BSA Claims 35% of Software is Pirated

hdtv writes "Business Software Alliance says 35% of packaged software installed on PCs globally is pirated, and estimates the losses at $34 bln. From the article: 'The countries with the highest piracy rates were Vietnam (90%), Zimbabwe (90%), Indonesia (87%), China (86%), and Pakistan (86%). The countries with the lowest piracy rates were the United States (21%), New Zealand (23%), Austria (26%), and Finland (26%).' TechDirt analysis debunks some of the myths: 'The BSA claims that all of these "lost sales" represent real harm to the economy. It's the same bogus argument they've trotted out before, which is easily debunked. Much of that unauthorized software is being used to make firms much more productive than they would be otherwise -- probably benefiting the overall economy quite a bit.'"

Comments

not only NOT a lost sale, but

[yagu]

Each pirated copy, contrary to the BSA (interesting, what does the BS stand for?) claim, not only is not a lost sale, but potentially an extra sale.

BSA's claim is akin to the MPAA/RIAA's claims each downloaded/pirated DVD/CD is a lost sale. And, there have (AFAIK, and I've researched this many times) been no studies coming close to showing causal relationship between pirating and decreased sales.

Interestingly, one of the most damning contra-examples was the huge spike in CD sales corresponding to the spike in file sharing at the emergence of the original Napster. Of course, once the RIAA and music industry managed to rein Napster in, the dropoff in shared files was matched almost identically for a decline of CD sales.

People, especially in the poor couuntries, are running pirated software because they otherwise would run no software at all. And, if with this pirated software, they manage to bootstrap their own situation, or that of their business out of the netherlands they become much more likely to buy and pay prices for non-pirated software.

Re: not only NOT a lost sale, but

[ObsessiveMathsFreak]

Interestingly, one of the most damning contra-examples was the huge spike in CD sales corresponding to the spike in file sharing at the emergence of the original Napster.

Ahh! But were the CDs blank?

Re: not only NOT a lost sale, but

[mattkinabrewmindspri]

But not all computer users are businesses. I would expect that piracy would be much more common among individuals, due to individuals not having as much money to afford software, and due to businesses being more afraid of being caught.

If Joe Blow on the street is pirating a $700 program, chances are that he wouldn't be willing to pay $700 for it even if that was the only way to obtain it.

Re: not only NOT a lost sale, but

[darkonc]

It's a bit of both. Sometimes people who could easily afford to buy a copy of some software will still pirate it "because everybody else is doing it" --- The fact that microsoft officially winks at pirated copies doesn't quite help reduce the volume. Microsoft knows that if they were to press too hard on pirated copies, people would simply go to cheaper alternatives (including Free and Open Source) that do a completely adequate job.

Having "everybody" running MS software is to MS's advantage -- especially when they're trying to talk MA out of going with ODF.

Where the real falacy is is declaring these theoretical sales to be money "Lost to the economy" -- when the truth is that most of the hush money people pay for software immediately leaves the country (going to the Bahamas, or Ireland or wherever it is the gives Microsoft the best discount on income tax).

Countries like Canada don't even have the advantage of a significant income from R&D spending to offset what is actually lost to the national economy from via Microsoft Software sales.

Re: not only NOT a lost sale, but

[Stonehand]

What if the choice is between unlawfully duplicating a $700 program, buying the $700 program, unlawfully duplicating a $70 program, or buying the $70 program?

The cheaper, perhaps less-feature heavy but perhaps perfectly adequate program might genuinely be losing sales and market share to unauthorized copies of the more expensive program. After all, how many people infringe Photoshop vs. infringe Paint Shop Pro, even though most people can perfectly make do with the latter?

Wrong counter argument.

[XaXXon]

Much of that unauthorized software is being used to make firms much more productive than they would be otherwise -- probably benefiting the overall economy quite a bit.

This is the WRONG counter to their claims. The correct counter is that an unauthorized copy of a piece of software is NOT the same as a lost software sale.

In fact, if companies are using unauthorized copies of software to increase their business, that's when it's morally wrong to not pay for your software in my mind.

To me, it's like watching a illegally downloaded movie for personal (potential) entertainment vs. selling it on the street. The latter is the one I have a moral issue with and represents a more realistic loss of sale for the copyright holder.

Re:Wrong counter argument.

[Spad]

Indeed.

IMHO it's one thing for me to pirate Photoshop because I want to piss about with some photos and see what I can do with it, when there's no way in hell I can afford to pay for a legit copy. It's quite another for a company to make a profit using pirated copies of Photoshop because they don't want their bottom line affected by a couple of licenses from Adobe.

Re:Wrong counter argument.

[VValdo]

This is the WRONG counter to their claims. The correct counter is that an unauthorized copy of a piece of software is NOT the same as a lost software sale.

An extension of this argument might be, "If make 20,000 unauthorized copies of Word in my basement, did I single-handedly just deprive Microsoft of millions of dollars?"

You wouldn't even need that much hard drive space. Just copy the .iso, delete the copy, then make a new copy. With a simple shell script, anyone (think economic terrorist) could bankrupt Microsoft in less than a week!!!

W

Re:Wrong counter argument.

[deathy_epl ccs]

...that's 362.88 million dollars, or less than 1% of the pocket money Microsoft has, nevermind their total assets.

So c'mon, guys! If we're gonna get this job done quickly, we're gonna need your help! Everybody chip in, and we'll have 'em out of business in no time!

Wow the US is low

[aychamo]

I can't believe the US is doing so poorly in their rate of piracy. I guess I'll have to start pirating twice as much software just to help us make up the slack on the rest of the world!

Re:Easy answer

[CosmeticLobotamy]

The rest is open source and you can't pirate that.

That sounds like a challenge, and I accept.

too many sheep

[sc0p3]

New Zealand (23%),

Yeah we have too many sheep here in NZ.. of course we have a low piracy rate.. That'd require people to know what a computer was :|

bah

[ltwally]

"The BSA claims that all of these "lost sales" represent real harm to the economy. ..."

Bah. Let's just say, hypothetically, that I sometimes pirate an MP3. Does that automatically mean that if a free (as in pirated) version were not available, that I would actually pay for that song? That I would go out and buy a CD that I really didn't want, or pay $1 for a DRM'd copy from iTunes? HELL NO.

Along those same premises, let's say, hypothetically, that I had a pirated copy of Adobe Photoshop on one of my PC's. I'm not a graphics professional, and have little use for it beyond making my own wallpaper. Are we to assume that I would actually pay the $699 price tag for this software? HELL NO.

What I would very much like to see is a poll comparing what people have pirated against what people have pirated and would pay for if they could not pirate it. I don't have any statistical evidence to back me up, here, but I'm going to hazard a guess that piracy leads to a lot less in actual losses than the BSA or the RIAA/MPAA assumes. And that is ignoring the fact that there are a rare few people that actually purchase a product just because they were impressed with the pirated copy, and wished ot support the author/creator.

Haven't we heard enough of this "piracy is going to kill our economy" bullshit? Why are we focusing on this, when the our (America's) trade deficit with China is over $200,000,000,000/year (yes, that is 200 billion dollars a YEAR at the current rate). Seems to me that this piracy thing is small potatoes, in the end.

It's total hogwash

[sterno]

The truth of the matter is that most people wouldn't buy that software if they couldn't get it for free. I'm sorry but the average home user doesn't have the cash for a copy of Photoshop, so yeah, they pirate it. If they couldn't pirate they wouldn't go out and buy photoshop, they'd download the Gimp.

Re:It's total hogwash

[linvir]

Worse even than choosing to live without their PC, some even turn to MSPaint.

Re:It's total hogwash

[LiquidCoooled]

I don't object at all with home users playing wit business software.
When its being used for amateur things then its ok.

I believe that using unlicensed software within a business is wrong however, a business is there to make money and if thats the case they can support the economy and buy their toolset.

they're just waiting till everyone's hooked

[spiritraveller]

For now they are just talking. They can't take any enforcement actions, because those countries would simply switch to open source.

For example, they could threaten these countries with ejection from the WTO or other treaty-based organizations, but they won't... until those countries are economically viable enough to pay the exorbitant licensing fees.

And then they will win, because they can lock people in to their proprietary formats. They call themselves the Business Software Alliance. But they are really the Proprietary Software Alliance.

Fight!!!

[s7uar7]

I pirate my software and spend the money I save on CDs. I'll let the RIAA and BSA fight it out between themselves.

If the BSA members collected the losses: what?

[aphor]

All of those dollars the BSA is claiming as economic losses are actually being spent elsewhere. It's not a situation of money that should be out working loafing safely in a shoebox. Would we all reap more economic benefit from shifting money away from the other things into the software industry? I reckon not. Microsoft is probably one of the biggest claimants of the BSA loss statistic, and it is difficult to suggest that we would all be better off if they had more money or more freedom to make/improve software.

This is more of that smoke and mirrors trickle-down voodoo-economics gobbledygook. The BSA overwhelmingly represents the entrenched interests of large enterprises (you think big government is wasteful? How about big business..) against entrepreneurial business (where we see the most real economic growth).

What is this productive software?

[brian0918]

"Much of that unauthorized software is being used to make firms much more productive than they would be otherwise -- probably benefiting the overall economy quite a bit"

What is this software, and why isn't it available for Windows?

Paid the Windows tax, Running Pir8 XP Pro

[bit trollent]

My new laptop came loaded with a ton of scumware. Solution: wipe the hard drive and reinstall windows. The recovery cds dilligently reinstall all the scumware, so my only option is to run a pirated version of Windows. Now I can't get updates, even after paying the windows tax.

Solution: learn every genuine advantage workaround, repeat them, and distribute pirated copies of windows. If you want to screw me over, I'm happy to return the favor.

In a similar situation, I find myself out of town and I accidently left my laptop power cable at home. I go to the store to get a replacement and it costs $120. Highway robbery if I ever saw it. My solution: return the new cable when i get back in town. If it cost less than $50 I would just keep it, but if they want to rob me, I have no problem robbing them right back.

Moral of the story: If you screw me over I have no problem returning the favor.

Desperately trying to figure this out

[Overly Critical Guy]

I'm desperately trying to figure out when Slashdot became pro-piracy. It's really become quite a pro-piracy haven these last few years. People think it's perfectly all right to steal software and not pay the author for it. They actually believe it's okay to download, for instance, Doom 3, and not pay John Carmack, even though he spent five years of hard work to release it. Even more hypocritically, you'll often hear that piracy isn't theft, but when a GPL violation is reported, it is referred to as "stolen code." Also, people act as though it's wrong for the RIAA or the MPAA to go after individual infringers (never mind that this is exactly what Slashdotters were calling for during the Napster lawsuit), but when there's a GPL violation, the EFF should get involved and sue the infringers. I just don't understand the disconnect. I have a feeling it really just boils down to money--people want to preserve the means to get stuff for free without having to pay for it. It has nothing to do with morality or ideals at all.

I also don't get TechDirt's hostile opinion towards the idea that--gasp--piracy is wrong and shouldn't be happening, and that it costs people money. Of course it does. The idea that some section of the economy is magically enhanced because they got to use pirated software ignores the section of the economy hurting from lost sales. And none of it matters anyway, because you don't magically have the right to pirate software just because it would enhance your company. What a selfish and amateurish opinion to have. My company would do better if we could hack into competitors' computers and copy their valuable trade secrets for ourselves, but we don't have the right to do that just because it would enhance our business.

Finally, I don't get why so many pro-piracy opinions exist in Slashdot comments, invariably with some mention of the "MPAA/RIAA," as though scapegoating some lobby group somehow justifies making sure some musician or filmmaker or software engineer doesn't get paid for something they worked hard on to release and make a living from. I think rooting for piracy is a weak, lazy mindset. It's the easy route to take, and illustrates that one has not thought through it at all. They likely are high school or college students who haven't had to go out into "the real world" and perform work in exchange for income. They're used to running Kazaa and eMule all day long, downloading everything they can find, and they get so used to such convenience that they get bitter and defensive when the free ride is taken away.

But, I don't expect the amateur opinions around here to change. People will continue to scapegoat the RIAA and MPAA as a lame justification--"The RIAA made me download System of a Down's latest album!" "The MPAA made me download a camrip of X-Men 3!" Slashdot will continue to post vaguely pro-piracy articles such as this one, while ignoring its own Slashdot heroes like John Carmack (id Software was estimated to have lost millions of dollars when Doom 3 was leaked the weekend before its release date). Outside of the green and white bubble of this website, the rest of the world will continue to run on capitalism, the least bad economic system on Earth, and the antithesis to the pseudo-socialist worldview of "share everything and worry about the consequences later" that permeates the discussions.

Just my two cents.

Re:Desperately trying to figure this out

[vertinox]

I'm desperately trying to figure out when Slashdot became pro-piracy. It's really become quite a pro-piracy haven these last few years. People think it's perfectly all right to steal software and not pay the author for it. They actually believe it's okay to download, for instance, Doom 3, and not pay John Carmack, even though he spent five years of hard work to release it.

I wouldn't call it pro-piracy as it is as much as Anti-BSA or Anti-Microsoft or Anti-establisment.

Personally, I buy all my games because I have the money and I often feel like giving back to indie developers. (Go Darwinia! Go Red Orcherstra!)

But! I am highly suspicious of BSA's tactics and their claims of monetary loss which companies will use for tax purposes which I suppose directly is akin to "Tax Avoidance" which of course means it costs me indirectly anyways through higher taxes (Yeah I know it is a stretch)

They assume that if a person pirates software, they would have bought the software if they couldn't have pirate it. For some reason they cannot comprehend someone just doing without and finding something else to do.

If nothing else... Piracy hurts FOSS more than pay proprietary because with piracy there is no need for a free alternative, hence the lack of interest in those programs and hence less development. But I digress...

My second point I would have to raise with the BSA is how in the heck do they know that there is all this piracy in the first place? From my understanding they aren't going around house to house doing polls or making phone calls to everyone in the world and saying "Do you pirate software?"

Even if they did, no one in their right mind would say "Umm... Yes, I pirate software!"

Do they base this on figures of how many people they caught and then through a random multiplier with a dice roll and say "Here is our loss! Now give us a tax break!"

This is why I think most people on Slashdot appear to be pro-piracy.

And the fact these are faceless corporations or wealthy individuals aren't helping either.

A 14 year old kid won't stop to think as he is downloading Doom 3 torrent that John Carmack and go "bless his soul for his hard work in the 3d industry and without his hard effort we'd never have all the 3d games we have today", but rather "Gee... That man has 3 Ferraris! I'm sure this won't hurt em!"

Why the BSA can be good for small biz and OpenS..

[PhoenixOne]

"Most wouldn't download Gimp, they wouldn't know what Gimp is. They would stop using their PC for photo editing."

Huh? If there was a market for a cheap/free photo editing tool, somebody would fill it. In fact, there are several lower cost (and free) photo editing tools made by small companies that sell to people who don't need/can't afford Photoshop. And *these* are the companies that get screwed over when people warez software.

Joe six-pack may not spend $600 on Photoshop, but he would probably buy a $19.95 alternative (or his buddy might show him where to find Gimp). But if he can just get the top-of-the-line product for free, why the hell would he bother trying anything else?

In short, it isn't Adobe taking the lose as much as the independent and Open Source developers.

Re:this may be so but...

[shutdown -p now]

However, I think it is very important to realize that this is a moral failing on my part. To pretend that it is not my moral failing, but wholly the failing of the developer to not recognize his own best interest that causes me to pirate software is to commit a crime far wose than theft. It is to essentially deny developers as rational entities. Another way to put it is to deny that they have rights, or they have personhood.

Whether they have right to monopoly over their creations is a debateful point. If you are in a pro-copyright-as-it-is camp and pirate software, then you're obviously being morally inconsistent. But keep in mind that copyright is not an intrinsic right, it's granted by the people in the interests of the people. Some believe that it is now being abused, and piracy is just a response to that, in which case it is not necessarily unethical. Some go further and believe that "copyright is theft"; from this point of view, piracy is outright beneficial.

In short, noone argues that copyright violation is illegal. But it is not universally unethical - it depends on where you stand on other issues.

GIMP - yes

[CypherOz]

Most wouldn't download Gimp, they wouldn't know what Gimp is. They would stop using their PC for photo editing.

Necessity is the mother of invention. Assume all SW is now pirate proof. People would find out about GIMP real quick. In fact enforcing anti-piracy will help the FOSS movement imensly.