p2pnet - rss feed: BSA Shock Horror loss report
p2pnet.net News:- Some people believe entertainment cartel statisticians employ moon-gazers to dream up their numbers for ’studies’ and press releases. Because, like movie and record industry claims that file sharing is robbing them of billions of dollars in sales, the ‘loss’ projections are invariably based on thin air.
It’s one thing for p2pnet to say that. But it’s another when Britain’s The Economist states, “It sounds too bad to be true; but, then, it might not be true,” referring to the recent BSA (Business Software Alliance) report which claims that losses due to fakes product increased from $29 billion to $33 billion.
But, as we said at the time, “It doesn’t explain, in its new ‘independent’ study, how it’s able to reliably calculate this.”
The Economist to the rescue!
“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,” it says. “The BSA provided its data. The judge chose to describe the effects of piracy as nothing less than catastrophic’.”
The article is talking about the DrinkorDie judgement in which a group of software collectors were jailed because they were said to have caused incredible losses to the software industry.
“But while the losses due to software copyright violations are large and serious, the crime is certainly not as costly as the BSA portrays,” it goes on. “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.”
Something you think we should know? tips[at]p2pnet.net
See:-
at the time - BSA ‘piracy’ figures, p2pnet, May 18, 2005
The Economist - Dodgy software piracy data, May 19, 2005
DrinkorDie judgement - www.drinkordie.com, p2pnet, May 11, 2005
May 27th, 2005 at 1:29 am
Recall in the Kevin Mitnick case that the Government tried to get Motorola to claim that Mitnick’s ’stealing’ (downloading or copying) of the source code for their proprietary version of Unix cost Motorola “tens of millions of dollars.” By the time they got around to sentencing Kevin, Motorola was selling the source code to college students for $100, yet the Government STILL put the “tens of millions” figure in play. In fact Motorola lost NOTHING because Kevin didn’t do anything with the source code.
Does the BSA really think that everyone who might have gotten Photoshop CS2 off a torrent or a warez site was going to shell out several hundred dollars for it? More likely they were going to wait until Photoshop Elements went on sale at Staples (with a rebate too) so the end cost was in the $39 to $49 range. That is, unless they decided to buy the $19 shareware photo editor or they really only wanted to turn their pix 90 degrees and get rid of the red eye and found freeware utilities that met their needs. Not everyone with a digital camera is going to be doing 4 color separations for pre-press proofs.
It’s a good thing that the BSA isn’t a publically traded entity, because if the employees of the BSA did all of their math like that, they’d all wind up in the SarBox penetentiary for 475,995 years. That’s 5 years for EACH mistake made, assuming consecutive sentences, no parole, and lots of bad behavior, the worst case scenario. They deserve nothing less.
May 27th, 2005 at 2:51 am
Well heres the downside. I have a legal OS, purchased and paid for at the time I bought the computer. However due to security holes I have installed it too many times for the liking of the maker and the code has been blackballed. If they are counting on me to buy yet again another OS they can kiss my butt. Ain’t gonna happen for such a buggy program that allowed this to happen in the first place.
May 27th, 2005 at 6:06 am
The thing is, these kind of organisations, don’t really exist to stop piracy at all. They exist to provide tax benefits for their sponsor software companies. By providing “evidence” that piracy costs huge amounts to their sponsors, those sponsors are then able to justify spending money “fighting piracy” which they claim as an expense on the company tax return. Hell they’re probly reporting those “losses” as actual lost revenue and getting a tax break on it.
Of course the larger the amount of money “lost” to piracy, the bigger the amounts the companies can get away with claiming on their tax. Which is why piracy always has such huge numbers attached to it.
Another reason they really don’t want to succeed at stopping piracy is they’d lose their jobs.
May 27th, 2005 at 12:58 pm
I guess this is what you would expect from an organization calling itself the ‘BS’-A.
May 27th, 2005 at 12:59 pm
Please send me a check for $1,550,000.
Because of the artificially inflated high prices charged by your members, I was unable to afford a modern operating system for my computer. I was also unable to afford the accepted word processor for that operating system.
Because I could not afford this OS and word processing package, I was unable to write a resume that had a professional appearance.
Because my resume did not have a professional appearance, I was unable to get the good paying job I applied for. This, in fact, by my investigation, had nothing to do with the fact that I was unqualified for the position.
This all stems from the fact that I was unable to afford your member’s software, because they charge prices that prohibit the average user from purchasing it.
Therfore, please submit a check for USD $1,550,000. This is a simple calculation of the lost wages I have suffered at the hands of your members. ($50,000 USD per year * 30 years.)
I have decided to be generous, and not ask for compounded, inflation adjusted wages, as this sum appears to be well over $83 billion.
I await your check.
Regards,
Bryan
May 29th, 2005 at 1:11 pm
A little story.
There are two types of business customers for software: Large organizations with many workstations and employees, small organizations with few workstations or employees.
Large organizations buy the software they use and there are several reasons for this: They need the support that comes with purchased software and to avoid the loss of trust of their employees. They also avoid being blackmailed by fired employees that know that pirated software is used by the enterprise. Sometimes they are simply ignorant of open source freeware.
In this market there is very little loss for the creator of sold software because of software piracy. Because this market is so solid Bill Gates is the richest man in the world.
Then there is the small business and home computer market. Here the tendency is to use much illegally copied and legally copied or downloaded freeware. Clearly the legally copied and downloaded freeware cannot be counted as a loss in sales for by Bill’s economists.
Admittedy there is much copying of for-sale software but this copying may actually increase the sale of for-sale software. Bill’s economists do not realize this when they calculate losses because their too simple mathematical models were made by the economists themselves and they are not professional statisticians or mathematicians.
This is how it all works giving a real life example.
Joe istalls an illegally copied Microsoft Office in his personal computer at home. Because Joe likes the program he decides to use it also in the small family operated company he owns. As time goes by the company grows and Joe needs to hire non family employees. Joe then buys the program he is familiar with, Microsoft Office and Bill Gates get a little richer. As Joe’s company grows he buys more and more copies of Microsoft Office and Bill Gates getes richer and richer. It all started with piracy.
Bill Gates should be thankfull of piracy because it makes him richer. It has made him the richest person in the world.
But Bill Gates’s economists tell him that piracy represent loss of sales and that makes Bill mad, since he is not satisfied with just being the richest man in the world. He wants to own the world. Bill Gates does not realize how much piracy actually adds to his bank account because his economists talk too much with the Alliance staff and with lawyers that have never sold anything other than their overpriced services to sucker enterprises that have more money than is possible to spend.
Being that Bill has so much money, he then foolishly spent some of his money to fight piracy.
He listened to his foolish economists, got his friends at the government to put the FBI into action. The FBI, alleging that they were fighting terrorism raided homes to clean all software from hard disks and arrest the terrorist copiers and downloaders.
Guess what?
The pirates that eventually purchase Bill’s software switched to freeware in droves. Bill Gates becames poorer.
One day Bill realized that he destroyed his businees by stopping piracy. Thus Bill became a promoter of freeware. Everybody switched to freeware. Commercial software was too risky and its purchase only made the unfriendly Bll richer than any human deserved to be. Linux and Open Office took over.
End of story. End of Microsoft.
Rafael Venegas
http://www.gvenegas.com