Wednesday, December 14, 2005

Ok. I just want to make a point. Supposedly, according to a "software trade group," a "ten-point drop in the estimated 35 percent global software piracy rate would create 2.4 million jobs and $400 billion in economic growth over four years."

Perhaps I have a stake in the negative opinion here, but I want us to truly consider this statement. First, who is the "software trade group"? Second, what does "estimated 35 percent global software piracy rate" mean? Stick with me on this one. What is the 35% of? Is it 35% of total software trade worldwide? Is it 35% market-share of software, by which I mean 35% of the total possible revenue?

I don't know. And the article blithely does not say. How very irritating, and how convenient, as leaving out that important note makes it a lot easier to drop other relevant questions, like what factors lead to this conclusion?

My guess is that this study is based upon a 1:1 switch. In other words, for every piece of pirated software, the cost of an equal piece of legal software is added. If so, it would make sense that the number might be so high. Dropping either 10% or 33% (depending on what the hell they are talking about) of the total piracy worldwide would certain generate a ton of revenue, if every single person that used pirated software started using legal software.

But that simply isn't likely to be the case. My guess is that at least 50% of the people who use pirated software (probably more) would never go out and buy the legal versions. To use a popular and famous example:

Photoshop costs about $200 dollars and is one of the most pirated pieces of software in the world. Or was at one time. Now let's do a little math problem. Suppose there are 10 people who use pirated Photoshop. That's $2000 in lost revenue. Now let us see what happens when 30% of those people stop using photoshop. Only $1400 in lost revenue! But what if, instead of saying only $1400 in lost revenue, we said $600 in GAINED revenue!!!

This, I think, is what this trade consortium is doing. Unfortunately, that idea is ridiculous. Who were these three people? Probably poor people who had access. How many of these three people are likely to go out and buy a $200 program for editing pictures? I'm guessing about zero.

Of course, all of these theories could be baseless if only the article:

http://news.yahoo.com/s/pcworld/20051214/tc_pcworld/123918

:had been willing to actually discuss the report itself, rather than the possible rammifications of the report, and then demonstrated that estimates were based upon real and reasonable numbers. However this was not the case, so I'm going to go ahead and continue calling bull.

|