[LINK] Piracy stats don't add up

[Adam Todd]

At 07:58 AM 7/11/2006, Kim Holburn wrote:
>Peer review anyone?
>
>http://australianit.news.com.au/articles/0,7204,20713160%5E15306%5E% 
>5Enbv%5E,00.html
>
>>The draft of the institute's intellectual property crime report,
>>sighted by The Australian shows that copyright owners "failed to
>>explain" how they reached financial loss statistics used in
>>lobbying activities and court cases.
>>
>>Figures for 2005 from the global Business Software Association
>>showing $361 million a year of lost sales in Australia are
>>"unverified and epistemologically unreliable", the report says.

I totally agree.

The reality is, and many a survey has been conducted, that a person who 
"uses" a piece of pirated software, often (not always) only uses it because 
it's available to use.  If they had to buy the software, they absolutely 
would not, choosing to use "free" software supplied with machines and 
operating systems or shareware.

The same applies to music.  Sales don't increase just because someone has 
access to a piece of music.

One might loosely say that because a member of staff in a shop listens to 
the same music over and over every hour 8 times a day, the Music industry 
has lost 8 sales of that CD because the sales staff didn't buy it.

Lets face it an APRA licence to play music in a shop isn't equal to the 
value of 8-10 CD's a day, 365 a year!  (8 plays x 365 days x $25 = $73,000 
in lost sales apparently)

Now multiple that by the number of people who are employed in the shop, and 
customers that walk through the shop and you have a "massive" loss of sales.

The same applies to music played in clubs.  300 patrons staff and a DJ ... 
the cost of lost sales over a "paltry" licence fee is dramatic.

Movie sales are the same.  People might get access to a copied movie, but 
would they buy it for $29.95 if it was the only way to access it?  Probably 
not.  I buy DVD's when they call in below $15, and generally only 2 Disk sets.

A Movie ticket is $15, if my wife and I go to see a movie that's $30, plus 
other costs.  $15 to buy a DVD that I can watch over and over is cheap.

Would I pirate a movie?  No, not worth the effort.  I don't want "random" 
disks on a spindle laying around that I'll never look at.  Since getting a 
DVD recorder we started "recording" our favorite TV shows and some 
movies.  Went to the trouble of them copying the RW disks to R disks and 
printing a nice label on them.  Have we watched them since?  No.  Have I 
bought some of the movies on DVD since - yes.

Software is the same.  The only place I can legitimately see lost sales for 
software taking place is in a business environment where EVERY workstation 
is required to have the same software on it.  In such case a licence should 
be purchased per user.

In the personal home consumer world, people buy what they want that feels 
comfortable to them.  Microsoft does itself a disservice by selling Office 
for such a huge price.

I bought my copies as a Sales Agent in the mid 1990s.  I continue to use 
Office 97, even on XP.  If Microsoft causes my Office not to run on a 
future Windows platform, I'll without even batting an eye switch to Open 
Office.  I'll probably just toss the entire Windows concept and move to 
Linux totally.  So I won't be able to run photoshop under windows, but then 
I can always get a version for the Mac which does graphics so much better.

>>BSAA chairman Jim Macnamara said the figure was an extrapolation,
>>but other studies had supported it.
>>
>>"They're entitled to say they're not convinced, but not necessarily
>>entitled to say it's unverified," he said.

You can't determine lost sales by guessing the number of pirated copies and 
saying they are all stolen sales.

That's like saying that a Car yard has 1 car stolen, that 8 people drive 
over the next week.  Does that mean 8 sales were lost?

>>Painting a picture of an industry seething with competitive
>>jealousies, the report describes how "well-connected Canberra-based
>>lobbyists" fight for government attention and police time on piracy.

Gawd and the AFP still have burned DVD's running around for sale in their 
office.  I'm guessing software is also "shared" around.

>>"Of greatest concern is the potentially unqualified use of these
>>statistics in courts of law," the draft reads.

That's simple.  An unqualified statistic is just that, meaningless.  Got 
plenty of case law to toss up to show that unsupported unqualified 
statistics aren't evidence.

>>Copyright owners have lobbied for several years to have a study
>>done, hoping their figures will result in more law enforcement
>>action on piracy.

It won't change anything.  Consumers will choose to boycott particular 
brands over time and sales won't change or may drop.

If people become too fearful of something in which they have choice and 
options, then people choose the lesser of two evils to be sure they are safe.

Eventually Software companies will include in licences a clause that says 
software can only be used for 12 months after purchase, upon which time the 
licence expires and the software is pirated.

[Prediction Mode off]

>>It says the manager of the recording industry's anti-piracy arm,
>>Music Industry Piracy Investigations, did not know how piracy
>>estimates were calculated, as that work was done by the
>>International Federation of Phonographic Industries in London.

I read that as Pornographic!  (rofl)

And some mob in London knows the behaviors and attitudes towards music and 
purchases in Australia?  Hmmm.

If they are that damn good, then why is there piracy at all!  Someone able 
to predict and understand a market and it's motivations, can change that!

>>Copyright owners often use street-value estimates to calculate
>>losses, but this assumes that every person who bought pirated goods
>>would otherwise have paid for a legitimate item, the report notes.

My point!  My goodness there are some people who think out there!  Must be 
a non government consultant!

>>MIPI manager Sabiene Heindl defended the figures, which she said
>>were based on local survey, research and seizure statistics, but
>>compiled in Britain.

Seizure?  You mean Chinese importers with loads of CD's they try and sell 
at markets for $5?

That does NOT equate to "consumer sales" of the product, that merely 
equates to "I got it for nix, but if I had to pay twice as much I'd not 
waste my money and buy a beer instead."


>>"The reason I wasn't personally aware of how they are prepared is
>>because they are compiled by the IFPI," she said.
>>
>>"They have a group that has been doing this for some time."

Yes well groups with pecuniary interests tend to reflect the statistics to 
benefit their position.

>>Ms Heindl said the report was not intended to be made public.
>>
>>"We haven't had an opportunity to see the report," she said.
>>
>>"My understanding is it wasn't to be a public document and that any
>>submissions were to be considered confidential."

Haven't they heard of FOI!  Last time I checked unless it's a Ministerial 
document, it's fair game to the public!

Good on ya The Australian!

>>Many copyright holders claimed links between piracy and organised
>>crime, but AIC researcher had found nothing to support that view.

Except in China :)  Where there is, apparently, no copyright law.

>>"Either there is no evidence of any links between piracy and
>>organised crime or it is simply beyond the capacity of rights
>>holders to identify these links," he wrote, adding that he was
>>concerned about the way piracy figures were being used.

Yes well, I'm sure the local CEO of Microsoft is working his way up the 
Triad ladder in China Town or Cabramatta!

>>"It is inappropriate for courts and policy makers to accept at face
>>value currently unsubstantiated statistics.

Yes but courts do it all the time.  They accept whatever sounds good and 
whoever has the most expensive representation.

>>"Either these statistics must be withdrawn or the purveyors of
>>these statistics must supply valid and transparent substantiation."

I agree!

>>Some industry groups were reluctant to work with researchers,
>>because of concern about data leaking to competitors.
>>
>>Much of that has to do with a fight over access to resources.
>>
>>"There is a perception among some rights holders that they are in
>>competition with each other over limited federal government
>>resources," the report says.

I'll bet they add into their "piracy losses" the number of people using 
open source software too!  After all, that's lost sales isn't it?

>>"They fear that if they reveal the nature of their relationships
>>with government, such as the placement of well-connected Canberra
>>lobbyists, they will jepordise their advantage."

Isn't a lobbyist rather a public position anyway?

Or are they trying to say they have people who sneak into government 
offices and have private talks to manipulate and influence government?

Now there is a story to blow the lid on!