the economist". big surprise there) should know. a quick rundown is here:
http://www.quickmba.com/econ/micro/elas/ped.shtml
most software is highly elastic to most people. playing with this or that nifty piece of software may be fun for an hour or afternoon but unless it's a killer app, they would, given the choice, opt to not use the program rather than pay.
it's like the classic example of the pay-for park. a hundred people go to the park on a sunday afternoon, so a government beurocrate determines that if the city charges a $10 admission, the profit will be $1000 every sunday. the toll gates go up but, to the surprise of the beurocrat, nobody shows up to buy a ticket.
2 1337 4 u!
They estimate the amount of software on each PC and then subtract sales revenues. What is left is pirated software? Talk about a loophole in their logic! Based on their logic, any piece of freeware that is installed on a computer is revenue that BSA considers lost.
Though if you consider who is partners with the BSA, it's not surprising they'd consider Linux and Openoffice to be "warez"!
Let's debunk a few myths:
1)"I wouldn't have paid for it anyway, so it's not a lost sale"
OK, so let's say I go in to get my car's wheels rebalanced (or some other service). When they're done.. I just drive off without paying. Have I done anything wrong? Well, what if "I wouldn't have paid for it anyway"? So it's not a lost sale!
Umm, what the hell? That made zero, and by zero I mean none, sense. The analogy is too terrible to even examine.
2) "The software is too expensive"
So perhaps you wouldn't buy product A which is overpriced for your needs. But by pirating A, you rob product B and C - competing products that are much cheaper with limited functionality compared to A that still meet your needs - of market share.
Now here I can only conlude it should be illegal to buy any software at all, for everytime you do so you are depriving any computer of companies of revenue. I suggest you write your senator right away and demand that all software sales be outlawed on these grounds.
The fact is, if you don't pay for the software (unless a license is given for free), then you have no right to use the software. Period.
Now that part I agree with. You have no right. What is in question is how much harm it does, which depends entirely on the circumstances of the pirating and cannot be assigned a simple number. If a baby is given a pirated copy of Photoshop for teething is that really a loss to Adobe of $600? Please justify a yes response. The BSA would say yes.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
Nope, that's exactly how they work it out. Download and read their "study" yourself (the methodology section is toward the back). Their "piracy" estimates are based on nothing more than wild guesses as to how many copies "should" have sold, given the number of computers out there.
Then, just for fun, they turn around and claim to their shareholders that sales exceeded expectations. Well, which is it, Chucko? Either you sold less than you anticipated (inflating the "piracy" figures), or you sold more (inflating your stock price). Either way, your market projections are way off.
Schwab
Editor, A1-AAA AmeriCaptions
The BSA, what a bunch of jokers. They go around claiming that SW piracy does the SW industry this incredible injustice...
Well, it's funny that you can hardly find anyone in the SW industry who agrees, who actually know something about SW, like artists and programmers for example. It's only executives who aren't very technical and don't actually understand or use much who claim they're losing vast sums to piracy.
Want to know who pirates SW the most? People who make SW, and people who ultimately drive purchases of the most expensive SW for business and personal use. I've decided purchases of software selling for up to $16K per seat for entire teams in companies I've worked for, and it all went to staff members who were largely able to use it because they had learned to various degrees on pirated copies.
If it wasn't for SW piracy, far fewer people would be software expert users and the SW industry would be much smaller than it is. As a result, fewer PC computers would be sold, and we'd generally have a less computationally advanced society. That would obviously effect industries like the internet including commerce, movie special FX, and video game development, which are big economic drivers for the national economy.
Take Photoshop for example, that ubiquitous paint program. In my entire career I've never met a single Photoshop user, NOT ONE, that didn't sometimes use, and hadn't learned primarily on a pirated copy before becoming employed at a business that would purchase it to match their skills. Many of those people became interested in the field, and THEN went to school for training, because of the ability to try extensively for free. No trial programs don't suffice and never have. Reality is that every single art student has, and needs, a cracked copy. Later, studios buy software to match the preferences of the users, whose opinions are often based on use of pirated SW.
*** SW "piracy" = free advertising = increased market growth. ***
You can say the same for movie FX, or game development. Try and find people in those industries who don't give a large credit in their education to pirated software, or who would be less likely to be in the industry, and therefore not purchasing SW, if it wasn't for piracy. It's the same for many other industries. Even many secretaries and business software users have had access to pirated software to learn it, give it to friends, etc, which eventually supports a purchase in SW, and is like free advertising for the SW makers.
If it was possible to magically end all piracy in the US today, you'd see SW revenue and computer sales plummet in the short term, and overall national competitiveness drop in the long term.
These BSA bozos really do have their heads DEEP up their asses.
Companies like Adobe for example should be THANKING SW piracy for thier stock price.
Software piracy
SIR - Your article on software piracy was extreme, misleading and irresponsible ("BSA or just BS?", May 21st). The headline was particularly offensive. The implication that an industry would purposely inflate the rate of piracy and its impact to suit its political aims is ridiculous. The problem is real and needs no exaggeration.
What an amusing little letter from an organization such as BSA.
extreme, misleading and irresponsible
Fine, enlighten us then- what is so "BS" about it, any proof/evidence?
The headline was particularly offensive.
W00t, let's go after the title, not the actual story itself! Attack the title to create an impression! Yes that's the way to win an arguement.
The implication that an industry would purposely inflate the rate of piracy and its impact to suit its political aims is ridiculous.
I don't see why not. Wow, I am really speechless. Fine, if you want to accuse the E of slendering, provide evidence that would uphold in a court battle.
The problem is real and needs no exaggeration.
So is your logic apparently.
Jesus, I can't believe the government is delegating the enforcement power to these idiots. This stuff looks as if it had been pass thru the random complain letter generator.
They should just hire me- even I can do better than that.
As someone who leans libertarian on a lot of issues, I find it sad that the Republican party has bought its power by aligning itself with social conservatives who seem intent on legislating morality.
It's my belief that they've done so because the leadership knows full well that such laws would never apply to them or their families. If they want to have sex with hookers, use cocaine or have abortions, they have the means to safely do so in a way that won't bring them into contact with the authorities. It's only the poor who have to abide by these laws. Hell, a cokehead alcoholic can get pretty far these days with the right connections.
The BSA (and a few others) are basically arguing that if some Chinese kid got a copy of AutoCAD or 3DSMax, that's a lost sale and it litterally means some $6000 lost. Can they possibly present a coherent business plan where it's even possible to enlarge that market there, at those prices, if piracy didn't exist?
Hello? An average Chinese family's yearly income, last I've checked, is around the $1500 mark. That is, before, food, clothes, rent, etc.
Take your current yearly salary, multiply it by 4, and ask yourself if you would _ever_ pay that much for a piece of software you don't even really need. Would you?
Some of that software waved around by the BSA as big losses even I wouldn't buy on a western european salary, and I could afford it easily. E.g., would I pay some thousands of dollars on 3DS Max just to mod a $40 game like "X2 - The Threat"? Because that's the kind of use those pirate kids see out of that software. Heh. Would you? Right. That's what I thought too.
A polar bear is a cartesian bear after a coordinate transform.