Slashdot Mirror
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.
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.
"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.
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.
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
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.
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.
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
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)
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.