MESSAGE
| DATE | 2005-05-26 |
| FROM | Ruben Safir
|
| SUBJECT | Subject: [NYLXS - HANGOUT] Copyright Myth and the BSA
|
May 25, 2005
The Economist Rails on Flawed BSA Piracy StudyEmail This EntryPrint This
Entry
Posted by Jason Schultz
If you have a subscription to The Economist, make sure to check out
their great critique of the BSA's latest software piracy numbers (BSA or
just BS?; Software piracy):
IT SOUNDS too bad to be true; but, then, it might not be true.
Up to 35% of all PC software installed in 2004 was pirated,
resulting in a staggering $33 billion loss to the industry,
according to an annual study released this week by the Business
Software Alliance (BSA), a trade association and lobby group.
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. The BSA provided its data. The judge chose
to describe the effects of piracy as nothing less than
"catastrophic".
But while the losses due to software copyright violations are
large and serious, the crime is certainly not as costly as the
BSA portrays. 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.
Category: IP Markets and Monopolies
COMMENTS
SFix on May 25, 2005 01:28 PM writes...
These industry presumptions of loss are almost always flawed. Usually
they assume that every unauthorized copy of their software is an actual
lost sale. While there are undoubtedly some lost sales, these studies
ignore the fact that many, perhaps most people who have the unauthorized
software installed on their computers would do without rather than pay
full price.
Also, as the industry announce $33 billion dollars in "losses" to
piracy, they also announced record profits. Therefore, increased piracy
is actually correlated with increased profits.
Permalink to Comment
Neo on May 25, 2005 03:40 PM writes...
Their methodology is even more flawed than you think. Estimating the
amount of software per PC and subtracting legitimate sales leaves a
residue containing not only infringing copies of software but also
legitimate software that wasn't sold. Losses due to competition from
freeware and open source, in other words, are counted into the "losses
due to piracy"!
Of course, the BSA probably includes the lost sales due to competition
from OpenOffice and Linux intentionally and hopes to pull the wool over
regulators' eyes...
Permalink to Comment
Copyrighter on May 25, 2005 07:04 PM writes...
"But while the losses due to software copyright violations are large and
serious, the crime is certainly not as costly as the BSA portrays."
Certainly?!? There is nothing certain about this. In fact, one could
make an argument that they're underestimating it because the calculation
of software per PC could be biased downwards by people reporting fewer
than are actually installed due to piracy.
But, you know, that runs counter to the Copyfight mantra, right?
Permalink to Comment
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