Bogus Stats Again: BSA Puts Out Its Yearly Propaganda About Software Piracy

from the aren't-we-done-with-this-yet? dept

Wed, May 16th 2012 2:58pm — Mike Masnick

For the 9th year in a row, the Business Software Alliance (BSA), an organization that mainly represents Microsoft's interest, has put out its ridiculous "Global Software Piracy Study", which argues that tons and tons of software is being pirated, and if only people paid for it, there would be $63.4 billion more going to software companies. We've been criticizing the ridiculously laughable methodology of the report since it began, and even have seen the company that does the research, IDC, admit that the BSA exaggerates what the report actually says. We've done multiple detailed analyses of how the BSA's stats are misleading (or just flat out bogus). And yet, because there are magical numbers involved, the press just loves to parrot the claims without any skepticism.

This year's report is no different. It's more of the same ridiculousness, with a clueless press reporting (totally inaccurately) that the study says that software piracy "costs" the economy $63.4 billion. That's simply not true. What the report did find was not actually surprising or even very interesting. It's that people in developing countries tend to infringe more often. You probably knew that already, but if you wanted evidence for that, you shouldn't look to the BSA and its bogus stats, but a thorough, comprehensive and independent review of the market, such as the one done by Joe Karaganis and SSRC last year. That report found the reason that there was increased piracy in developing markets was because clueless companies don't realize that people aren't going to pay a month's salary for a single digital good.

Of course, rather than recognize it's their own business model failings at issue, the BSA is once again using this report to call for "tougher penalties" for infringement. This despite the fact that no study has ever shown that such penalties actually drive more people to buy.

Thankfully, at least some people are calling the BSA out on its bogus report, such as by noting that it's political propaganda designed to get legislation like SOPA and PIPA passed. The reality, of course, is that it shows how out of touch the BSA is with the innovation economy today, instead working to lock up and protect the interests of its major funders: Microsoft, Symantec and Intuit. Those companies are threatened by upstarts with better business models, and the best they can do is to support legislation that will lock down the internet, causing more harm than good for true innovation.

The "Bogus Stats Again" report from the BSA isn't about dealing with piracy. It's a way of white washing an agenda of protectionism for some large software companies who don't want to compete or to adapt.

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Filed Under: bogus stats, bsa, pipa, software piracy, sopa
Companies: idc, intuit, microsoft, symantec

33 Comments

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Sanjay, 16 May 2012 @ 3:07pm

Any thoughts on how to make it work?
Mike - first, completely agree with your statement on BSA - no one in a developing country is going to pay 1 months, 1 weeks or 1 days wages for a digital good. But that's not the end of the story is it. If you're the producer of that digital good how do you do effective pricing that doesn't reduce your global price down to the price based on the income of the lowest of the developing countries? In other words how do you prevent arbitrage? I would love to charge $1 in the US and $.01 in some developing country but barring some protection scheme (which will get hacked) my US customers will try to buy in the developing country.

You could argue the world is flat and the true global price is $0.01 but that's not necessarily the best revenue maximizing outcome for you as the producer.

So what's the answer?
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:Lobo Santo (profile), 16 May 2012 @ 3:07pm

Phallated Numbers
Having looked at the BSA's site, it's obvious they're lying.
Everybody knows the awesome Linux geeks in Antarctica aren't using paid-for software--and I'm pretty sure that qualifies as "theft" according to the BSA.
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Anonymous Coward, 16 May 2012 @ 3:19pm

Why would anyone pirate Windows? It's bollocks.

Linux FTW
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Richard (profile), 16 May 2012 @ 3:25pm

Re: Any thoughts on how to make it work?
So what's the answer?

Economics says that you have to sell at the marginal price of copying - which is below $0.01.

The answer is to follow the business models of companies like Red Hat et al.
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Anonymous Coward, 16 May 2012 @ 4:04pm

Re: Any thoughts on how to make it work?
So what's the answer?

Bigger tip jar?
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That Anonymous Coward (profile), 16 May 2012 @ 4:10pm

When they say it costs the economy $63.4 billion, what they really meant was we had hoped to extort $63.4 billion this year.
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Dixon Steele (profile), 16 May 2012 @ 4:13pm

Re: Any thoughts on how to make it work?
Price it at what you believe is the revenue maximizing price, don't waste effort trying to combat the piracy that will inevitably result since it doesn't actually represent lost sales, and recognize that the wide user base that results from piracy can be a huge benefit as it locks in your products and encourages others to buy them when they're actually able.

Take the time and money that would have gone into anti-piracy efforts, use it to improve your product and your relationships with users.
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Anonymous Coward, 16 May 2012 @ 4:22pm

Re: Any thoughts on how to make it work?
Simple....switch from basing your business model on products, and start basing your business model on services. A lot of the software that gets released (and then pirated) is based on the fire-and-forget model; the company puts the software out there to buy, the user buys the software, and that's the last contact that the company has with the user. If a user pirates the software, they're skipping the second step, but they aren't really missing out on any added value from buying the real product. This is why software giants like Microsoft have such a large issue with piracy.

As a trivial example, try comparing Google Docs' spreadsheets with Microsoft Office's Excel. They're both spreadsheet programs. Google gives their version away for free, at least for casual users. Microsoft sells Office for somewhere between $100 and $400, depending on the version that you want. Google doesn't get pirated at all -- there's nothing to pirate. Microsoft gets pirated constantly, because lots of people don't want to drop that much money just to open a spreadsheet. And, based on recent trends, Google is taking an ever-increasing amount of market share away from Microsoft, by releasing a free product.

Obviously, one of the major advantages of MS Office is that you can work offline with it. That being said, though...how many people actually produce and update spreadsheets purely for their own use? Most spreadsheets are intended to be shared with someone else. One of the main services Google provides is the ability to share the documents with other people, quickly and easily. Google figured out how to monetize the sharing process, rather than the creation process, and that's how Google makes money off a free product without having to worry about piracy.
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Jay (profile), 16 May 2012 @ 4:46pm

Re: Re: Any thoughts on how to make it work?
But... Google is the pirate king! They have cost the industry millions upon billions upon trillions! How can you apologize for those those low down dirty filthy ratty pirates who do nothing but sure them in a good light?
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Anonymous Coward, 16 May 2012 @ 4:46pm

Sounds more like the BULLSHIT ALLIANCE to me.
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Mega1987 (profile), 16 May 2012 @ 5:35pm

Go back to economcis...
Looks like someone or somebody needs to return to highschool, at least, and study economics once again...

Not to mention, you jokers can't force a laborer to waste what little wage they got to original and high quality but VERY expensive merchandise...
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Anonymous Coward, 16 May 2012 @ 5:59pm

Re:
Hey I have a pirate version of Linux do you want it?
I go it directly from disrowatch :)
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Anonymous Coward, 16 May 2012 @ 5:59pm

Re:
distrowatch.
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Anonymous Coward, 16 May 2012 @ 6:07pm

Re: Re: Any thoughts on how to make it work?
Gnumeric is better than Excel.

Quote:
The open source spreadsheet package "Gnumeric" was such a good clone of Microsoft Excel that it even had errors in its statistical functions similar to those in Excel's statistical functions. When apprised of the errors in v1.0.4, the developers of Gnumeric indicated that they would try to fix the errors. Indeed, Gnumeric v1.1.2, has largely fixed its flaws, while Microsoft has not fixed its errors through many successive versions. Persons who desire to use a spreadsheet package to perform statistical analyses are advised to use Gnumeric rather than Excel.

http://www.csdassn.org/software_reports.cfm
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Anonymous Coward, 16 May 2012 @ 6:22pm

Re: Any thoughts on how to make it work?
I pirate a lot of content and I buy a lot of content. To me, then answer to your question is very obvious. What drives me to pirate in the first place? The crappy experience you've undoubtedly put in front of me. It's that same crappy experience that will drive me to find the version you're offering to Somalians for 1/10th the price. If you want to sell your product for one price in one country and at a higher price to me in the U.S., then you need to make my experience so pleasant that I don't bother trying to find it for cheaper or free.

If I want your video game, it's reasonably price, easy to purchase, DRM-free and comes with a community of fans I can interact with then I'm not even going to care or bother to find out that it's only $0.10 for Columbians.
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Alana (profile), 16 May 2012 @ 6:24pm

Re:
Sad, but true.
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Anonymous Coward, 16 May 2012 @ 7:42pm

so, you dont agree with thier stats, so you create your own, that you agree with.......
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Andrew D. Todd, 16 May 2012 @ 8:04pm

Find A Sponsor
Well, of course, you find a large organization which has been messing around with computers for a long time, and by virtue of that, and by virtue of needing to tie a lot of miscellaneous equipment together, has legacy issues of a kind which no one else has. The very prototype of such an organization is the United States Air Force. Once you find such an organization, try to arrange to be paid a lump sum to fix their problems, rather than being paid on a per-copy basis.

Princes are different from ordinary men-- princes love to give large gifts, as a proof of their own greatness. The same psychology applies to a certain type of official. You find some colonel somewhere in the Air Force Systems Command at Wright-Patterson AFB, who is turned on by your idea, and willing to push it for all it is worth. As for open-sourcing it afterwards, that simply adds to the grandeur.

Now, as applied to India, I would not be terribly surprised if the Government of India were willing to pay surprisingly large sums to have all kinds of software "localized" to a wide range of Indian languages.
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Anonymous Coward, 16 May 2012 @ 9:52pm

Re: Re: Any thoughts on how to make it work?
if you want to work offline,use OO or Libre and then send it to google docs later.
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Anonymous Coward, 16 May 2012 @ 11:21pm

Re:
When the stats are just imaginary loses hell yah I would create my own, I would look into it and make my own calculations and see if it squares with it.

Wouldn't you?
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The eejit (profile), 16 May 2012 @ 11:55pm

Re:
They're using a false equivalence. For example, I initially pirated Skyrim in order to test it out on my machine. When it finally dropped in price to a point I could afford, I bought it.

That's not a lost sale, that's a delayed sale due to basic demand. This is how I build up my collection of games.
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Anonymous Coward, 17 May 2012 @ 12:39am

Re: Re: Re: Any thoughts on how to make it work?
Google = Gold rogers?
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Anonymous Coward, 17 May 2012 @ 1:15am

when any organisation puts out figures that those who have all the information can dispute, why is there no press release or media broadcast that actually does that, ie dispute! how are ordinary people supposed to make an informed decision if they are never fully informed?
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Ninja (profile), 17 May 2012 @ 4:32am

Re: Re: Re: Any thoughts on how to make it work?
Does it work with xls/xlsx? If not we have an issue as most of the market works with M$ products. Same issue with Linux, I'd dump Windows happily but most stuff I use (particularly games) won't work without some sort of emulation (wine comes to mind) or won't work at all.

I agree with Anonymous Coward, May 16th, 2012 @ 4:22pm but M$ still does a good job for the average user. I've tried Libre Office and Google docs. Libre pales in comparison with M$ stuff and while Google offers connectivity in a very easy way it lacks in user interface and functionalities. I should add that SPSS rapes Excel in so many ways it's hard for me to enumerate but we are talking about an $5k software... Too much.
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meddle (profile), 17 May 2012 @ 5:16am

Re: Re: Any thoughts on how to make it work?
I have downloaded stuff via torrent that I already pay for on my FIOS and/or Netflix.

Many of the VOD titles do not let you fast forward or rewind, and they add commercials to something I am paying for.

I travel for work frequently - Hotel WIFI often blocks streaming or if not fast enough anyway. And when I travel out of the country, forget it.

If I could sync my tablet at home and cache stuff from my playlist, I would not be downloading it. Simply put, the content is available for free, and there is more content available than ever before. Every site they manage to block results in 10 new sites. If they would shift their attention to the actual delivery of the product, they could continue to make money. When I pay to subscribe to a service I should be able to use it when I want, wherever I am, on whatever device I have with me, or the service is worth nothing to me.
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Some Other AC (profile), 17 May 2012 @ 5:51am

Re:
That is the wonder and beauty of living in a country/world that is being driven, run, controlled by corporate interest. We, as the good and dutiful sheep, are supposed to believe and extoll any information our corporate masters feed us. It does not matter that the stats or information is easily proven false. Our government and the corporations who lobby hardest(put that government in power) do not want educated and fully informed voters/customers. They want pliable, easily directed sheep/consumers.
We are no longer expected to question the rules and authority. We are expected to follow along blindly.
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BentFranklin (profile), 17 May 2012 @ 6:27am

Those reports about the costs of piracy never seem to mention the costs of patents and copyrights.
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Valis (profile), 17 May 2012 @ 7:39am

Re: Re: Re: Re: Any thoughts on how to make it work?
You're either using the wrong distro or aren't very clued up on Linux. I haven't used any Microsoft product in over five years, everything I need (including games) runs on Linux. It just works!
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Anonymous Coward, 17 May 2012 @ 7:54am

Re:
Congratulations, you just summed up the BSA's perspective.
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Old Scout, 17 May 2012 @ 9:51am

BOYSCOUTS Of AMERICA
I still don't understand why the Boyscouts of America hasn't engaged this company for (BSA) trademark.. I would never grant this (BSA) any legitimacy on that ground alone. I would never listen to what comes out of their corporate offices until they get on their knees and beg forgiveness from the 100s of millions of Boyscouts around the world and then only after they change their name.
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Anonymous Coward, 17 May 2012 @ 8:11pm

Re: Any thoughts on how to make it work?
Sell T-shirts, obviously.
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Akai_Taiyou (profile), 21 May 2012 @ 4:08pm

There is evidence to refute these bogus stats
Hah Tatsuo Tanaka has proved them wrong! Anime DVD sales rise for every 1% of piracy. Since he is the director of the Mitsubishi firm by publishing these facts online he is committing an open act of defiance against the multinational corporations who try to exaggerate their losses.
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robert eldredge, 2 Nov 2012 @ 2:38pm

draining the treasury
ceo of boy scouts 1.3 million compensation is a joke - get your hand out of the treasury. have a great day R E
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