b.cognosco
Where leaping to conclusions is my primary form of forward motion.
Most Popular
- Historical Yearly Average Gasoline Prices
- Outlook 2003 Message-ID Insanity
- Real-time Sand Animations
- Adobe Acrobat 7
- Adobe Announces Name Change and New Product
- Largest Technology Boondoggle in Public Education History
- Yahoo! Buys del.icio.us
- Skype - Disruptive, Not Compelling
- Aluminum Christmas Tree Museum
- Network Printing Hell and windoze XP
Book Reviews
Recently
Saturday, September 10, 2005
$107 Billion and Counting
According to the 2005 Dept. of Homeland Security Budget in Brief, the total expenditures for 2003-2005 exceed $107 billion. Let me repeat that:$107 billion
This does not include the special appropriations made for Katrina. It is just the operating funds for the largest bureaucracy in American history. If we were to demand that the governemnt calculate a Return on Investment (ROI), which is how most businesses determine if something is worth doing, I suspect we would be able to identify precisely one piece of tangible evidence for this massive expenditure - the Disney-like Homeland Security Advisory System.
But we do see enormous burdens on travelers, citizens, airlines, and airports, as well as enormous profit opportunities for bureaucrats, technology companies, and people with hare-brained ideas to sell to the government.
It is amazing what we have come to accept from our elected representatives.
Terry Frazier at 7:48 PM
| Permanent Link
| Trackback URL | Categories: Policy & Regulation, Security
Friday, September 9, 2005
The Threat Level Is Severe
After four years, 3.7 million man/hours spent "thinking about bungling every day", and $62 billion dollars the Citizens Panel on Government Prevention has released its long-awaited Government Bungling Alert System. The current threat level is Severe.
Terry Frazier at 10:46 PM
| Permanent Link
| Trackback URL | Categories: Humor, Policy & Regulation
Tuesday, May 17, 2005
IP Theft and the Trade Deficit
The Glittering Eye has collected some useful information on Chinese piracy and the scope of its impact on our economy. There’s a good collection of reference articles and press releases – “US May Bring WTO Case”, “Hollywood Loses $900 Million to Pirates”, and Forbes - and the author does a good job outlining the available options for correcting the problem.
Or part of the problem. As with almost every single story on piracy, the articles listed above use wholly inappropriate, even ludicrous, numbers for the value of piracy. Whether the numbers come from former US Trade Rep Bob “Patent ‘til you drop” Zoellick or the self-serving lawyers over at MPAA/RIAA, they all share one common trait — they take a universal 1–to-1 ratio between pirate copies and lost sales. This act of starting from a false premise and proceeding logically leads to absurd conclusions like this – “ U.S. music, movie and software industry groups estimate they lose between $2.5 billion to $3.8 billion annually in China through sales of illegal copies of their products.”
$3.8 billion my lilly-white ass!! Have you ever been to China – where they still hand-carry their raw sewage in buckets? Have you seen Chinese peasants riding 20–year-old bicycles down modern, but empty, thoroughfares? Sure, there is lots of economic growth in China (I do some business there), but growth from a zero base has to go a long, long way before spending a month’s pay for a movie looks like a good idea. If you think for a minute that the typical Chinese wage supports paying $15 USD for a CD, $20 USD for a DVD, or $299 USD for a copy of Windows XP then I have some great business investments I’d like to show you.
If the vast majority of Chinese didn’t have pirated copies they wouldn’t have any. They don’t just hop in a Beemer, run down to Chairman MaoMart and buy one. No, they wouldn’t have a copy. None. Zero. Zilch. Nada. And that’s the real economic impact of the vast majority of pirated copies – zero.
I don’t know if the actual ratio is one lost sale for 100 copies or 1,000, but the bottom line is that, while there is clearly an economic impact to the theft of American soft products in China, it is nowhere near the dollar value the industries and flag-waving bureaucrats like to pretend. The premise that a pirate copy in Asia has a direct corollary to a lost sale (the music industry in Germany went so far as to assume a 1–to-1 ratio between the number of blank CDs sold and lost sales) is as realistic as assuming that every television viewer of a sports broadcast is a lost ticket sale (Oh, wait – the NFL makes exactly that assumption.) And the companies complaining the loudest *know* that. Why else would they be falling all over themselves to get their products into Chinese markets? If all those markets meant were losses you can be sure they would be running in the other direction.
Instead, US companies are dying to get into the Chinese market. And that – along with the knowledge that piracy is nowhere near the economic threat they like to proclaim – is why the US won’t do anything significant about China’s piracy problem.
BTW, the next time anyone starts talking about losses to piracy, China or otherwise, ask them a simple question – “What’s your estimated ratio of pirated copies to lost sales?” If they give you an answer that is anywhere close to 1–to-1 just laugh and walk away, because they’ve obviously taken you for an idiot. (Via EEJD)
Terry Frazier at 8:56 PM
| Permanent Link
| Trackback URL | Categories: Business & Finance, Copyright, Music, Policy & Regulation
Syndication
Contact
Presence
This Page was last updated: Wed, 02 Jul 2008 22:06:57 GMT
