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Software Industry Shifting Piracy Strategy
Sensible Clod writes "The U.S. software industry's strategy against global software piracy is shifting to focus on claimed economic benefits of copyright protection in response to a new study released by the BSA, according to an article at Internet News. The study concluded that countries with high software piracy rates have more to gain economically by protecting intellectual property rights. The study even claims potential global gains of '2.4 million new jobs, $400 billion in economic growth and $67 billion in new tax revenues' by cutting the current global software piracy rate of 35% by 10%."
What on earth is the "rate" of software piracy? This sounds awfully like more mystical math from an industry with a lot of motivation to deceive.
I'd love to know how software piracy hurts software vendors without spin put on it. Lately I tried a rom of Final fantasy Tactics Advance. On Monday I'll be going into the local game shop to purchase it. I've done this countless times on games I wouldn't have played other wise. So for every game I randomly downloaded and enjoyed I've added a sale. For every game I've downloaded and didn't like I've not taken anything away.. are these figures ever taken into account? No, because if people admit piracy just about balances out or may even help a company they'd have to stop using rootkits and DRM to take away your basic right to copy things for self use.
I like muppets.
how will poor countries suddenly become rich just by fighting piracy? I mean, don't tax revenues come from MONEY EARNED BY THE PEOPLE? And how will people pay taxes on some money they DON'T HAVE in the first place?
Yet another flawed "OMG look at all those stolen CD's we could earn so much money with this stuff" study.
Perhaps if Microsoft stopped charging $200 for Windows and $2000 for Visual Studio, more people would buy their products legit.
'2.4 million new jobs, $400 billion in economic growth and $67 billion in new tax revenues'
It's interesting that these BSA studies always assume that the money that is not spent on software is not spent anywhere else either.
It'll probably take more than 2.4 million new jobs, $400 billion in government spending and $67 billion in from tax revenues to cut the current global software piracy rate of 35% by 10%. Consider costs involved in prison and oversight of the millions of copyright violators, ignoring the burden of catching violators.
Since when has this country used intellectual elite as a pejorative term?
I'm no expert in economics, but the numbers quoted in TFA just don't make sense to me. I feel like there is a hidden assumption in this analysis. They are saying that countries that currently have massive "piracy" would, if only "piracy" were elimianted, have a gigantic boom in their IT sector. They say that Russia and China would see a massive increase in IT jobs and so forth.
I don't think so. They are assuming that there is a limitless demand for IT professionals that is not currently being satisfied. I don't think this is the case. These countries have a host of other economic and political problems that lead to many things, including not respecting other countrie's copyrights (oh no!) and having limited jobs for IT professionals. If they suddenly enforced copyright (and by this, it is implicitly meant the copyright of other countries) I don't think there would suddenly be a huge demand for copyright-enforcing bureaucracy.
I just don't see why people who are used to making copies without obtaining permission will go along with, and support, such a system. Frankly the point of the whole article is "other countries have this nifty law that lets the government tax ethereal things... and it lets companies sue lots of people for ethereal things! These countries are rich! Do you want to be rich? All you have to do is impose laws that manage ethereal things (like ideas), and *poof* you have wealth out of thin air!"
I don't believe in generating fictitious wealth using laws. It's barely sustainable for the countries that are doing it now; I just don't see how it would make sense for countries that don't have a history of such laws.
2.4 million new jobs...
I think they mean 24,000 new jobs which in the US earn $100,000/year each. Outsourced overseas, that would be 2.4 million jobs at $1000/year each.
That's the same math they use to count a single 40x CD burner as 40 burners when they bust a piracy ring.
cure cancer, the common cold and aid. IT will also result in zero-point energy power plants, and FTL vehicles. The benefits if IP patents just keep rolling in...
Running with Linux for over 20 years!
The huge amount of money these companies make from record sales seems to have no place to go. Innovation isn't in great amount, but traditional styles of thinking and cut-throat business tactics seem to be. They seem to not know where to spend it, so they use it to fight piracy to try to make more. They just don't have the minds recruited to be able to plan out and detail market strategies that could take advantage of the person who downloads a rom to try it, so he could buy a game later at Gamestop when catching a movie with his girlfriend. They don't think about how a friend listening to a tune on the internet has more influence on possible album purchases (because that friend just may happen to send that song to you, illegally perhaps, but intentionally to get you into the song), when focusing on that could get a person into a band if they could download some good quality singles from the cd for free. There doesn't seem to be trust in artists either - if a single doesn't sell millions of copies, it's considered a failure. Most bands work by building a fan base, and sharing the music online builds that base much quicker than releasing copy protected cd's that could damage a person's computer.
Also, 127.92 million manufacturing and engineering jobs will be lost because nations with tough IP laws lose the competitive edge brought by investment (both foreign and domestic) in R&D and technological development, 143.84 million additional lawyers will need to be trained to enforce newly implemented IP laws, and 538 trillion dollars will be lost over the next thirty years as the economic output of heavily-IP-restricted onetime global heavyweights drops to next to zero.
See? Making up numbers is fun, and very educational. But I'll bet mine are just as accurate.
The higher the technology, the sharper that two-edged sword.
The money you save by pirating software will just be spent on other things you can't pirate... like hardware. The government still gets its sales tax no?
The problem that these people fail to see is that third-world countries can't afford to pay the "normal" (i.e US) prices for software. The numbers the BSA is throwing around is just mind-boggling... $ 400B in economic growth, what the fsck ever. I don't think most of those people would actually replace their pirated copies with the original, just because they can't afford it.
The message they're trying to convey is "OMG that's all we're missing out on because of piracy?", but it doesn't hold water. I'm not condoning piracy, but it really pisses me off when I see the "guys in the suits" blabbering inane propaganda and throwing around numbers to justify their existence.
And if the study includes PC games in the "pirated software" category, this makes it even worse, because the numbers will be again vastly inflated. In third-world countries, copies cost anywhere from $1 to $3, so anyone who goes out and buys games wouldn't leave without at least 3 DVDs, even they never play the games they bought. Which wouldn't be true if the prices were in the $35-55 range.
Or will that be lawyers who earn their money in patent cases?
Somehow something is very very wrong with the reasoning that if people would have paid for what they pirated there would be a lot more money in the economy. If every one had unlimited money, then yes, ok, but then there would be unlimited money already. The whole point of money is that you can spend it only once.
Money that is not spend on a software product, because it is obtained illegally, is not mysteriously "lost", and can not be magically "recovered" by a reduction of piracy.
I can understand that a software company prefers people paying, and that that helps the financial situation of that particular company. But you can't just add up all virtual losses, and state that that is the total amount of money that will magically pop up when everybody would be paying.
Adobe/Macromedia/MS wouldnt have such a huge market penetration. Young pirated software users are the key. Get them hooked onto your product and most likely when they grow up they will buy your software. Kinda like me :)
by TheSpoom (715771) Uncaring Linux user here. I have nothing to add to this but please continue. *munches popcorn*
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.
When will they release a study that finds affordable software prices sell more software and limits piracy?
:)
:) Dare i say, they are pirating software to IMPROVE the standard of life of all, giving ALL a fair chance to enjoy life in a world that says if you cant "pay" you cant play. A world that would leave the poor behind only because they cant afford to buy food.
;)
Thats the real truth. Even the pirates understand that
You think they pirate software because they're trying to undermine their local economies?
The pirates arent going anywhere because the companies keep treating people like cash batteries. They're people that deserve a fair chance to enjoy $5000 software packages.
Jesus would pirate software
As soon as people have to pay for it 80% of the software houses out there will dry up and blow away.
Software pricing is heinous as is music and video pricing.
Lower the price and people won't really need to or want to pirate software.
"If any question why we died, Tell them because our fathers lied."
The reality is not that everything around the world is "the same", but that the world is an increasingly interconnected place. For thousands of years, people living on one side of a mountain wouldn't ever know about the huge city on the other side. Now, we have the ability to travel nearly anywhere on the globe, and we also have things like global supply chains. No matter what you choose to do, you will affect people all over the world, and millions of other people are affecting your life. Martin Luther King said something like "and before breakfast we have depended on half the world".
atrategy for battling Open Source.
A few years back, I decided to abandon all software I was not either entitled to use (open source, freeware, paid licenses, etc...) and could not afford to own.
For a while It was a real bitch, but then things changed. While I've been a Linux user since the mid 90's, I really didn't fully explore OSS until about 2000. What I found was that a lot of software is simply not necessary. Using the software I had in more creative ways, or simply learning (again) to work without some software has had clear benefits to me, both in terms of dollars saved and in terms of just being able to work in the first place.
Today, I own a coupla pieces of commercial software and the rest is all OSS. That more than piracy is resulting in lost sales. If they really succeed in cutting down on piracy, the OSS side of things is just going to get a lot worse for them and they know it.
The only solid way to keep the proprietary, "pay as often as we can get you to pay to compute" model sustainable is to change the rules of the game such that OSS alternatives are driven back underground. This continues to happen where multi-media applications are concerned, but that's not enough. Getting Ogle from another country really does not affect anyone as the DVD player devices are all bundled with some goofy player anyway.
Getting OpenOffice, GIMP, web browsers, development tools, etc... back out of the mainstream will make a big difference. I suspect the approach will be to slowly move legislative opinion in this direction, then deal with citizen complaints through "access programs" very similar in nature to what the big phama companies do today.
Can't afford that lifesaving drug? Simple, if you beg and prove you really, really are gonna die without their property, they will "give" it to you rather than do the right thing.
Software companies are going to end up trying the same things, IMHO.
I regularly write my elected representatives about OSS issues. I let them know I write OSS software and why and what value the growing body of OSS software brings to anyone willing to participate. Participation can be as simple as just using the software of your choice or as involved as developing, training, distributing, etc... We all benefit.
Oh, the one biggie I always mention is the fact that OSS is unique in that value received is more than value contributed for everyone involved because no material goods are required to make use of the combined result. This is important because many industry (closed industry) lobbiests equate this value proposition as an "unsustainable ponzi type scheme" that does more harm than good as it takes advantage of contributors without "closing the value chain". Translation: We can't compete with free and the world (read government) needs us here.
Back on topic: The IP battle is imporant here in the US because we have outsourced darn near everything else, yet we still consume an awful lot per capita. Unless the world can be convinced that IP is viable, we are going to become increasingly hard pressed to restore that balance in the coming years.
On one hand, I'm not looking forward to us having to figure that out. And IP is an easy out. On the other, I sure don't want OSS going anywhere because it's primary value to me is not the cost savings, but the near total computing freedom that comes along for the ride.
One of my favorite computers happens to be an older SGI computer. OSS keeps that machine viable. Any of us, who know what we are doing, can take pretty much any combination of computing hardware we can get our hands on and be productive with it. As time goes on, I find this to be quite compelling in that I can continue to compute just the way I want to, not how I am told.
IP takes all of that away and I KNOW that's a bad thing, simply because being left with no alternatives means near total control of our computing environment. History has shown time and time again that scenario never is
Blogging because I can...
...this time, is the fact that the BSA is distributing this BS (coincidence?) worldwide at the same time. The usual suspects (politicians, etc.) try to fall for it in a believable manner (you have to agree with statements of people who are actually paying you money to do so), and will try to enact the more severe punishments their real employers are demanding (to put it bluntly: politicians living on taxes are so 90s, getting paid for "consulting" in the industry is hip).
What's new?