[LINK] BSA Piracy Study

[Tim O'Leary]

At 09:41 AM Thursday 4/3/03 +1000, Chirgwin, Richard wrote:
> >From cNet:
>http://rss.com.com/2100-1028-995011.html?type=pt&part=rss&tag=feed&subj=news
>The study draws one of those "Trousers kill you!" conclusions (ie, everybody
>who ever wore trousers has died, so trousers are the problem). The
>conclusion this study reaches is that "Countries with the lowest rate of
>piracy have the fastest growth in their IT sectors". Thus a correlation is
>turned into causality.

The better Occams conclusion is that Countries that are poor third world 
countries cant afford to buy  proprietary software at current prices but 
wealthy countries can and do buy software at current rent seeking prices.

I have a map somewhere of "illegal software" by country - graphically it 
shows a world divided into the usual haves and have nots. The clear lesson 
is - when software prices approach what the market sees as "reasonable" for 
purpose and importantly VALUE then people and businesses "go legal"


>Now: cause may be demonstrable. I don't know - and I can't see that the BSA
>has tried to demonstrate cause. All that's happening with this study is that
>the correlation is being *reported* as cause. Then, by assuming that the
>correlation is causal, the study concludes:
> >a 10-point reduction in the rate of piracy over four years
> >could generate 1.5 million jobs and $64 billion taxes worldwide,
> >and double the IT sector in countries such as Russia.

"Pirating" also creates jobs and income, its just not where some 
organisations want it to be.  It could even be argued the underground 
economy puts jobs where they belong - with lower paid unskilled persons.

The tax argument is interesting - some pirates will pay taxes - GST on 
blank discs and packaging, tax on overall income, payroll tax, petrol tax, etc.

Transfer pricing by multi nationals like MS is far from transparent and may 
not result in many taxes being paid anywhere.


>Given that the incremental cost of selling another CD is very small, and its
>labour input near-zero, I'd love to know where the "1.5 million jobs" come
>from. Warehousing?

Bullshitting more likely. Pick a figure - any figure now multiply it with a 
dot.com calculator - multiply by number you first thought of write it down 
and cite a study.


>Another point likely to be missed is more complex, so bear with me. The size
>of the IT sector at retail is not the same thing as the "size of the local
>IT industry".
>Reducing piracy in Australia would, admittedly, cause a measurable increase
>in how much IT spending was recorded by the ABS.

aah - reducing so called piracy may not  necessarily increase software 
sales. One motivation is that the software on offer does not justify its 
sale price. Take away "pirates" and many people will stay with an old 
version - say OEM legal win98 or a legal 2 year old Photoshop.

Lets go back to the argument sustained by the correlations at the top. 
Increase countries' (and individuals) wealth or GDP and you will increase 
software sales. Alternatively or simultaneously  bring the price of 
software down to the point where the market sees value and you'll sell 
more. Given that at the margins software costs are bugger all - the 
majority of any sale at *any* price is profit.

aah now i feel better.

Tim

Local writing & original poems Iraq war site:
www.strategos.com.au/iraq

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
TIM O'LEARY
oleary at strategos.com.au
www.strategos.com.au