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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."
BSA is the 'BS' Association.
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But I thought "trustworthy" was one of the parts of the scout law! Was I mistaken? Is there some sort of mix-up here?
I'm so disillusioned just now...
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.
We all know that their method of determining loss is flawed. Let's say I'd like to play with a program called A, I don't really need it in my business or at home, but it looks nice and maybe I'd use a part of it once. I would never have bought program A at $499 for a one time use and to play around with. I rather download it from somewhere and install it. This would count as a loss of $499 but this is flawed. I would never have bought the program in the first place if I had not gotten it from the net. Why? I can't defend spending $499 on a program I have virtually no use for.
If you mod me down, I *will* introduce you to my sister!
If you prove the antipiracy studies' use of bogus assumptions, the pirates WIN!
You're looking for quotes? See my journal.
if all those people couldn't have found a .torrent of photoshop cs 2, i'm sure they would have bought it...
The Economist has blown the lid off the BSA's recent report on software piracy, referring to their methods as 'BS'.
BSA = 'BS' Analysis ?
I have discovered a truly marvelous proof of killer sig, which this margin is too narrow to contain.
Boy these people's heads are stuck so far up their asses that they can see through their mouths... you just can't make this stuff up.
Dissolve... Resolve... Evolve...
It would be interesting to see a real estimate of the 'costs' of piracy, compared to the benefits companies reap from their products being pirated. It would be extremely difficult to accurately measure, but I bet the results would be that piracy just doesn't cost that much.
:)
Not that I in any way condone piracy
The economist is refusing connexion with Slashdot as referer. Simply copy/paste the link in a new tab.
I have discovered a truly marvelous proof of killer sig, which this margin is too narrow to contain.
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.
1. The general public who uses "pirated" software wouldn't have bought it anyways, hence there's no loss of income. Moreover, they pretty much act as free beta testers.
2. Most companies who use commercial software do pay the licensing fees, so no loss of income. However, companies that decide to switch to cheaper, possibly opensource solutions are in fact loss of income for the software vendors. Nonetheless, switches like this are completely legal. So again, no loss of income due to illegal actions.
The BSA is full of it.
Those who use pirated software wouldn't have bought it anyways and even if forced (as in bigbrother) to not use a certain piece of software without paying, they would have found alternative applications and still not pay up.
Those who do pay are getting fed up with the EULAs, crappy software and prices then turn to cheaper alternatives.
^_^
actually, the Boy Scouts of Hong Kong are now being encouraged to become anti-pirates:
and now back to the fallout shelter...
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...
The people (guess Who) that paid for that report got the report that they want. Just what is new about that.
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"!
It's kind of weird that all copyright/piracy/P2P articles show up in the "patents" section,
So, if there's 3,000,000 people with an operating system, but our members have only sold 2,000,000, that's 1,000,000 pirated copies of our member's operating systems! Call the police/FBI/attack-squads!!!
Surely that can't be how they work it out. Anyone ever had one of these IDC surveys? How specific are they, would they allow them to filter out software by publisher/developer so that for instance GIMP and Photoshop don't both show up as "Graphics Tools"? If not, that means every copy of GIMP would be a loss to Adobe!
(Note - it wouldn't surprise me if that is exactly how it works, and that it was entirely deliberate, but that's a different matter...)
Game dev and music blog
... some Microsoft (related?) sales person calls my company and asks me about any plans for upgrading to whatever it is they are trying to sell at that moment. I get the pleasure of stating, "we're attempting to reduce our use of Microsoft software" and when asked, I explain that the BSA audit our company went through some years ago soured many people on Microsoft so badly that we're steadily seeking alternatives.
It's not a full or heavy press at the moment, but I believe there will be a day...
A company I worked for went through a BSA audit including Microsoft Office among others. When figuring their "penalty" for office, they used a 2x multiplier on retail cost. Of course they did it seperately for a full copy of Word, Excel, Powerpoint, etc... making each copy of Office to be $2400.
Oh come on, like this is even a believable article! Next they'll tell us the RIAA inflates their claims in the same fashion!
MoM++ - A Classic Expanded - [Master of Magic 1.5]
http://mompp.sourceforge.net/
BSA or just BS?
May 19th 2005
From The Economist print edition
Software theft is bad; so is misstating the evidence
IT SOUNDS too bad to be true; but, then, it might not be true. Up to 35% of all PC software installed in 2004 was pirated, resulting in a staggering $33 billion loss to the industry, according to an annual study released this week by the Business Software Alliance (BSA), a trade association and lobby group.
Such jaw-dropping figures are regularly cited in government documents and used to justify new laws and tough penalties for pirates--this month in Britain, for example, two people convicted of piracy got lengthy prison sentences, even though they had not sought to earn money. The BSA provided its data. The judge chose to describe the effects of piracy as nothing less than "catastrophic".
Intellectual property
But while the losses due to software copyright violations are large and serious, the crime is certainly not as costly as the BSA portrays. The association's figures rely on sample data that may not be representative, assumptions about the average amount of software on PCs and, for some countries, guesses rather than hard data. Moreover, the figures are presented in an exaggerated way by the BSA and International Data Corporation (IDC), a research firm that conducts the study. They dubiously presume that each piece of software pirated equals a direct loss of revenue to software firms.
To derive its piracy rate, IDC estimates the average amount of software that is installed on a PC per country, using data from surveys, interviews and other studies. That figure is then reduced by the known quantity of software sold per country--a calculation in which IDC specialises. The result: a (supposed) amount of piracy per country. Multiplying that figure by the revenue from legitimate sales thus yields the retail value of the unpaid-for software. This, IDC and BSA claim, equals the amount of lost revenue.
The problem is that the economic impact of global software piracy is far harder to calculate. Some academics have shown that some piracy actually increases software sales, by introducing products to people who would not otherwise become customers. Indeed, Bill Gates chirped in the 1990s that piracy in China was useful to Microsoft, because once the nation was hooked, the software giant would eventually figure out a way to monetise the trend. (Lately Microsoft has kept quiet on this issue.)
The BSA's bold claims are surprising, given that last year the group was severely criticised for inflating its figures to suit its political aims. "Absurd on its face" and "patently obscene" is how Gary Shapiro, boss of the Consumer Electronics Association, another lobby group, describes the new ranking.
Gollum Not fair! It isn't fair, my precious, is it, to ask us what it's got in its nassty little PeeCeessssssesss?
Bilbo What have I got in my pocket?
Gollum Sssssss. It must give us three guesseses, my preciouss-three guesseses.
Bilbo Very well! Guess away!
Gollum Photoshop!
Bilbo Wrong! Guess again!
Gollum Sssssss. Autocad!
Bilbo Wrong! Last guess!
Gollum Sssssss
Bilbo Time's up!
Gollum DOOMIII!-or nothing!
BilboBoth wrong!
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
You've just gotta love Brazil's response:
"We're against software piracy. We believe Microsoft's rights should be respected. And the simplest way to respect their rights is for Brazilians everywhere to switch to free software."
IANAA(ccountant) or an economist, but with all these studies showing that the BSA is wrong or that the Microsoft studies are wrong, and all the controversy surrounding them, isn't there a standard way of conducting these things so that we can have one answer once and for all?
That's not to say we only need one study. If a study is independently backed up by others, then wouldn't we know the real effects of piracy?
Not every pirated copy of an app equates to a 'lost' sale. We know that. But how are we going to convince companies that anti copy protection is 'evil' - after all - what do they really have to lose by preventing unauthorized use? Does 'try before you buy' factor in so much in the modern internet informed/magazine review/word-of-mouth saturated world? Really? Does it? We all know marketing hype works - if all that they need to rely on is that to generate sales then let me re-iterate. What have they got to lose?
About 15 years ago, I lived in the Nasa area south of Houston for a few years.
One day I was in a computer store near NASA looking for a software package, but they were all sold out. When I asked why, the salesman said that every time any of the local NASA contractors had a software audit, everyone would rush out to buy legal copies of everything on their machines.
Somebody alert Penn and Teller!
Liberals call everyone Nazis yet they are the closest thing to it.
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.
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!
Yes it is. In the time they spent balancing your wheels, they were unable to do other revenue-earning work. The time and effort involved here is a finite resource. This is in contrast to software, where copies can be made without using up the original.
Your example is more like walking into a shop, and stealing the CDs from the shelves without paying for them; this really does represent a lost sale, as the shop will no longer be able to sell those CDs. I doubt this is anywhere near as common as the "piracy" that the likes of the BSA are making a fuss about.
While we're at it, do any of you want to admit to smoking pot, snorting coke, distributing a virus, or murdering a hooker? :-)
Start a happiness pandemic
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.
That's not what they're measuring according to the article. They're measuring how much software should be sold per unit computer. So by me using Linux and the GIMP instead of Windows and Photoshop I count as two pirated pieces of software. They're wholesale making numbers up.
The BSA's fraudulent activities cost Linus Torvalds over $300 billion dollars yearly in the United States alone.
Their bogus numbers have caused people to be frightened away from Linux, which Linus *could* potentially be selling for $1000. The fact that he is making *no money* from each copy of Linux used is due to the fact that the BSA has damaged the perception of Linux so much. As a product technically superior to Windows, it should have taken over by now. That's $1000 per person. There are ~300 million people in the United States, counting every man, woman, and child. (We all know that GNOME is simple enough for a baby to use, so counting babies is perfectly legitimate.) Since Linux is upgraded so frequently, people would buy a new copy about annually.
As you can see, since the BSA is COSTING LINUS TORVALDS OVER $300 BILLION DOLLARS IN THE UNITED STATES THIS YEAR ALONE, we desperately need laws to protect the starving open source software authors that are being victimized by the criminal activity of the BSA. It is crucial that we receive laws to protect these authors -- all companies choosing a non-open-source software product over an open-source software product should be required to annually submit a report with cost estimates and associated usability/compatibility testing as to why they choose not to use open source software.
No, it's just not the same. We need whatever PR people the BSA has.
Any program relying on (nontrivial) preemptive multithreading will be buggy.
Well thats the exact point. The BSA is nothing more than a lobbying organization formed to help push forward an agenda that benefits software developement, both politically and financially. And of course like all Lobbiests, they're figures are slanted heavily by design to get their agenda made into law.
Really it has little to do with software piracy. It has more to do with getting the power of LAW to help raise the cost of software, or atleast maintain it.
I'm still a firm beleiver that if Microsoft sold Office (the full version, bells whistles and all) for $50. Office would HARDLY ever be pirated. It would only perhaps be pirated by younger people such as teens.
Same thing with Photoshop. There are so many pirated copies of Photoshop installed accross the country. If Adobe wants to truly bring in money they would sell it for a fair price such as $50 and they would get so much money in return. They would profit more than they are now. They would not be losing sales to Piracy etc.
Look at videogames. Yes Kids tend to pirate games because they run through them like cheap cookies... But the game industry is very successful with their $50 price for software.
They make a lot of money.
Really the trick is getting people to pony up $50 each year or 2 for a new version of the software. Frankly i dont see that as a problem because people do it now for $300, to $8000 software.
Give people a fair price, and Piracy will deminish. The software companies will sell more units, at a fair price, and benefit from greater profit.
The BSA has so little to do with piracy, other than busting and auditing people. And I see nothing wrong with that, as long as they're fair and honest with their numbers, their penalties and so forth. But clearly they're not because they have an agenda like all lobbiests.
The problem as numerous others have mentioned, is that the BSA number doesn't take into account freeware, twice. The influence of freeware increases their numbers on two occassions. First, in determining the average number of programs on a computer, and second, they do not factor in freeware in the average price of software. If the first problem was alleviated, the second would become irrelevant, but as it stands now, both are compounding to create terribly inaccurate numbers.
What constitutes fair price for a block of code in a free market? What, truly, is the worth of a piece of software? When it comes down to it, a software company publishing a piece of software is much like an author publishing a book online or a composer creating a song - they are selling an idea, not a physical object that requires resources to duplicate or a service that requires people to perform it. People tend to make comparisons for the sake of expediency between pieces of software and services that require human power or products that require physical resources.
When someone downloads a piece of software they didn't pay for using something like bittorrent, there is absolutely no direct cost to the software company. Consider for comparison stealing a tool from a hardware store and driving away from an auto-shop without paying for the repair service. In the first case, the company that made the tool and all the people that formed the transportation bridge to get that tool to the store suffer a direct loss. They had to physically create something and physically transport it, and that requires resources. In the case of the auto repair, you've just cost some poor smuck an hour or so of his time - he was repairing your car. If he doesn't get anything back from his efforts because you cheated him, you've stolen his time.
Now for the software company. They researched and designed something, and in the end engineered a piece of software that acts as a tool on your computer to produce something you want. But when you download the tool from someone illegally over something like bittorrent, what are you taking from the software company? You duplicated the code for a total cost of $0. They didn't expend effort creating a CD and shipping it into a store - you haven't even stolen the transport cost. There's no physical object being stolen - they don't require anything to create more copies of the code. In fact, you could continue pirating the software from them left right and center, and outnumber their actual product sales by 10 to 1, and it wouldn't hurt their product sales at all. It makes no difference to Adobe if I download one illegal copy of PhotoShop or twenty million illegal copies of PhotoShop. Twenty million times zero is still zero. The only argument they can pose for my actions costing them something is that they have a legal right to demand any sum of money they choose from you when you use their software, and because you bypassed their right you cost them the money you would otherwise have been forced to spend.
In a capitalist society we need to reimburse people reasonably for the time and effort it takes to think up new ideas, and for the time the software companies spend creating their software - otherwise one could argue that we wouldn't get any new ideas or software developed. Because of this, we created copyright law. Copyright law is designed to allow people to profit from their ideas by giving them rights over how people use that idea, and the right to take money from people who use their idea.
Reasonably, however, if a mathematician designs a new formula that revolutionizes computers and allows circuits built using his idea to operate 500 times faster than they do today, it seems a little unreasonable for the mathematician to demand that every single computer made using his idea pay him a royalty of US $5,000,000. In a similar way, is it reasonable to permit software companies to charge whatever sum they feel for a piece of code that in the end is nothing more than an idea? The code is well thought out, and complicated, and took time to make. Yes, society should compensate them for that. Yes, people who spend their time working this way should be well compensated for their efforts and be made wealthy. But there should be a limit as to what they can demand, and that limit is set by unspoken public consensus if not in our legal system. That unspoken limit being surpassed is what results in software piracy. When the average person who w
This is probably exactly why many development firms release educational versions of their software for noncommercial use. VS 2003 Academic costs $99 at my school bookstore. I suspect that many pirates would gladly prefer a company that releases a free or cheap version over pirating an expensive one. Many game developers and mod writers use gmax over Maya, because its free - and this turns over into 3DSMax sales when these hackers get themselves hired.
I suspect that free educational versions is the way of the future... give it 15 more years for the corperations to catch up with common sense.
This sig is false.
Fact is, this is one of the many symptoms of trying to make the software industry fit into the mold of a regular industrial industry. It's like shoving a square peg into a round hole. But that's what happens when you let old people, with old ideas, using old systems run the world. Perhaps we should enforce mandatory retirement by 40?
Linux sucks. And you're fat. Take a shower hippy.
I've never worked for a company that suffered through a BSA audit, but does anyone know what it is that makes a corporation roll over and allow such a thing to happen? I keep hearing about how they inflate the cost of any "pirated" software they discover to ridiculous proportions, and we've all heard their TV and radio commercials, "Remember! It just takes one disgruntled employee!" Does it? And what, exactly, is it? Do they threaten businesses with frivolous, expensive lawsuits to get them to comply?
The higher the technology, the sharper that two-edged sword.
take 535 parts people who are largely technology ignorant and in need of money for re-elections...
take 2 easily "convinced" people, one in either party*
take 5 organizations with lots of money and lawyers...
mix and get an endless slew of consumder unfriendly laws.
* Senetors Hatch and Lehey...
I believe sex is highly over rated... unless it involves me
The higher the price, the less demand there is. At retail price (high) you would have I = p1*q1 = big*small, with piracy (low) you have I = p2*q2 = small*big. That is the maximum the market will ever pay you. But to calculate losses, they take p1*q2 = big*big.
Also, as a special case, for free the pack rat mentality kicks in. If you got a cd full of mp3s, would you keep it even if it wasn't really anything you need? Many people would, just a few hundred MB on their HDD. Instead of asking "Why should I pay for this?" the question becomes "Why not? It's free, might come in handy some day."
Kjella
Live today, because you never know what tomorrow brings
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.