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BSA's Latest Piracy Claims 'Shockingly Misleading,' Says Geist
An anonymous reader writes "This week the Business Software Alliance published a new study
which purports to estimate the economic gain from a ten percent reduction in piracy of business software. For Canada, the BSA claims that the reduction would create over 6,000 new jobs and generate billions in GDP and tax revenue. But Michael Geist says the BSA claims are based on nothing more than the economic gains from a ten percent increase in proprietary software spending. The BSA now admits its estimate is based on the presumption that every dollar 'saved' by using unlicensed software would now be spent on proprietary software."
Glyn Moody pointed out more flaws in the BSA's report.
For every 10% increase in broken window glass over 6,000 new jobs would be created and billions in GDP and tax revenue would be generated.
spending more money means somebody else makes more money.
GENERATION 25: The first time you see this, copy it into your sig on any forum and add 1 to the generation. Social exper
There is a finite amount of money.
Thus, if $1000 more is spent on software, $1000 less is spent elsewhere. Roughly speaking, 6000 new software jobs equals 6000 fewer other jobs.
This is approximately a zero sum game.
There are benefits to reducing piracy, but their argument doesn't hold water.
How is it shocking? Every study released by industry groups on the effects of piracy, thus far, has been way off the mark in estimating the economic impact of piracy. This is about as unshocking as you can get. Did anyone really expect a trade advocacy group to not mislead you when they report on stuff like this?
My postings are informational and does not constitute legal advice. Act on it at your risk.
Even the US Government Accountability Office has announced that you can not accurately make economy-wide estimations for this type of thing.
Most experts observed that it is difficult, if not impossible, to quantify the economy-wide impacts.
Generally, the illicit nature of counterfeiting and piracy makes estimating the economic impact of IP infringements extremely difficult, so assumptions must be used to offset the lack of data.
Nor does it account for the jobs created by the money *saved* by not paying for said software.
"the reduction [of software piracy] would create over 6,000 new jobs and generate billions in GDP and tax revenue"
That also assumes that any money not spent on proprietary software is being stashed under a mattress.
The truth is more like the money would be diverted from other spending, and these "billions" of dollars would just be distributed differently, with no plausible increase in net GDP or tax revenue.
It comes from reduced spending someplace else? Or increasing consumer or business debt, right?
This is an old, old economic fallacy. I tried to debunk it once in a blog post: "Broken Windows and the Ghost of Keynes" but you can't kill the undead.
Greedy bastards want more! News at 11.
If you were to increase software sales by 10% for an equal reduction in piracy, you would be causing billions of dollars of HARM to the economy because those former pirates would experience no increase in value in the software they have and now have fewer resources to spend elsewhere.
Piracy does cause some harm to the software/entertainment industry, but it does so by enriching the greater economy by creating a net gain in value when you consider the big picture.
Their argument is fundamentally flawed in ways far beyond the fact that they are making up random numbers.
The money that teh evil pirates have stopped from reaching the bonuses of software company executives has instead been spent supporting thousands of real jobs. Or orphans. Or whatever, since these are these figures are being pulled out of someone's ass.
They whose government reduces their essential liberties for temporary security, receive neither liberty nor security.
And for the next twenty years, we'll be seeing this study cited as fact in Government position papers, other MPAA/RIAA/BSA "studies," Congressional testimony, treaty discussions, etc.
Lacking <sarcasm> tags,
Unfortunately, the new jobs will not be in product development, but rather in legal prosecution and defense, as companies spend more time hunting "pirates" with very little result per dollar spent, then are sued themselves by companies using the same tools they use to attack others.
Oh, and the law teams will almost certainly end up costing far more per 'employee' than developers.
The BSA is what you get when lawyers see how this cycle works, and band together to accelerate the process, while maximizing leverage against companies to keep the cycle going. It's like a union, without the meager shared humility of strenuous work to justify the pride involved - it's all union bosses playing with money here.
Ryan Fenton
If the dollar is saved, so the business already created over 6,000 new jobs and generated billions in GDP and tax revenue. Each dollar saved will be spend or do they think they are burning the saved money? The BSA and RIAA/MPAA/GEMA really thinks that the money not spend on licenses or music is just wasted.
http://www.mueller-public.de - My site http://www.anr-institute.com/ - Advanced Natural Research Institute
Not that I give a shit about software piracy, business or otherwise, but any business that can't afford the software required to operate, can't afford to be in business.
Why not steal the hardware and buy the software instead? Would that be ok?
A lot of people who pirate (eg.) Microsoft Office will only use it once a month or so.
Spending $600 so they can use Office a dozen times a year is probably worse for the economy than spending it on something else.
No sig today...
Most pirates would not bother buying the software they get for free if they were forced to either buy it or go without. So reducing piracy would not increase legitimate sales, or only marginally at best.
what about the CAL BS that they some time push on you as well needing all kinds of documents and being very picky about what one you need.
Let's see. BSA sometimes means Birmingham Small Arms or refers to a motorcycle with unique electrical issues or means the Boy Scouts of America. So will they hold three fingers in the air and take an oath that that opinion is genuine?
It will create 6000 new jobs in India, oh boy that sounds so fantastic.
another corporation caught lying ...oh my goodness.
let the bailouts begin anew.
Seriously, does anyone still believe anything self serving corporations say anymore?
It ought to be a reality show theme.
What's even more disturbing is that this along with anti-piracy of music and movies is being touted by many as a significant part of the cure to the poor US economy. We also have similar attempts by the broadband providers claiming net neutrality will cost jobs. Verizon has already stopped their Fios rollout in the US regardless of the net neutrality outcome. It's a total joke how every industry that wants some government concession or intervention uses "loss of jobs" as their primary tactic.
Conclusion: YES, you want people to pay for software they use but (IMHO) measuring the economic impact is a devil's game. At best.
I will create a sig when innovation restarts in the U.S.
And if it isn't worth the asking price then since there is government force behind the price, you are forced to pay more than it's worth on the open market.
Se DeBeers for an example.
So someone uses MS Office (cost $600) twice in a year (value: $5). Net loss to the economy: $595.
...In India.
But it would benefit the open source community immensely so you just *go* BSA. Prosecute away. OpenOffice needed that boost. Linux too.
Please do not read this sig. Thank you.
All I hear is how taxes hurt the economy, by taking money away from small businesses, so they have to lay off workers.
So, equivalently, the software industry should stop taxing all the other businesses by charging them money at all, and give away software for free. That way, 100% of the money companies spend on software would go towards creating jobs!
Stop taxing us, software companies! Clearly you hate small businesses and the American worker!
Velocity associates the amount of economic activity associated with a given money supply
see http://en.wikipedia.org/wiki/Velocity_of_money
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How does this apply ? I think they should concentrate on the Chinese, Russian, and Korean counterfiet software rings. In the United States if you have intelligent It people that think out of the box, you leverage Open Source tools!
OpenOffice needed that boost. Linux too.
Suprisingly, Oracle is not a member, according to this page
Since the results of the study are self serving, the result mean nothing. The conclusion means nothing. This is not a story, it is propaganda disguised as news. Thusly, this is garbage and should be thrown out with yesterday's chicken carcass.
Athiesm is a religion like not collecting stamps is a hobby.
I get it! It's so clear now!
My new plan is to pirate $100,000 worth of software, movies, and games every year. The money I save I will put into a retirement account, and I'll be able to retire in style in no time!
Now, I don't make $100,000 a year, and my current expenses are only a little less than my current income, but that's neither here nor there. The BSA has shown me that this logic is sound!
A penny pirated, is a penny saved, is a penny earned, right?
"BSA. Because not enough people are using Open Source"
XKCD:Xeric Knowledge Comically Dispen
And economics gets thrown a screwball by things with infinite supply like bits and ideas. When you try to artificially regulate those into "classical" models and try to think of them in economic terms, you run into problems.
Would you recommend some articles about the difficulties in modeling club goods?
It's better to put out numbers that don't agree with your agenda but which are likely accurate than put out likely-inaccurate numbers even if they serve your agenda.
If you get a reputation for being less than credible, well, I'd hate to be you.
Knowledge is how to play a game, intelligence is how to win, wisdom is knowing what game to play.
in this world. you think they do, but they dont. because, for these idiots' claims to be true, all these and the related industries they are used in have to not exist, so that their 10% statistic can come up as true.
'tis true. we are eating movies and drinking music albums. and living in concert halls. the whole world runs on content industry....... in cuckoo land of course, which seems to be the place BSA lives in.
Read radical news here
Er. I am not sure how "Shocking" it is. Anytime the BSA or the RIAA or CRIA etc... use "statistics" to prove a point they usually aren't worth the paper they are printed on. They don't even make an attempt to be even remotely accurate or truthful. They just use it for "Shocking" talking points, that they feed their bought and paid for puppet politicians to repeat over and over again in the media so they people buy the hokum they are selling.
I would be hard pressed to even think of organizations that I would trust less in their use of statistics and the "general use of numbers". In other words all they spout is BS, why would I ever consider anything that they spout not to be BS.
This article would make more sense if they only put quotes around "Shockingly" in a smarmy sarcastic way, unless that was the intention anyway...
Skimming through the comments so far, I get the impression that most people are concentrating on the argument that if a person can't pirate, that doesn't mean they will buy. TFA makes an even better point: They BSA assumed that, by value, 50% of the software in use is pirated. Otherwise a 10% reduction in piracy wouldn't result in a 10% increase in sales, even if all of the ex-pirates purchased. Gee, doesn't 50% seem a little high?
How did BSA get 50%? A questionable study said greater than 40%, and since 50% is greater than 40%, it must be the correct number. (The actual number was 43%, FWIW.
The earlier study included countries such as China and Russia and it appears (even the detailed version didn't really say) that they assumed that each piece of unlicensed software counted as much as each piece of licensed software. So every unlicensed copy of Windows 98 running on an underpowered PC in a third world or BRIC country was as valuable as any piece of brand-new business software.
One thing that makes this look like so much hoo-ha is that the "detailed studies" available as PDFs don't contain any collected data or details about methodology. It's just nicely presented conclusions and spin.
Knowledge is the small part of ignorance that we arrange and classify. (Ambrose Bierce)
thats what the result will be.
AND NO profits to BSA
If I dig a hole that looks just like yours and never touch your hole at all. Do you still want to be paid? What if I email all my friends and give them instructions to make their very own hole just like yours?
Starving the beast is probably our only available means of killing it. Wars of attrition generally do take a long time to win.
Even a 10% increase in sales of proprietary software wouldn't create new jobs, or increase tax revenue.
The extra 10% of spending on proprietary software would have to come with a reduction in spending on something else, so the tax revenue would simply be redistributed.
Plus a 10% uptick in sales wouldn't cause software companies to employ anyone new, due to the nature of software it wouldn't require any additional resources to handle the additional sales, so it would just result in increased profits for the companies in question.
Not to mention that a 10% reduction in piracy wouldn't result in 10% more sales, many people who pirate software simply couldn't afford to buy it or are just unwilling to do so... These people would either do without, or use free alternatives. A massive clampdown on piracy would actually benefit free software far more than proprietary.
http://spamdecoy.net - free throwaway anonymous email - avoid spam!
Back in the day I used to know some kids who pirated thousands of programs. Their goal was to collect every piece of software available for the Apple II. They had thousands of programs on thousands of discs..... a huge loss of revenue for the software industry?... not really
They were collectors. They spent all of their lunch money on discs and what software they could.
But they didn't even use it or know how most of it worked. Sure they were pirating, but if a kid pirated visicalc... was it really a loss in revenue? No, they didn't have a reason to use it.
So before everyone assumes that there is any sort of direct loss of income to software companies, they really need to understand the demographics. How many CAD programs is the average teen going to use. Is the average pirate going to use much of what they pirate or do they just want to have it?
Personally, I just buy the few programs I want to use, download GPL programs I need and that is about it, but some people just want to have all of the latest stuff.
Another thought:
Today things are just different.
With the new iphone/ipad apps, the issue of piracy will largely disappear I believe, because the software is too cheap to bother pirating (aka effort) and there are too many (titles) to have for random reasons. Most apps cost less than the average soft drink from a vending machine.
Or people who wanted to be lawyers, but were too dumb to get into law school?
Seriously, you'd have to be really stupid to be able to write such a report and not have heard of opportunity cost. Yes if $X worth of software was bought instead of pirated the software makers would have an extra $X, but someone else (the now not pirating company, or more likely their workers or suppliers) would have $X less.
So any economic benefit depends on the relative multipliers of the software companies and those sombody elses. I put my money on the sofware makers having a much lower multiplier for the local economy.
Or of course they aren't stupid, but are intentionally lying.
And that's ignoring any issue with the whole "people who pirate would buy it rather than not having it at all if we reduced piracy" assumption.
I'll go one step further...
When I was fairly young (and poor) I pirated audio sequencer software and with it taught myself how to record, mix, and produce music. Years later I have purchased this software as well as many other pieces of audio software, hardware, etc that I would NEVER had purchased if I didn't have access to the original pirated software.
Then there was the economist that worked for the mafia Godfather. He would make you an offer you couldn't understand.
For extra money I offer support services to a few small businesses and one public library in my area. Almost all of my work is FOSS related. I whole heartedly agree that proprietary OS / Software companies should try to stop piracy! I hope that they increase their anti-piracy efforts, make purchasing and using the software onerous. I hope they raise their prices to cover the costs of their anti-piracy efforts.
The harder they work to stop piracy the easier it is for me to make more money. I wish them the best of luck.
load "$",8,1
Software pirates (commercial and noncommercial alike) certainly need to be caught and punished. However, when people like the BSA prove themselves to be liars, there aren't any "good guys" in the picture. When the enforcers are as much scumbags as the pirates are scumbags, there is no credibility. It's like being in New Orleans - deal with a mugger or deal with one of the corrupt cops. Hell of a choice.
It should be sufficient to be able to say "Software is not a pirate's property for him to take or use, but they're doing it anyway" and prosecute on that basis. An argument of "I wouldn't have bought it anyway" should be wholly irrelevant. But resorting to histrionics like this just plays into the hands of the pirates and stirs up anger against the people who should have been the ones on the moral high ground, and makes the enforcers rightfully more despised than the pirates.
Everybody gets what the majority deserves.
I'm not pirating. I'm purchasing $10 to $20 games... or premium 5 year old games marked down to under $20. I won't spend $50+ on a game any more.
"Every mineral and piece of food that comes out of the ground" is also a finite resource. Yes, even crops are finite as they rely on minerals in the ground to grow, and there is only so much space one can use to grow crops.
While technically you are correct you are limiting yourself to just the Earth. While we lack the technology to colonize the solar system or further afield this is not beyond the realms of possibility and, if you consider the size of the Universe, resources are effectively infinite. So the value of a technology which would let use exploit these resources would huge and a good way to create value beyond what we have on the planet now.
Technically, BSA is slandering the "Pirate" population. I wonder if a judge would be willing to hear a case "Pirate Party v. BSA".
Steven
How long do you figure it'll take those morons to figure out that money spent purchasing "stolen" software would take money away from somewhere else (ie: car loans, house loans, food, music...) and the changes predicted wouldn't happen at all?
If you say different, you have declared Uwe Bolle's movies to have a non-negative value, which is plainly false.
It is really hard to argue that selling additional copies of software will create more jobs. Maybe little with packing of software boxes and tech support. Otherwise all extra copies of software sold are pure profit. All it achieves is to transfer money from software users to software companies shaderholders.
> This pool analogy has gone too far.
Yes, yes it has.
This study is untruthful commercial speech. As such, it is not protected by the First Amendment. Competitors and State Attorney Generals should be suing the collective asses off the BSA.
As the BSA seems to be 100% asses, this will solve the problem nicely.
The BSA are the biggest pack of lying, thieving, scheming cunts I have ever come across - and this is from a person who paid BIG $$$$ and got sold a shitload of fake software on a legit system.
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Voting up, Voting down - If I really gave a fuck about your approval or not, I'd come and ask you.
Piracy is ship to ship armed robbery.
Utilizing the synergization of benchmark e-solutions to pre-workaround action items!
I don't understand how such a comment can get AND KEEP a score of five! If you have mod points, please mod him/her down. I won't repeat the reasons - just read all the comments - they capture the fact that this person has no idea of economics.