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%."

Comments

Software Piracy Rate?

[croddy]

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.

Re:Software Piracy Rate?

[CastrTroy]

I think what they think it means is the number of programs on computers, that aren't paid for, vs. the number that are paid for. This doesn't make a lot of sense though. Most people I know have photoshop installed. If they couldn't pirate it, they wouldn't have it. Simple as that. They aren't going to pay $700 for it. Same goes for many other programs that people tend to have installed at home. This includes windows and MS Office. Many people have MS Office Pro installed on their home computers. Very few of them have paid for it. 35%, I think, is the world average. Some countries have rates around 90%, while other countries have rates around 15%. Really, I think they are completely underestimating how much pirated software people have . Lots of people who have paid for the OS, and maybe 3 or 4 other programs, also have 20 programs that they haven't paid form. Meaning that out of maybe 25 programs, they've probably paid for 5. This means they are pirating 80% of their software.

Re:Software Piracy Rate?

[Sique]

If they wouldn't pirate Photoshop, they would use GIMP, and complain about missing features, some of them would start scratching the itch and bringing GIMP on par with Photoshop, KPT would be recoded from scratch for GIMP, and finally even professional graphic shops would switch to GIMP and save the $700. So in the end no one would ever buy Photoshop, and the coders of Photoshop would be out of work and unpaid. Basicly piracy is the last thing that keeps Free Software from world domination.

Re:Software Piracy Rate?

[grcumb]

"Basicly piracy is the last thing that keeps Free Software from world domination."

And that is precisely why I oppose software 'piracy'. I live in a country where I can buy any software I want for less than 20 bucks at the local CD store. The parliament here has yet to ratify the Berne Conventions on copyright, so we exist in a sort of a grey zone. There's no legal reason to respect software EULAs.

But the use of proprietary software has created many other difficulties, not the least of which is a cargo-cult mentality. Software is not something that one configures or, heaven forfend, writes; it's something you go down to the store to buy. If something goes wrong with it, you just buy something better. If there's nothing there that does what you want... well then, software can't do that.

That's all well and good as far as it goes, but it does absolutely nothing to develop the local economy, improve educational opportunities, or to impress on people just what kind of amazing things they could be doing with software in this country. This place is poor in resources, but doesn't lack for smart people. The only way people here will ever find really well-paid work is to sell their skills overseas, and the only way they can do that is to leverage the Internet, and the only way they can do that is if they understand the software, and the only way they can do that is if they wean themselves from the proprietary tit.

Free Software costs time and effort, and will always be more expensive (though ultimately more valuable) than pirated software.

Re:Software Piracy Rate?

[laughingcoyote]

Actually, the BSA has a very interesting way of doing it. Decide on the accuracy for yourself.

In effect, they take the total number of computers sold, decide what percentage of those computers "should" be running a given piece of proprietary software, then look at the number of copies sold. The discrepancy between these numbers is the "piracy rate". This type of statistic-making in essence ignores free software/OS's, other types of freeware, "home-rolled" alternatives written by the user themself, and the like. (So, despite the fact that I'm in full compliance with my OS's license by downloading and installing it for free-according to the BSA, I've got a pirated OS!)

hmm

[Turn-X Alphonse]

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.

Re:hmm

[Skreems]

Ok, but do you have studies to back that 80%? Or are you just guessing?

That's the problem the grandparent and others have with this whole thing, is we know some people use piracy to benefit everyone, and some just steal, but nobody REALLY knows how many do which.

Re:hmm

[Gonoff]

So how does it take money from them if someone makes a copy of their software? They will not get any money from this person under any circumstances. If they can't steal a copy, they certainly will not buy one.

As people here say so often, "piracy" can actually help producers. Someone copies a few games from company X. Eventually they may actually buy one. Why didn't they get it from company Y? Because they know that this lot makes stuff they like.

Re:hmm

[Lifewish]

True, there are a number of people with the "gimme" mentality. However, there are a few other factors to consider:

1) Would these misers have been willing to splash out for the product anyway? Probably not. For example, a copyright infringer with 1,000 albums on his/her hard drive would never have been able to afford more than a couple of percent of that. In fact, being miserly, they probably wouldn't have bought more than five albums, if that, coming to a grand total of $15*5 = $75 lost sales at absolute maximum. Of course, the RIAA would count this as $15*1,000 = £15,000 of lost sales.

2) To what extent is this countered by the increased exposure of the target demographic to the product? Say the above miserly copyright infringer uploads 2,000 copies of assorted albums to other people. Now say just 5% of recipients are honest (probably a low figure), and go out and buy just 5% of the albums they receive. The money spent is then $15*2,000*0.05*0.05 = $75 - cancelling out the original "loss" to the copyright holder. (No I didn't fudge my numbers, it was just a flukey estimate)

3) (This one applies to music) How much of this actually goes to the artist? Since the misers who are forced to buy albums if the filesharing networks close aren't exactly publically-minded citizens, they'll just get their albums from the stores. By Courtney Love's arithmetic, the record label gets about $50 profit from the $75 spent, whilst the artists get a total of $2.38 profit. Now, if the albums are downloaded and then paid for, the recipients are likely to be individuals who are sympathetic to the plight of musicians, and hence will often donate via a band's site or buy from an ethical label, as I did just last night (despite being a poor student). Result: the artist is likely to get at least 1/2 the loot, a 1500% increase over the other system

4) (This one applies to software) What happens when people want to use a superb tool like Lightwave in a professional context? They have to license it, or recommend that it be licensed. So, by not shooting down the bored teenage downloader who'd never be able to afford this $800 software, Newtek is able to sell several copies to the company he/she ends up working for. It's like farming only not.

In conclusion, the positive side-effects of wide-ranging copyright infringement will often outweigh the negative side-effects, especially in industries where the content producers are getting shafted or where the product is most lucratively licensed in a professional context. There's probably an equivalent argument for films but my brain's dead.

Speaking of ruptured braincells, there's at least two errors in the above calculations. I'm too tired to figure out how to correct them, so I'll just say: please give bonus points to anyone who finds three mistakes :)

Re:hmm

[zerocool^]

It's getting to the point now in my life where I'm financially stable and can afford to buy the odd game. But, even as such, I usually try before I buy, and that means piracy. For example: I just played through F.E.A.R. It took me about 8 hours to beat it. And, upon starting up again, I've realized that it has no replay value whatsoever. $55 for 8 hours? Thanks, but no; I'm glad I didn't buy it. It's uninstalled. On the other hand, Age of Empires III I downloaded, played, and liked; and I'm going to go buy it.

I origionally pirated my copy of Neverwinter Nights; but because I enjoyed it so much, I ended up buying the retail version, both expansion packs, and paying for all the downloadable premium modules. And I'm talking as they became available; not years later in the ultra-mega-pack for $40. I probably have close to $180 invested in Neverwinter Nights.

Every time I feel guilty about this policy, I end up buying a game and being pissed off about it. The latest example was Doom III - I bought it, and played it, and it too has lackluster multiplayer and no replay value.

It basically boils down to if you make good games, I'll buy. But, if you put out crap, I won't.

However, it should be noted that this only goes for 1.) Games and 2.) MS Office. Now that I work for tech support in the CS department of a university, I have access to the MSDN Academic Alliance copy of Office, so that's now legal, but I used to pirate it. However, I also used to feel bad about it; since I knew that the only reason I was pirating it was because I needed to be able to create word documents for specific purposes (resume comes to mind), and it's what everyone else uses; I'd have been technologically happy with Open Office. But it's to the point where I've found free programs to replace all the little things I used to pirate.

For example; CuteFTP - now I use FileZilla. Eudora - now Thunderbird. Nero - now I use burnatonce; though I'm still looking for a free (beer; possibly speech too) CD Burner that doesn't suck - burn at once burns images, and does it well, but doesn't do anything else. Photoshop - Gimp. Norton Corporate AV - now AVG Free. I don't even remember what I used before Exact Audio Copy. And I want to know where VLC has been my whole life.

I've also stopped downloading TV programs and Movies. Movies basically because I never go to the movies anyway (baby) and anything that's good, I'll buy when it's on DVD (I'd rather sit at home comfortable and be able to pause). TV - now that I have Tivo, I don't miss anything; and I've sort of gotten over the need to archive everything; but should I want to archive, I can always use TiVo desktop, a program to strip the DRM from the files, and re-encode the MPEG2.

So, basically, I'm pretty much proof of "if it's reasonably priced, I'd just as soon buy it". I'm also proof of "If you put out crap, and claim that piracy is hurting your sales, you're wrong: it's either too expensive, or it just sucks".

~W

Question

[Spy der Mann]

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.

Re:Question

[Spad]

Especially when you consider that the vast majority of the software that is pirated in these countries is written and produced in the US and Europe, I fail to see how sending huge amounts of your GDP to foreign lands will help boost your economy.

False assumptions

[Anonymous Coward]

'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.

And what will be the cost of enforcing piracy?

[c0dedude]

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.

I highly doubt it...

[kebes]

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.

Re:I highly doubt it...

[iseppo]

I can cite you an assumption hidden in the text: "Although GDP is a measure of government and consumer spending plus business investment plus exports minus imports, for the purposes of this project IDC did not account for exports or imports." this GDP measure is fundamentally flawed, and is the only reason why this study comes to the conclusions it comes. When your piracy rates are high, then reducing it by 10% means more spent on licenses, and everything that is spent on licenses is considered to be the GDP of the country here. While common sense would say, that most of it will go out of the country. So this study is bullshit. I want to ask from the guys in BSA - when You give as examples like this, why would you expect we would act honestly?

2.4 million new jobs

[slasho81]

[...] 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 [...]

How do you gain economically by protecting intellectual property rights? 2.4 million new lawyers.

unpublished results also say that IP will ...

[Jerry]

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...

If it wasnt for piracy

[future assassin]

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 :)

Re:If it wasnt for piracy

[CastrTroy]

This is very true. I wonder how quick free/Open Source software would take off if suddenly, all the expensive commercial software was impossible to pirate, or if they just made it too risky to bother pirating. Most people wouldn't choose MS Office over OO.o, if they were forced to fork over the $500. Same thing goes for photoshop, visual studio, and all that other high priced software with cheap/free alternatives.