BSA's Latest Piracy Claims 'Shockingly Misleading,' Says Geist 277
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.
Re:The Business Glass Alliance Announces (Score:5, Informative)
obviously the pirated software has value over the free alternatives
I debunk your argument by naming this common logical fallacy [nizkor.org]. This is a textbook example of begging the question based on a false presumption that some F/OSS alternative exists for every marketed software. By the way, why try to make something a "right" when one can already sue for damages based on simple law that already covers this topic anyway, theft. You might want to rethink your argument.
Re:The Business Glass Alliance Announces (Score:3, Informative)
I totally agree I was only pointing out the absurdity of their statement. This money would not magically appear these firms would stop spending money on something else like say employees to pay for this software. Others would switch to FREE alternatives. Either way no way would forcing every "pirate" to be legit actually result in that number of sales.
On top of that few new jobs would be created even if they were right. It takes no longer to write software that 1000 people use vs 10 people.
What the industry refuses to admit (Score:4, Informative)
Re:Econ 101 (Score:3, Informative)
Re:The Business Glass Alliance Announces (Score:2, Informative)
And it used to be for a limited and reasonable period of time but has been corrupted by content creators over the years (namely Disney). "Pirating" software and other content (some of which falls under Fair Use and is still called "pirating" by groups like the BSA) has become the equivalent for some people of civil disobedience.
"No, I will not give up my seat!" --Rosa Parks, where would we be if she obeyed the law?
Re:The Business Glass Alliance Announces (Score:5, Informative)
I can cite one example of software piracy costing a software publisher: Ernie Ball [cnet.com].
Ball manufactures my favorite guitar strings, the "Super Slinky". In 2000 he was raided by the BSA, couldn't find all the licenses, and settled with the BSA for $100,000. Enraged, he said he wanted all Microsoft products out of his offices and factory. "I don't care if we have to buy 10,000 abacuses," he said, "We won't do business with someone who treats us poorly."
It's now a Linux shop. All the money he hasn't spent on Microsoft products in the last ten years and in the forseeable future is money lost to MS. The BSA's insane zeal to make sure that every piece of software has a license and that the license can be found has cost Microsoft hundreds of thousands of dollars, and will cost far more.
Re:Econ 101 (Score:4, Informative)
You're right that economics isn't a zero sum game. It's not because if imaginary money though, don't be absurd. It's because of this: Lets say I make $30,000 this year. But $12,000 goes to rent and utilities. $4800 on food. That leaves $13,200. So did I get paid $30,000 or did I get paid $13,200. Saying that economics is zero sum is saying that I only got paid $13,200. I didn't, I got $30,000. The fact that I spent it doesn't mean it never existed. It means I spent it. If there was only $30,000 in the entire country and I started with all of it, then spent it, the GDP is over $30,000 even though only $30,000 exists. Because I'll spend it, the people who get it after me will spend it, and so on, it keeps on flowing. GDP is a measure of money FLOW, not of money.
But, some parts are zero sum. If you presume that the amount of pop people drink in a year is a fixed value, then the cola wars are a zero sum game. Coke can only make more if Pepsi makes less. That's got nothing to do with money being finite, and everything to do with demand being finite. And the OP's example is another on of these cases. If Company X has pirated software, and switches to legitimate software, they are spending $1000 more. This extra spending does not increase their income. Now, assuming that they were just sitting on that $1000 then this improves the economy, just like broken windows do. But if they were going to spend that money anyway, it's only a redistribution of wealth. It couldn't possibly create jobs unless you can show that software development companies spend money on different things, and that somehow those different things tend to go to big spenders so the economy is more stimulated. I doubt that's the case. (Plus most of that money, in TFA's example of Canadian companies, wouldn't even be staying in the same country).
Re:What the industry refuses to admit (Score:3, Informative)
Even Microsoft has admitted that they're rather have somebody pirate MS Office than install a copy of Open Office.
Other errors: 43%, not 50%, etc. (Score:3, Informative)
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% [bsa.org], and since 50% is greater than 40%, it must be the correct number. (The actual number was 43% [bsa.org], 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.
Re:Econ 101 (Score:4, Informative)
Economics is certainly a science (at least with some schools of thought), producing a priori true propositions that withstand rigorous logical analysis - like mathematics. The law of diminishing marginal utility, for example, is not a 'pattern', neither is it subject to empirical verification/falsification - it is a priori true as much, or moreso than (depending on which philosopher your talk to), the Pythagoras triangle theorem.
But it's that inherent inability to verify or falsify that makes it a non-science. And for the record, math is not a science, either. Being able to make up a system and then write equations that hold up within that system does not mean that your system in any way models reality. Unless you can empirically test a hypothesis, you're not doing science.