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Patents Software

BSA Piracy Study Deeply Flawed 437

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 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 suresk ( 816773 ) <[ten.kseru] [ta] [recneps]> on Tuesday June 14, 2005 @05:23PM (#12817686) Homepage
    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 :)
  • by viva_fourier ( 232973 ) on Tuesday June 14, 2005 @05:31PM (#12817774) Journal
    actually, the Boy Scouts of Hong Kong are now being encouraged to become anti-pirates: [com.com]
  • by Anonymous Coward on Tuesday June 14, 2005 @05:37PM (#12817851)
    If the professional* software isn't doing anything to put money in your pocket, and thus justify its purchase, why should you pay for it?

    The second your hobby/tinkering/curiousity results in income greater than the cost of the software, you've got a point.

    Not a strong one, because a copy still isn't theft, but a point.

    *To draw a distinction between Photoshop and World of Warcraft, for example.
  • by Rattencremesuppe ( 784075 ) on Tuesday June 14, 2005 @05:39PM (#12817865)
    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...)
  • by Digital Vomit ( 891734 ) on Tuesday June 14, 2005 @05:40PM (#12817877) Homepage Journal
    ...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.

  • 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...
  • 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...
  • by Bedouin X ( 254404 ) on Tuesday June 14, 2005 @05:44PM (#12817925) Homepage
    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.
  • 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.
  • by grumpygrodyguy ( 603716 ) on Tuesday June 14, 2005 @05:52PM (#12818004)
    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.
  • Comment removed (Score:2, Interesting)

    by account_deleted ( 4530225 ) on Tuesday June 14, 2005 @06:06PM (#12818167)
    Comment removed based on user account deletion
  • Re:How odd... (Score:2, Interesting)

    by RetroGeek ( 206522 ) on Tuesday June 14, 2005 @06:08PM (#12818183) Homepage
    If not, that means every copy of GIMP would be a loss to Adobe!

    Well, in a way, it is. Someone had a need, they might have looked at both Photoshop and GIMP. In the end they opted for GIMP (whatever reason). So Adobe did lose a sale.

    Mind you, if the same person had installed a different commercial editor, that would still be a loss, but would be counted a legitimate purchase?

    Drat this free stuff, throws the calculations off.....
  • 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.
  • by Anonymous Coward on Tuesday June 14, 2005 @06:44PM (#12818540)
    Every programmer and artist I know all learned on pirated SW.

    SW piracy has contributed tremendously to the growth of the SW industry, video game development, movie FX, and countless other industries.

    Comapnies like Adobe OWE a LOT to piracy, as I've never met a PS user who didn't owe some part of his/her PS skills to pirated copies, and who would have been as likly to support a PS purchase without piracy.

    F'ing sick of these greedy, hypocritical, A-holes.

    The reality is that the BSA just bitches and cries wolf because they're trying to have it both ways.

    Nothing new under the sun.

  • by Jackie_Chan_Fan ( 730745 ) on Tuesday June 14, 2005 @07:01PM (#12818668)
    Well thats the exact point. The BSA is nothing more than a lobbying organization formed to help push forward an agenda that benefits software developement, both politically and financially. And of course like all Lobbiests, they're figures are slanted heavily by design to get their agenda made into law.

    Really it has little to do with software piracy. It has more to do with getting the power of LAW to help raise the cost of software, or atleast maintain it.

    I'm still a firm beleiver that if Microsoft sold Office (the full version, bells whistles and all) for $50. Office would HARDLY ever be pirated. It would only perhaps be pirated by younger people such as teens.

    Same thing with Photoshop. There are so many pirated copies of Photoshop installed accross the country. If Adobe wants to truly bring in money they would sell it for a fair price such as $50 and they would get so much money in return. They would profit more than they are now. They would not be losing sales to Piracy etc.

    Look at videogames. Yes Kids tend to pirate games because they run through them like cheap cookies... But the game industry is very successful with their $50 price for software.

    They make a lot of money.

    Really the trick is getting people to pony up $50 each year or 2 for a new version of the software. Frankly i dont see that as a problem because people do it now for $300, to $8000 software.

    Give people a fair price, and Piracy will deminish. The software companies will sell more units, at a fair price, and benefit from greater profit.

    The BSA has so little to do with piracy, other than busting and auditing people. And I see nothing wrong with that, as long as they're fair and honest with their numbers, their penalties and so forth. But clearly they're not because they have an agenda like all lobbiests.

  • by Guspaz ( 556486 ) on Tuesday June 14, 2005 @07:11PM (#12818749)
    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 the demo. Had there been no demo, as is the case for many games, I would never have purchased it. Take Warcraft 3 for example. I pirated it shortly before it's release, and loved it. As a result, I purchased it. Had I not initially pirated it, I would NOT have purchased it several days later.
  • 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
  • Re:Too bad.. (Score:2, Interesting)

    by Tape_Werm ( 857873 ) on Tuesday June 14, 2005 @07:55PM (#12819076)
    This stupid prick is trying to compare two completely different industries. One deals with tangibles, the other does not (minus packaging which isn't necessary). When I leave that tire place, those tires are GONE and need to be physically replaced by reordering. If I were to copy a piece of software, it is not physically gone , it is still there.

    Fact is, this is one of the many symptoms of trying to make the software industry fit into the mold of a regular industrial industry. It's like shoving a square peg into a round hole. But that's what happens when you let old people, with old ideas, using old systems run the world. Perhaps we should enforce mandatory retirement by 40?

  • Re:Brazil's Response (Score:3, Interesting)

    by pkhuong ( 686673 ) on Tuesday June 14, 2005 @08:14PM (#12819202) Homepage
    Brazil is kickass in other ways too. I think its government just loves giving the finger to WTO et al :) They are one of the few countries who have decided to not respect pharmaceutical patents on essential drugs (e.g. against AIDS), and just produce cheap generics for their people, while the talks on making this legal are dragging on and on. It makes me happy to see that some countries see globalisation as a process that can be controlled, not as an unstoppable behemoth. Free trade -> maybe, but only if it represents a net gain for the citizens.
  • 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 TheoMurpse ( 729043 ) on Tuesday June 14, 2005 @10:47PM (#12820238) Homepage
    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 Congress's constitutional authority. I also oppose giving copyright holders the powers to violate individual property rights by hacking into a computer on the mere suspicion that a computer is involved in piracy.
  • 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.
  • Re:Brazil's Response (Score:3, Interesting)

    by Ed_Moyse ( 171820 ) on Wednesday June 15, 2005 @02:10AM (#12821088) Homepage
    I also like their attitude to travel visas - basically they demand the same requirements from you that your country would have for a visiting Brazilian.

    So as a Brit, visiting Brazil is pretty easy (no visa required in fact) ... for someone USA ... less so.
  • by Anonymous Coward on Thursday June 16, 2005 @02:19PM (#12834248)
    Actually, yes. Those ugly EULAs say an 'authorized agent' of the licensor can, at any time and at your expense, verify your licensing compliance.

    If you don't use any software with an EULA like that, then they can't come in without a police escort and warrant.

    Unfortunately, all they'll need to get a warrant most places is an 'annonymous tip'.

    Fortunately, if you really *don't* use any unlicensed software, (especially if you don't use any software produced by one of their partners, you can sue them for the damages caused.
  • by Anonymous Coward on Sunday June 19, 2005 @07:43AM (#12855605)
    "They can't enter; much less audit your premises without your permission. If you do let them on your propery, you've got the right to tell them to leave at any time. If they don't leave voluntarily, you have the right to use force to make them leave, to have them arrested by the police, and to sue them in civil court for tresspass."

    Except, then they show up with real law enforcement and a warrent and give you no choice.

All I ask is a chance to prove that money can't make me happy.

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