87% of statistics are made up
Software piracy losses rise in 2004:
Today Arstechnica posted a follow-up article regarding the skewed methodology used by the BSA to determine the rate of piracy and the total costs associated with it. Apparently this is how they calculated the rate:
According to the Business Software Alliance, manufacturers lost close to US$33 billion due to software piracy last year, a rise of US$4 billion in 2003. The biggest problem region for the BSA continues to be Asia, with piracy rates exceeding 90 percent in both Vietnam (92 percent) and China (90 percent) and 87 percent in Indonesia. Ukraine and Zimbabwe were the biggest non-Asian offenders, with rates of 91 and 90 percent, respectively.
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.In many ways, this is similar to how the RIAA and MPAA guesstimate the revenue lost to "piracy." All other IP issues aside, these organizations essentially inflate lost revenue numbers based upon fuzzy math -- phantom revenues that should be taken with a grain of salt.
Comments (2)
P.M.Lawrence
There are at least three sources of error here:-
- They get their reference figures from people who are willing to talk to them, i.e. they are extrapolating to Microsoft avoiders from Microsoft users (legal or pirate) etc.
- They are assuming all unaccounted for software is new and improperly obtained rather than home grown or legacy software.
- They are assuming that all sales would have been made in that volume at current prices (i.e. they omit the people who would have switched to other legitimate sources like home grown, or done without, at the prices obtaining).
That last is a real killer. It shows an upper bound to lost sales from a price insensitive demand, not the true lost sales that would be shown using a realistic estimate of a demand curve.
Published: June 16, 2005 9:02 AM
Daniel
In a way, it makes sense - They've considered open source applications to be a form of piracy for years - they are just being honest in their opinions now.
Published: June 16, 2005 9:53 AM