BSA says piracy cost $50 billion, awaits its IP czar

BSA says piracy cost $50 billion, awaits its IP czar

Summary: Supposedly, the software industry lost $50 billion to international "piracy" last year, $9 billion in the U.S.


Supposedly, the software industry lost $50 billion to international "piracy" last year, $9 billion in the U.S. That's according to the Business Software Alliance's latest study.

And although piracy in the U.S. is the lowest in the world, BSA bemoans: "A fifth of PC software in the U.S. is pirated, posing challenges to cyber security." Don't forget to bring out security!

Sayeth BSA:

Software piracy also increases the risk of cyber crime and security problems. For example, the recent global spread of the Conficker virus has been attributed in part to the lack of automatic security updates for unlicensed software. And in a 2006 study, IDC found that 29 percent of Web sites and 61 percent of peer-to-peer sites offering pirated software tried to infect test computers with “Trojans,” spyware, keyloggers, and other tools of identity theft.

Eventually, this will all be solved when President Obama appoints the IP czar, BSA prez Robert Holleyman told the Wall Street Journal.

"That recognizes, as leaders on [Capitol] Hill did, that intellectual property really matters to the U.S. economy," Holleyman said. "Getting that person on board is critical."

Ars Technica points out that these numbers assume that every pirated copy would be replaced by a full-value copy if only piracy were stamped out. Even the BSA admits this, but they don't agree that the replacement value would be more like 20%, not 90%.

"I concede that, in this model, we express the value of pirated software in terms of retail value of what's being displaced. We assume 100 percent of the software would be replaced and we calculate the retail value of that," BSA VP of communications Dale Curtis told Ars over the phone. "I don't know how much will be replaced or not. A lot of it will be replaced."

Topics: Piracy, CXO, Enterprise Software, Security, Software, IT Employment

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  • There is no such thing as piracy...

    Piracy is what happens to ships on the high seas.

    Un-licensed software is NOT piracy! Useing the word "piracy" to denote un-licensed software is just a form of propaganda.

    With product activation, Draconian DRM and EULAs that are a joke I have no sympathy for software producers.

    I am tired of hearing about a "problem" that does not exist. Go cry to someone else.
    • Better products

      Un licensed software a better in every point to a "original". No/Disabled DRM, no activation.

      If Obanana want to fight unlicended software, it must start by declaring ALL form of DRM ILLEGAL.
  • RE: BSA says piracy cost $50 billion, awaits its IP czar

    ?I don?t know how much will be replaced or not. A lot of it will be replaced.?

    So how the *%&# do they come up with $50B? Is this guy a total fraud? (stupid question). This is precisely why the BSA/RIAA/MPAA have absolutely NO credibility. Trouble is, they bribe the politicians and feed them these bogus numbers.

    If they lost $50B, then someone else saved $50B, which they instead spent on something else, hence there is no loss to the economy, but the fraudsters are out the $50B while other more honorable businesses made those %50B. Sounds fair to me.

    I agree that creators of valuable intellectual property deserve to make a (good) living. I also feel that charging on a per use basis for knowledge/ information and culture is detrimental to society as a whole. Since we still (supposedly) live in a democracy, we just have to change the rules a bit to allow the creators to be paid while the consumers get access to all kinds of digital information/content.

    One important reason for the phenomenal advances in science in the past 100 years or so is that scientists tend to share their discoveries with other scientists. This has made all of society better off. Is it not time to consider the same for digital content and information?

    • Lets elaborate:

      So let's look at this another way:

      As indicated above, the $50B lost by BSA is saved by the "pirates" and spent at other businesses. These businesses have to hire to absorb the $50B. Conclusion: No loss to the economy.

      The "pirates", many of whom could not afford to buy computers if they had to pay for the software, make the HW side of the industry grow. Conclusion: This creates jobs and helps the economy.

      Businesses which "pirate" SW have lowered their cost of production and can therefore lower their prices to consumers and/or invest/expand and hire more workers. Conclusion: Economy grows.

      Overall conclusion: "Pirating" SW is good for the economy. QED

      This is not as crazy as it may appear. Lets say all proprietary SW disappeared and only open source SW existed. Then I got a worldwide license to distribute/sell ALL the world's open source SW for $100 per copy. I would create a large distribution and retail network and hire lots of people. If you did not pay me, but instead just made a copy of MY!!!!!! software, the economy would suffer. Really? No, I would simply act as a non-productive parasite or tax and I would hurt the economy. Revoking my license, even if I had to lay off ALL my workers, would be good for the economy. Unless I happened to be the BSA/RIAA/MPAA..... Then if would be REALLY BAD for the economy.
  • The BSA is the Cyber Mafia

    This is from the same BSA that uses strongarm and extortionist tactics to force businesses to pay ridiculous fees. This organization is little more than organized crime who would make the Mafia look like a bunch of patsies.
    • Open Source!

    • Weapon of choice...

      In this instance, the weapon of choice is a lawyer instead of a tommy-gun.
  • Still waiting to see... the BSA calculates losses. Maybe the method is a confidential trade secret.
    John L. Ries
    • They look at every unauthorized sale

      Everytime someone buys an unauthorized copy, that's a sale that a software publisher didn't get. BSA says if we had no piracy that person would have paid retail for that copy.

      Thus everyone who buys a "pirated" copy for is assumed to be a willing customer for the product at any price. They are buying the pirated version becasue it's cheaper. This of course discounts the fact that the sale ONLY happened because it was dirt cheap. It discounts the fact that people frequently decide NOT TO BUY something if it costs more than its value.

      Given the trivial feature differential between proprietary and free software, I'd say that's a calculation people make all the time.
      • That's what I thought

        It's as much of a lie as it was 15 years ago, but propagandists and rhetoricians rarely have any interest in truth.
        John L. Ries
      • I have had many trial versions

        on my home computer of some of this expensive software - and I have yet to find anything I'd pay the retail price for. I use cheaper alternatives, and only have Microsoft office because I found 2007 on Amazon for about $88 on sale. The University where I work is considering major software changes - most of which is migrating away from some of this over priced junk.
        library assistant
      • They do tend to stretch credulity a bit

        Like everyone that didn't pay $1800 for Adobe's suite is going to bust open their piggy bank and run down to the local retailer.

        Everyone that didn't pay $800 for Office is going to tap into the kid's college fund to buy enough licenses for themselves, and all the kids.

        And we claim there's a reality distortion field around Apple. Hah!
        Dr. John
  • RE: BSA says piracy cost $50 billion, awaits its IP czar

    What if the czar is an advocate of free and open source? People are tired of paying for bad software with big price tags. What other retail item can you think of that if you are not satisfied with it you can't take it back. Soft ware makers made the rules and now don't like the way the game is played. A clear case of not being in tune with your customers.
    • Not gonna happen

      They'll only choose someone who will support their story & business model, buy into their misinformation, and treat us all as a common thief. Correction, treat us all as we were multi-billion dollar bandits.

      What they should do is sell whatever software/formula/mechanism that calculates such losses so accurately, and then they wouldn't cry because they can't afford the latest Rolls Royce with all the options.

  • RE: BSA says piracy cost $50 billion, awaits its IP czar

    It annoys me immensly when software producers (and the music/film industry) claim they have 'lost' x dollars because of people 'ripping them off'. Well, let's get this straight - you have LOST nothing.

    You cannot LOSE what you never had - and people who DO use copied software, music, films, were never going to buy it in the first place. So you have LOST absolutely nothing and gained, perhaps, some free advertising as they use/play/watch in front of other people.

    On that basis of course, perhaps we should be being paid for using what can be, let's face it, flawed goods needing updates every week to ensure it does what it says. After all, we ARE beta testing stuff.

    I can only say thank providence that IE is free - I can uninstall it and use a browser that works instead :)
    • ***Claps****

      I agree.
      library assistant
  • Cyber Mafia or Cuber Henny-Pennies

    The figures of 50 Billion have an accuracy of plus or minus 99%. They can't know how much it is unless they know who, what, where, and when, and they don't. The numbers are plucked out of their rectum and the temptation to justify their existance by tremendously exxagerating the numbers is enormous. I'd say 5 billion would probably be more realistic -- 10 percent of whatever they guesstimate.
  • Anal Ventriloquism

    Talking out their posterior without moving their lips.
    • RE: ANAL Ventriloquism...


      I would not want to get too close to one of these ventriloquists; lest I become completely covered in the usual output of the anus!

      Actually, I believe that they suffer from a cranial rectal inversion; with the resulting 's--- for brains syndrome'. But that again, is another story.
  • Go after the real pirates

    Go after the people in (insert foreign country here) that are getting hold of software as soon as it's released (or even before), and are selling it overseas. With RIAA, they left the real pirates alone and went after kids. What do they do, just go after the people they can easily catch? They are going to go after dumb Joe Schmuck who makes a copy of Bejeweled for his kid's friend.

    Another thing - if software "giants" would start pricing their software so most people can afford it, they wouldn't want to get the illegal copy of it. Just how many people are going to buy a $2500.00 suite to manipulate pictures and do other things? Even to just do the pictures it's about $1,000. And they wonder why people pirate. Who can afford that kind of money?
    library assistant