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BSA Piracy Study Deeply Flawed 437

Posted by Zonk
from the losing-money dept.
zbik writes "Corante reports that The Economist has blown the lid off the BSA's recent report on software piracy (covered by Slashdot), referring to their methods as 'BS'. 'They dubiously presume that each piece of software pirated equals a direct loss of revenue to software firms.' The BSA has complained that the article is offensive but does not dispute their analysis. Score one for common sense."
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BSA Piracy Study Deeply Flawed

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  • by Anonymous Coward
    BSA is the 'BS' Association.
  • by Anonymous Coward on Tuesday June 14, 2005 @05:20PM (#12817632)
    Your Rights Online: The Sun is Hot
    Your Rights Online: Osama Bin Laden Not a Nice Man
    Your Rights Online: Some Politicians May Be Influenced By Money
    • Some Politicians May Be Influenced By Money
      Okay, that WOULD be news - I was under the impression it was ALL politicians are influenced by money. Or booze. Or drugs. Or cheap hookers. Or all of the above.

      If you've managed to find some that aren't yet, quick - post their names here. There's bound to be a few lobbyists willing to try their luck in virgin territory.

      • Actually, without cameras and recorders about, the one or two politicians I've encountered off the record turn out to be reasonably intelligent people, who genuninely want to try to do what they perceive to be the Right Thing, for the country, their constituents, and themselves.
        None of them are as miserable and corrupt individually as all of them are together.
        • by Darby (84953)
          Actually, without cameras and recorders about, the one or two politicians I've encountered off the record turn out to be reasonably intelligent people, who genuninely want to try to do what they perceive to be the Right Thing, for the country, their constituents, and themselves.

          What, you expected that once the cameras were off that they'd suddenly start being honest?!?
          Bullshitting people is their business, and it looks like they made a sale.

      • I was under the impression it was ALL politicians are influenced by *

        I share your disappointment with most of our elected officials, but there are exceptions [senate.gov]. Russ Feingold was the only senator to vote against [archipelago.org] the PATRIOT Act in 2001. He's truly an admirable leader.
      • by ErikTheRed (162431) on Tuesday June 14, 2005 @05:55PM (#12818042) Homepage
        Okay, that WOULD be news - I was under the impression it was ALL politicians are influenced by money. Or booze. Or drugs. Or cheap hookers. Or all of the above.
        Oh yeah? Well, I'm going to make my own political party! With blackjack! And hookers!

        On second thought, forget about the political party and the blackjack!
      • Ron Paul [house.gov]

        I just got a letter from him today about his views on the DMCRA (Digital Millennium Consumers' Rights Act), and it included the choice paragraph

        I would oppose any federal legislation making criminal the possession or use of some technology simply because it has the potential of being used for some illegal purpose by some potential criminal. I would likely oppose legislation mandating that technology carry certain features designed to prevent copyright infringement, since these mandates exceed Co

    • by eh2o (471262) on Tuesday June 14, 2005 @06:06PM (#12818159)
      In other news today, the BSA announced they are beginning an audit of The Economist.
    • by typical (886006) on Tuesday June 14, 2005 @06:47PM (#12818566) Journal
      The BSA's fraudulent activities cost Linus Torvalds over $300 billion dollars yearly in the United States alone.

      Their bogus numbers have caused people to be frightened away from Linux, which Linus *could* potentially be selling for $1000. The fact that he is making *no money* from each copy of Linux used is due to the fact that the BSA has damaged the perception of Linux so much. As a product technically superior to Windows, it should have taken over by now. That's $1000 per person. There are ~300 million people in the United States, counting every man, woman, and child. (We all know that GNOME is simple enough for a baby to use, so counting babies is perfectly legitimate.) Since Linux is upgraded so frequently, people would buy a new copy about annually.

      As you can see, since the BSA is COSTING LINUS TORVALDS OVER $300 BILLION DOLLARS IN THE UNITED STATES THIS YEAR ALONE, we desperately need laws to protect the starving open source software authors that are being victimized by the criminal activity of the BSA. It is crucial that we receive laws to protect these authors -- all companies choosing a non-open-source software product over an open-source software product should be required to annually submit a report with cost estimates and associated usability/compatibility testing as to why they choose not to use open source software.

      No, it's just not the same. We need whatever PR people the BSA has.
  • by Anonymous Coward

    But I thought "trustworthy" was one of the parts of the scout law! Was I mistaken? Is there some sort of mix-up here?

    I'm so disillusioned just now...

  • Claims (Score:5, Insightful)

    by superpulpsicle (533373) on Tuesday June 14, 2005 @05:21PM (#12817654)
    For any company confident enough to claims they have lost 100,000 copies in revenue. They need to also claim they have increased their market share by 100,000 users.

    • They need to also claim they have increased their market share by 100,000 users.

      Who says they don't? Market share figures are often over-inflated so as to make a company seem more important. If I were you, I wouldn't underestimate the ability of most companies to make the best out of the worst.
    • by Moraelin (679338) on Wednesday June 15, 2005 @04:39AM (#12821528) Journal
      The BSA (and a few others) are basically arguing that if some Chinese kid got a copy of AutoCAD or 3DSMax, that's a lost sale and it litterally means some $6000 lost. Can they possibly present a coherent business plan where it's even possible to enlarge that market there, at those prices, if piracy didn't exist?

      Hello? An average Chinese family's yearly income, last I've checked, is around the $1500 mark. That is, before, food, clothes, rent, etc.

      Take your current yearly salary, multiply it by 4, and ask yourself if you would _ever_ pay that much for a piece of software you don't even really need. Would you?

      Some of that software waved around by the BSA as big losses even I wouldn't buy on a western european salary, and I could afford it easily. E.g., would I pay some thousands of dollars on 3DS Max just to mod a $40 game like "X2 - The Threat"? Because that's the kind of use those pirate kids see out of that software. Heh. Would you? Right. That's what I thought too.
  • by IdleTime (561841) on Tuesday June 14, 2005 @05:23PM (#12817667) Journal
    We all know that their method of determining loss is flawed. Let's say I'd like to play with a program called A, I don't really need it in my business or at home, but it looks nice and maybe I'd use a part of it once. I would never have bought program A at $499 for a one time use and to play around with. I rather download it from somewhere and install it. This would count as a loss of $499 but this is flawed. I would never have bought the program in the first place if I had not gotten it from the net. Why? I can't defend spending $499 on a program I have virtually no use for.
    • by m50d (797211) on Tuesday June 14, 2005 @05:28PM (#12817753) Homepage Journal
      We know it's true, what's news is that The Economist has said so. Normal people and perhaps lawmakers are more likely to listen.
      • I hope so.

        The Economist is great. However, they have say many things (That I agree with) that will *never* come to pass.

        For example, the Economist staff openly advocates the legalization of Cocaine in the U.S.
        Why?
        Because this would be a more *effective* policy for reducing drug use in the U.S., let alone reducing the harms of the Cocaine economy.

        Can you imagine the U.S. *ever* legalizing Cocaine?
        I think not. Look for lawmakers to continue parroting the BSA (BS) line.
        • by Anonymous Coward on Tuesday June 14, 2005 @06:55PM (#12818623)
          As someone who leans libertarian on a lot of issues, I find it sad that the Republican party has bought its power by aligning itself with social conservatives who seem intent on legislating morality.

          It's my belief that they've done so because the leadership knows full well that such laws would never apply to them or their families. If they want to have sex with hookers, use cocaine or have abortions, they have the means to safely do so in a way that won't bring them into contact with the authorities. It's only the poor who have to abide by these laws. Hell, a cokehead alcoholic can get pretty far these days with the right connections.

          • Find out what happened to China with opium, and then consider whether it's a good idea. I myself am worried about a scenario wherein drugs become as widely abused as television. In our extreme consumer society, is that not a possibility?

            There are many things that cause people to fail: laziness, mental illness, addiction...

            We can do something about the addiction. The laws are not perfect, and will never make drugs disappear. But they make most people avoid them most of the time. At least enough to kee
    • by Bedouin X (254404) on Tuesday June 14, 2005 @05:29PM (#12817755) Homepage
      Just about every piece of software that I use professionally now - Photoshop, Visual Studio, Oracle, SQL Server, NT Server, Netware - I pirated as a teen. I probably wouldn't have learned them otherwise. What is wouldn't - not couldn't.

      Now that I am gainfully employed, I am very vigilant about making sure that my employers always keep me equipped with the very latest versions of them all, even if I don't use them.

      I'm not saying that what I did as a teen was right, but I know for a fact that a few pirated copies in 1996-1999 have resulted in thousands of dollars in purchases over the past 6 years or so.
      • ...I know for a fact that a few pirated copies in 1996-1999 have resulted in thousands of dollars in purchases over the past 6 years or so.

        It's funny how this is never included in any industry estimates of "losses" due to piracy. About 90% of my video game library is a direct result of the software piracy I and my friends engaged in. I also noticed this law at work: when I don't pirate games, I don't buy any.

        • Yeah me too. I pirated Doom, Descent, Quake, and many other games when I was younger. But those games are the very reason why I bought Doom 3, Doom 3 ROE, Far Cry, Half Life 2, Halo, and Final Fantasy XI just within the past year or so - I've been legit since Quake 2 ;-). I wouldn't dream of pirating a game these days.
        • Same here. When I was younger with no income I pirated every game I played. Once I started making money I started buying games. Had I not pirated those games earlier, it's unlikely that I would be as much of a gamer today as I was back then.

          In other words, pirating those early games that I never would have purchased has resulted in actual income for the industry. They should have encouraged it. Some did, by providing good quality demos and shareware.

          I purchased UT2004 solely based on my experience with th
    • not to troll, if you don't want to buy the software (assuming the software you are talking about is non free beer software), why should you be able to use it without cost? what is the threshold of use that determines whether you should have to pay for software?

      • by forkazoo (138186) <(wrosecrans) (at) (gmail.com)> on Tuesday June 14, 2005 @05:33PM (#12817802) Homepage
        No reasonable person is arguing that you shouldn't pay for software. The argument is simply that not paying for software doesn't always hurt the company that makes the software. That doesn't make it right. That doesn't make it legal. But, when some 15 year old pirates a copy of Oracle, the company hasn't lost any money.
        • by IdleTime (561841) on Tuesday June 14, 2005 @05:44PM (#12817923) Journal
          That was not a good example, Oracle offers all their software free of charge as long as you don't use it in a commercial setting. Go to www.oracle.com and download the Enterprise version of the database and use it as much as you like on your own private box. If you are going to use it in a business, you have to pay for it. Quite reasonable I would say...
          • He lies not!

            Proof. [oracle.com]

            Holy crap. Go Oracle.
            • Holy crap. Go Oracle

              Not to break your enthusiasm, but when you need an industry strength database engine Sybase [sybase.com] can do better then that.

              Their flagship product is available completely free of charge [sybase.com] for the Linux platform.

              Free as in beer that is and some restrictions apply:

              • A maximum of 1 engine (CPU) configurable
              • Maximum data storage of 5GB
              • Maximum 2GB of total memory configured

              Else then that you're completely free to use it in a productive environment and for a lot of such environments the restr

          • It is actually a good example of a company who understands that concept. The realise that a home user isn't going to pay the massive license for Oracle. They'll either pirate it, or go with something else. Since they aren't losing any money to the piracy since it's something they'd never pay for, might as well just make it free.

            Many companies would do well to learn from their example.
      • by h4rm0ny (722443) on Tuesday June 14, 2005 @06:08PM (#12818184) Journal
        what is the threshold of use that determines whether you should have to pay for software?

        The threshold is found at the high-point of the graph of piracy vs. social benefit.

        When measures to prevent piracy are more damaging to us then the allowance of piracy then we stop and accept a level of piracy. I'm thinking of obvious things like DRM, but also less obvious things such as a company getting too powerful and restricting choice.

        Where the line is drawn is open to fine dispute, but that is the principle. Someone could discover a universal cure for cancer tomorrow and decide not to sell it at all, or only to their friends. Some people here on /. would argue it is their right, but most would say society had every right to kick his door down and take it. In fact this situation exists - it's the US pharmaceuticals industries vs. poorer countries. A good example of the principle we use to draw your threshold.

        You could also look at setting this threshold according to need. If you regard MS Office as a luxury item, then there is no threshold. But if you regard understanding of how to use it as a need in the modern world, then maybe you would say that those who can't afford it do have a right to pirate it. Losing out on an education because you're poor is not a good statement about society.

        Just illustrating ideas about where you would define the threshold.
    • Because it's software (information), you haven't prevented them from selling it to anyone else, either! They've lost no assets - they can still sell it to anyone else they want!

      --LWM
    • by 99BottlesOfBeerInMyF (813746) on Tuesday June 14, 2005 @05:32PM (#12817796)

      That is more or less why non-commercial copyright infringement was not a crime up until the 70's. More important in this particular study, however, is that they are just guessing how many pieces of software are on an average computer, multiplying by the number of known computers in operation, subtracting purchases known to the BSA, and claiming that is the amount of pirated software. Then they multiply by the average cost of software.

      So where does the copy of FreeBSD I downloaded and installed on a computer without an OS fit in? It's easy, I didn't buy the OS or any of the software so this is counted as one whole computer worth of pirated software. Where does the Windows machine I have sitting here only to run Firefox, IE, and Cygwin fit in? It is probably considered by their study to be half a dozen pirated programs. All freeware, small shareware, or just computers that don't run as much software as the BSA thinks the do (should?) are counted as piracy and lost revenue.

      This is nothing more than a blatant attempt to lie to the public and to many governments in order to provide justification for their unjustifiable actions. Sad and sickening.

    • by Frymaster (171343) on Tuesday June 14, 2005 @05:36PM (#12817838) Homepage Journal
      We all know that their method of determining loss is flawed

      it's all about elasiticity. anyone who has taken a 100-level course in economics (as have apparently the editors of "the economist". big surprise there) should know. a quick rundown is here:

      http://www.quickmba.com/econ/micro/elas/ped.shtml [quickmba.com]

      most software is highly elastic to most people. playing with this or that nifty piece of software may be fun for an hour or afternoon but unless it's a killer app, they would, given the choice, opt to not use the program rather than pay.

      it's like the classic example of the pay-for park. a hundred people go to the park on a sunday afternoon, so a government beurocrate determines that if the city charges a $10 admission, the profit will be $1000 every sunday. the toll gates go up but, to the surprise of the beurocrat, nobody shows up to buy a ticket.

    • Actually, that use wouldn't count in this study. They estimated piracy based on surveys of how many people said they used the software. If you're not using it, it doesn't count as a pirated copy of the software, even if it's on your disk ready to be used.

      That doesn't mean the study isn't stupid and wrong, but I'm just saying your case doesn't count.

      Many companies offer some sort of time-locked "try before you buy" for precisely this reason: let the user figure out if they want it. Unlike with, say, a car
    • OTOH, if that program is Photoshop (as an example) and you only need it once in a while on an occasional image, then you are using it, and more to the point, the fact that you have it and use it means that you didn't purchase a cheaper program like Elements or Paint Shop.

      It may not be that you ever would have purchased PS, but as long as you have it and use it you're not purchasing a cheaper alternative either.

      And besides, if you have no use for it, then why do you have it?

    • You could have payed somebody who has legally aquired the means of production $X/hr to do so. By pirating the software for one time use you ensure that the guy who would use it all the time can't find work and he too can not justify the cost.
    • So basically you can justify copying ANY piece of software by simply stating that you wouldn't have paid for it anyway??

      If everybody thought the way you do, there wouldn't be a software industry.
  • If you prove the antipiracy studies' use of bogus assumptions, the pirates WIN!
  • indeed bs (Score:2, Funny)

    by Anonymous Coward
    if all those people couldn't have found a .torrent of photoshop cs 2, i'm sure they would have bought it...
  • BSA Acronym (Score:2, Funny)

    by alexhs (877055)
    The Economist has blown the lid off the BSA's recent report on software piracy, referring to their methods as 'BS'.

    BSA = 'BS' Analysis ?
  • BSA PSed off (Score:5, Informative)

    by Bedouin X (254404) on Tuesday June 14, 2005 @05:23PM (#12817679) Homepage
    SIR - Your article on software piracy was extreme, misleading and irresponsible ("BSA or just BS?", May 21st). The headline was particularly offensive. The implication that an industry would purposely inflate the rate of piracy and its impact to suit its political aims is ridiculous. The problem is real and needs no exaggeration.
    Beth Scott
    Business Software Alliance
    London


    Boy these people's heads are stuck so far up their asses that they can see through their mouths... you just can't make this stuff up.
    • by Stanistani (808333) on Tuesday June 14, 2005 @05:28PM (#12817749) Homepage Journal
      Dear Madam:

      The 'BS' in the headline was simply referring to your initials...

      No harm done.

      The use of the word 'Madam' in our letter, on the other hand, is deliberate.

      Sincerely,

      The Economist
      • by Tackhead (54550) on Tuesday June 14, 2005 @06:10PM (#12818209)
        > > SIR - Your article on software piracy was extreme, misleading and irresponsible ("BSA or just BS?", May 21st). The headline was particularly offensive. The implication that an industry would purposely inflate the rate of piracy and its impact to suit its political aims is ridiculous. The problem is real and needs no exaggeration.
        > >
        > > Beth Scott
        > > Business Software Alliance
        > > London
        >
        > Dear Madam:
        >
        > The 'BS' in the headline was simply referring to your initials...
        > No harm done.
        > The use of the word 'Madam' in our letter, on the other hand, is deliberate.
        >
        >Sincerely,
        > The Economist

        Dear Economist:

        Your reply to my earlier letter was extreme, misleading and irresponsible ("Madam", June 14th). The deliberate choice of the word "Madam" was particularly offensive. The implication that an industry would purposely inflate the rate of piracy and its impact to suit its political aims is ridiculous. Whether you refer to unpaid sex acts as "open source", "trying it before you buy", or "blocking the auto-updating daemon with a heavy-ass firewall" the threats posed by individuals slutting around, living together, and the signing of marriage contracts are real and need no exaggeration!

        Beth S., Madam
        Bunnyranch Sex-worker's Alliance
        Nevada

    • by SirSlud (67381)
      > The implication that an industry would purposely inflate the rate of piracy and its impact to suit its political aims is ridiculous.

      You're right, to propose that they inflate the rate of piracy and its impact to suit political aims is rediculous. We do it to increase profits!
  • by suresk (816773)
    It would be interesting to see a real estimate of the 'costs' of piracy, compared to the benefits companies reap from their products being pirated. It would be extremely difficult to accurately measure, but I bet the results would be that piracy just doesn't cost that much.

    Not that I in any way condone piracy :)
    • The problem with that is the same as the original study - you can make it sound any way you want just by changing a few key assumptions up front. All your study would do is make some research firm some dough.
  • Referer blocked (Score:4, Informative)

    by alexhs (877055) on Tuesday June 14, 2005 @05:25PM (#12817703) Homepage Journal
    The economist is refusing connexion with Slashdot as referer. Simply copy/paste the link in a new tab.
  • by gowen (141411) <gwowen@gmail.com> on Tuesday June 14, 2005 @05:27PM (#12817721) Homepage Journal
    Much as we might laugh at the BSA's (don't they make guns and motorcycles?) figures, illegal software distribution (I refuse to call it piracy until is bad for open source. Every low budget company that copies top-of-the-line software that it can't afford is the loss of another business that might be persuaded at the cost efficiency of a Free Software solution.
    • illegal software distribution (I refuse to call it piracy until is bad for open source
      should read :

      "illegal software distribution (I refuse to call it piracy) is bad for open source"
  • I was at the AppleFest Boston in 1983, where Steve Wozniak brought up that point in the piracy debate/round table. Of course that was after he ducked under the table to put on his eye patch and hat. Before that he was quoting BSA type figures while being interrupted by the phone where he answered "just type BRUN CHOPLIFTER"
  • My view (Score:4, Insightful)

    by Soul-Burn666 (574119) on Tuesday June 14, 2005 @05:31PM (#12817770) Journal
    1. The general public who uses "pirated" software wouldn't have bought it anyways, hence there's no loss of income. Moreover, they pretty much act as free beta testers.

    2. Most companies who use commercial software do pay the licensing fees, so no loss of income. However, companies that decide to switch to cheaper, possibly opensource solutions are in fact loss of income for the software vendors. Nonetheless, switches like this are completely legal. So again, no loss of income due to illegal actions.

    The BSA is full of it.
    Those who use pirated software wouldn't have bought it anyways and even if forced (as in bigbrother) to not use a certain piece of software without paying, they would have found alternative applications and still not pay up.
    Those who do pay are getting fed up with the EULAs, crappy software and prices then turn to cheaper alternatives.
  • by parvenu74 (310712) on Tuesday June 14, 2005 @05:32PM (#12817787)
    Just ask Microsoft -- if not for so many pirated copies of Windows all over the world they would have lost market share to Linux or something else. They just settled a piracy dispute with the government of Thailand. THOUSANDS of government computers had pirated copies of Windows and Thailand settled with Microsoft for $1 per computer. The last time I checked on NewEgg.com, an OEM copy of WindowsXP Pro costs $140. Therefore, it's worth $139 / machine to Microsoft to make sure Linux is *not* installed...
    • Brazil's Response (Score:5, Informative)

      by Trinition (114758) on Tuesday June 14, 2005 @06:00PM (#12818087) Homepage

      You've just gotta love Brazil's response [technologyreview.com]:

      "We're against software piracy. We believe Microsoft's rights should be respected. And the simplest way to respect their rights is for Brazilians everywhere to switch to free software."

  • by My_guzzi (306998) on Tuesday June 14, 2005 @05:33PM (#12817804)
    The people (guess Who) that paid for that report got the report that they want. Just what is new about that.
  • by lugar (561993) on Tuesday June 14, 2005 @05:36PM (#12817843)
    Let's see...

    They estimate the amount of software on each PC and then subtract sales revenues. What is left is pirated software? Talk about a loophole in their logic! Based on their logic, any piece of freeware that is installed on a computer is revenue that BSA considers lost.

    Though if you consider who is partners with the BSA, it's not surprising they'd consider Linux and Openoffice to be "warez"!

  • Why doesn't Slashdot have a separate "copyright" section?

    It's kind of weird that all copyright/piracy/P2P articles show up in the "patents" section,

  • How odd... (Score:5, Interesting)

    by MaestroSartori (146297) on Tuesday June 14, 2005 @05:39PM (#12817868) Homepage
    From TFA:
    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.
    So, if there's 3,000,000 people with an operating system, but our members have only sold 2,000,000, that's 1,000,000 pirated copies of our member's operating systems! Call the police/FBI/attack-squads!!!

    Surely that can't be how they work it out. Anyone ever had one of these IDC surveys? How specific are they, would they allow them to filter out software by publisher/developer so that for instance GIMP and Photoshop don't both show up as "Graphics Tools"? If not, that means every copy of GIMP would be a loss to Adobe!

    (Note - it wouldn't surprise me if that is exactly how it works, and that it was entirely deliberate, but that's a different matter...)
    • Re:How odd... (Score:5, Insightful)

      by ewhac (5844) on Tuesday June 14, 2005 @06:04PM (#12818149) Homepage Journal
      So, if there's 3,000,000 people with an operating system, but our members have only sold 2,000,000, that's 1,000,000 pirated copies of our member's operating systems! [ ... ] Surely that can't be how they work it out. [ ... ]

      Nope, that's exactly how they work it out. Download and read their "study" yourself (the methodology section is toward the back). Their "piracy" estimates are based on nothing more than wild guesses as to how many copies "should" have sold, given the number of computers out there.

      Then, just for fun, they turn around and claim to their shareholders that sales exceeded expectations. Well, which is it, Chucko? Either you sold less than you anticipated (inflating the "piracy" figures), or you sold more (inflating your stock price). Either way, your market projections are way off.

      Schwab

  • Once in a while... (Score:5, Interesting)

    by erroneus (253617) on Tuesday June 14, 2005 @05:40PM (#12817879) Homepage
    ... some Microsoft (related?) sales person calls my company and asks me about any plans for upgrading to whatever it is they are trying to sell at that moment. I get the pleasure of stating, "we're attempting to reduce our use of Microsoft software" and when asked, I explain that the BSA audit our company went through some years ago soured many people on Microsoft so badly that we're steadily seeking alternatives.

    It's not a full or heavy press at the moment, but I believe there will be a day...
  • The Economist.

    Deep under cover, the Economist works hard to blow the lid off the scandalous BSA.

    But the BSA has a few tricks of their own, and their own army. People around the Economist mysteriously start dying and/or disppearing.

    The Economist is determined... to blow the lid off this story.

    And then the final scene - it's revealed to the Economist that he's really a warrior from god, and that the BSA has been heavy into the occult and needed the lies of humanity to feed the gate to revive Satan (playe
  • Firsthand Experience (Score:3, Interesting)

    by AgentStarks (569112) on Tuesday June 14, 2005 @05:46PM (#12817945)
    A company I worked for went through a BSA audit including Microsoft Office among others. When figuring their "penalty" for office, they used a 2x multiplier on retail cost. Of course they did it seperately for a full copy of Word, Excel, Powerpoint, etc... making each copy of Office to be $2400.
  • Article (Score:4, Informative)

    by timothy_m_smith (222047) on Tuesday June 14, 2005 @05:55PM (#12818040)
    BSA or just BS?

    May 19th 2005
    From The Economist print edition

    Software theft is bad; so is misstating the evidence

    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".

    Intellectual property

    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.

    The problem is that the economic impact of global software piracy is far harder to calculate. Some academics have shown that some piracy actually increases software sales, by introducing products to people who would not otherwise become customers. Indeed, Bill Gates chirped in the 1990s that piracy in China was useful to Microsoft, because once the nation was hooked, the software giant would eventually figure out a way to monetise the trend. (Lately Microsoft has kept quiet on this issue.)

    The BSA's bold claims are surprising, given that last year the group was severely criticised for inflating its figures to suit its political aims. "Absurd on its face" and "patently obscene" is how Gary Shapiro, boss of the Consumer Electronics Association, another lobby group, describes the new ranking.

  • by futuresheep (531366) on Tuesday June 14, 2005 @05:56PM (#12818056) Journal
    Bilbo What have I got on my PC?

    Gollum Not fair! It isn't fair, my precious, is it, to ask us what it's got in its nassty little PeeCeessssssesss?

    Bilbo What have I got in my pocket?

    Gollum Sssssss. It must give us three guesseses, my preciouss-three guesseses.

    Bilbo Very well! Guess away!

    Gollum Photoshop!

    Bilbo Wrong! Guess again!

    Gollum Sssssss. Autocad!

    Bilbo Wrong! Last guess!

    Gollum Sssssss

    Bilbo Time's up!

    Gollum DOOMIII!-or nothing!

    BilboBoth wrong!

  • Standard? (Score:3, Insightful)

    by Quantum Skyline (600872) on Tuesday June 14, 2005 @06:03PM (#12818134)
    IANAA(ccountant) or an economist, but with all these studies showing that the BSA is wrong or that the Microsoft studies are wrong, and all the controversy surrounding them, isn't there a standard way of conducting these things so that we can have one answer once and for all?

    That's not to say we only need one study. If a study is independently backed up by others, then wouldn't we know the real effects of piracy?
    • Re:Standard? (Score:3, Insightful)

      by MosesJones (55544)

      The only problem here is that certain "independent" analysts are commisioned by an organisation (BSA did IDC for Piracy, Microsoft did... err IDC for Windows v Linux) to do "independent" research that just happens to find the answer that was required.

      Business Analysts, as we've seen with the Stock Market pushing on Wall Street are about as independent as Texas, they like to claim they are, but the reality is they're after the big buckets of pork.
  • by eric76 (679787) on Tuesday June 14, 2005 @06:11PM (#12818218)
    About 15 years ago, I lived in the Nasa area south of Houston for a few years.

    One day I was in a computer store near NASA looking for a software package, but they were all sold out. When I asked why, the salesman said that every time any of the local NASA contractors had a software audit, everyone would rush out to buy legal copies of everything on their machines.
  • Bullshit? (Score:3, Funny)

    by craXORjack (726120) on Tuesday June 14, 2005 @06:12PM (#12818238)
    The Economist has blown the lid off the BSA's recent report on software piracy (covered by Slashdot), referring to their methods as 'BS'.

    Somebody alert Penn and Teller!

  • total BS (Score:5, Insightful)

    by Anonymous Coward on Tuesday June 14, 2005 @06:15PM (#12818259)
    The BSA, what a bunch of jokers. They go around claiming that SW piracy does the SW industry this incredible injustice...

    Well, it's funny that you can hardly find anyone in the SW industry who agrees, who actually know something about SW, like artists and programmers for example. It's only executives who aren't very technical and don't actually understand or use much who claim they're losing vast sums to piracy.

    Want to know who pirates SW the most? People who make SW, and people who ultimately drive purchases of the most expensive SW for business and personal use. I've decided purchases of software selling for up to $16K per seat for entire teams in companies I've worked for, and it all went to staff members who were largely able to use it because they had learned to various degrees on pirated copies.

    If it wasn't for SW piracy, far fewer people would be software expert users and the SW industry would be much smaller than it is. As a result, fewer PC computers would be sold, and we'd generally have a less computationally advanced society. That would obviously effect industries like the internet including commerce, movie special FX, and video game development, which are big economic drivers for the national economy.

    Take Photoshop for example, that ubiquitous paint program. In my entire career I've never met a single Photoshop user, NOT ONE, that didn't sometimes use, and hadn't learned primarily on a pirated copy before becoming employed at a business that would purchase it to match their skills. Many of those people became interested in the field, and THEN went to school for training, because of the ability to try extensively for free. No trial programs don't suffice and never have. Reality is that every single art student has, and needs, a cracked copy. Later, studios buy software to match the preferences of the users, whose opinions are often based on use of pirated SW.

    *** SW "piracy" = free advertising = increased market growth. ***

    You can say the same for movie FX, or game development. Try and find people in those industries who don't give a large credit in their education to pirated software, or who would be less likely to be in the industry, and therefore not purchasing SW, if it wasn't for piracy. It's the same for many other industries. Even many secretaries and business software users have had access to pirated software to learn it, give it to friends, etc, which eventually supports a purchase in SW, and is like free advertising for the SW makers.

    If it was possible to magically end all piracy in the US today, you'd see SW revenue and computer sales plummet in the short term, and overall national competitiveness drop in the long term.

    These BSA bozos really do have their heads DEEP up their asses.

    Companies like Adobe for example should be THANKING SW piracy for thier stock price.
  • With all the users admitting to piracy in this discussion, either now or in the past, I'm sure the BSA subpoena for Slashdot's records on y'all is already being drafted.

    While we're at it, do any of you want to admit to smoking pot, snorting coke, distributing a virus, or murdering a hooker? :-)

  • Software Piracy (Score:3, Interesting)

    by Tanubis (815015) on Tuesday June 14, 2005 @07:43PM (#12819011)
    What constitutes fair price for a block of code in a free market? What, truly, is the worth of a piece of software? When it comes down to it, a software company publishing a piece of software is much like an author publishing a book online or a composer creating a song - they are selling an idea, not a physical object that requires resources to duplicate or a service that requires people to perform it. People tend to make comparisons for the sake of expediency between pieces of software and services that require human power or products that require physical resources.

    When someone downloads a piece of software they didn't pay for using something like bittorrent, there is absolutely no direct cost to the software company. Consider for comparison stealing a tool from a hardware store and driving away from an auto-shop without paying for the repair service. In the first case, the company that made the tool and all the people that formed the transportation bridge to get that tool to the store suffer a direct loss. They had to physically create something and physically transport it, and that requires resources. In the case of the auto repair, you've just cost some poor smuck an hour or so of his time - he was repairing your car. If he doesn't get anything back from his efforts because you cheated him, you've stolen his time.
    Now for the software company. They researched and designed something, and in the end engineered a piece of software that acts as a tool on your computer to produce something you want. But when you download the tool from someone illegally over something like bittorrent, what are you taking from the software company? You duplicated the code for a total cost of $0. They didn't expend effort creating a CD and shipping it into a store - you haven't even stolen the transport cost. There's no physical object being stolen - they don't require anything to create more copies of the code. In fact, you could continue pirating the software from them left right and center, and outnumber their actual product sales by 10 to 1, and it wouldn't hurt their product sales at all. It makes no difference to Adobe if I download one illegal copy of PhotoShop or twenty million illegal copies of PhotoShop. Twenty million times zero is still zero. The only argument they can pose for my actions costing them something is that they have a legal right to demand any sum of money they choose from you when you use their software, and because you bypassed their right you cost them the money you would otherwise have been forced to spend.

    In a capitalist society we need to reimburse people reasonably for the time and effort it takes to think up new ideas, and for the time the software companies spend creating their software - otherwise one could argue that we wouldn't get any new ideas or software developed. Because of this, we created copyright law. Copyright law is designed to allow people to profit from their ideas by giving them rights over how people use that idea, and the right to take money from people who use their idea.
    Reasonably, however, if a mathematician designs a new formula that revolutionizes computers and allows circuits built using his idea to operate 500 times faster than they do today, it seems a little unreasonable for the mathematician to demand that every single computer made using his idea pay him a royalty of US $5,000,000. In a similar way, is it reasonable to permit software companies to charge whatever sum they feel for a piece of code that in the end is nothing more than an idea? The code is well thought out, and complicated, and took time to make. Yes, society should compensate them for that. Yes, people who spend their time working this way should be well compensated for their efforts and be made wealthy. But there should be a limit as to what they can demand, and that limit is set by unspoken public consensus if not in our legal system. That unspoken limit being surpassed is what results in software piracy. When the average person who w
  • by ScrewMaster (602015) on Tuesday June 14, 2005 @09:08PM (#12819585)
    I've never worked for a company that suffered through a BSA audit, but does anyone know what it is that makes a corporation roll over and allow such a thing to happen? I keep hearing about how they inflate the cost of any "pirated" software they discover to ridiculous proportions, and we've all heard their TV and radio commercials, "Remember! It just takes one disgruntled employee!" Does it? And what, exactly, is it? Do they threaten businesses with frivolous, expensive lawsuits to get them to comply?
    • by Cheeze (12756) on Tuesday June 14, 2005 @10:42PM (#12820211) Homepage
      Do they threaten businesses with frivolous, expensive lawsuits to get them to comply?

      Most certainly.

      They basically threaten you, and if you don't "comply" they show up at your company and interrupt your business for a few days, causing lots of lost productivity. In the end, you get fined for stupid things like having unregistered winzip and having a few extra copies of windows that you shouldn't be running. Your cost is several days of zero productivity, a hefty fine, and maybe jailtime. Their cost is the price of a few faxes, the lawyer costs for filing, and very little time helping with the raid.

      It's more like extortion. The old "give me money or I talk" game. They don't really have to have any hard evidence of piracy to get a court order and a few federal officers to raid your business.

      The best thing to do is to just be in compliance. If you don't have the money to spend on the software, find free alternatives.
      • by ScrewMaster (602015) on Tuesday June 14, 2005 @11:07PM (#12820344)
        Every corporation I've ever worked for has simply looked at software as a normal cost of doing business like any other expense, and that's as it should be. I mean, regardless of the BSA or the SPA or any similar bunch of useless people, illegally obtained software is just too much of a liability. A single lawsuit would wipe out any savings.

        That's why I have to wonder where the real value of an organization like the BSA comes from, if any. Seems to me it's more like the RIAA lawsuit game ... misuse the law to intimidate a few so that the rest will fall into line. At some point, U.S. law is going to have to be adjusted to make such abuses more costly to the abusers. Besides, with product activation becoming the rule for major applications nowadays, it seems that they'll eventually become obsolete.

        They don't really have to have any hard evidence of piracy to get a court order and a few federal officers to raid your business.

        And that, I think, is the crux of the matter. I have a problem with private organizations being able to take punitive measures against companies and individuals without hard evidence, or for that matter without any real due process. In effect, this gives them the power of a private police force. So what happens when they screw up your business for a few days and find out that, gee, their disgruntled-employee "informant" was lying and the target is in full compliance with the law. Do they reimburse you for all the lost productivity? Ask your forgiveness? Buy you a chocolate sundae? What?

        Corporate vigilantism, I guess you could call it. If it's not already illegal it most certainly should be.
  • by Kjella (173770) on Wednesday June 15, 2005 @03:25AM (#12821309) Homepage
    The higher the price, the less demand there is. At retail price (high) you would have I = p1*q1 = big*small, with piracy (low) you have I = p2*q2 = small*big. That is the maximum the market will ever pay you. But to calculate losses, they take p1*q2 = big*big.

    Also, as a special case, for free the pack rat mentality kicks in. If you got a cd full of mp3s, would you keep it even if it wasn't really anything you need? Many people would, just a few hundred MB on their HDD. Instead of asking "Why should I pay for this?" the question becomes "Why not? It's free, might come in handy some day."

    Kjella

"When it comes to humility, I'm the greatest." -- Bullwinkle Moose

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