b.cognosco

Where leaping to conclusions is my primary form of forward motion.

Most Popular

Book Reviews

Recently

Saturday, May 21, 2005

Business Software Alliance - The Poor Can Pay Like Everyone Else

Via Ars Technica comes this link to a Business Software Alliance press release proclaiming 2004 software piracy losses in excess of $30 billion.

STOP THE INSANITY!!

The Ars Technica article, thankfully, notes the silliness of  BSA’s 1–to-1 ratio of pirate copies to lost sales:

  However, some of the BSA's claims deserve closer scrutiny. Does US$33 billion in pirated software automatically equate to US$33 billion in lost sales? Actually, it's not even close. Despite the BSA's arguments, each sale of a pirated title does not correspond to a lost sale of a legitimate copy.

They also note that the top piracy offenders - Asia, Africa, Eastern Europe - also have the lowest per-capita GDP and pull a great quote from BSA Regional Director Jeffrey Hardee via an AP story:

If you can afford the hardware, you can afford the software.

This attitude, and the absurd insistence that every pirate copy is a sale forgone, serve to completely undermine the honesty, believability, and effectiveness of Hardee’s position and show him in a harsh light. Let's examine Hardee's World for a moment and see just how this adds up. According the BSA press release:

 

• Although piracy rates decreased in 37 countries, they increased in 34 countries. They remained consistent in 16 countries.
• In more than half the 87 countries studied, the piracy rate exceeded 60 percent. In 24 countries, the piracy rate exceeded 75 percent.
• The countries with the highest piracy rates were Vietnam (92 percent), Ukraine (91 percent), China (90 percent), Zimbabwe (90 percent) and Indonesia (87 percent).
• The countries with the lowest piracy rates were the United States (21 percent), New Zealand (23 percent), Austria (25 percent), Sweden (26 percent), and United Kingdom (27 percent).
• The emerging markets in Asia Pacific, Latin America, Eastern Europe and the Middle East and Africa account for over one-third of PC shipments today, but only a tenth of spending on PC software.

Using data from the CIA World Factbook, piracy leader Vietnam ranks 161 in per-capita GDP, with an average annual income equivalent to $2,700 USD and 29% of the population under the poverty level. Runner-up Ukraine ranks 115 at $6,300 USD. Third-place finisher China comes in at 121, with per-capita equivalent of $5,600 USD.

What a stunning development – these people have shown absolutely no interest in spending 5%-10% of an entire year’s wage for a bloated, crashing, overrated piece of software like WindowsXP. That’s like asking the average US Citizen to pay $4,000 – yes, $4,000 – for a copy of Windows. Hello?! Am I the only one that sees how absurd this is? Based on statistics published at ITFacts.biz, the Chinese are buying PCs at the rate of 10–12 million per year. But when you can buy a PC in China for well under $200USD and the OS costs almost 2x that what do you expect?

To their credit, BSA does note that total financial losses from the top pirates are substantially less than losses in the major software markets of North America and Europe. Even though the number of pirated copies as a percentage of total copies in circulation is much smaller in these markets, the overall market size is substantially larger. And, assuming that every pirate copy has cost them a sale is a convenient way to generate some big, scary, “We have to do something NOW!” numbers.

There is certainly a problem with Asian PC makers who bundle bootleg copies of software in order to sell PCs (many do) and therefore profit unfairly from the work of US companies. But there is simply no legitimate economic basis for any of the current “loss estimates.” So long as the RIAA/MPAA/BSA continue to ignore basic economic principles and engage in blatant fabrication to suit their PR and political goals it will be a tough battle to get any popular support for their cause. I do not believe businesses – Chinese or otherwise – should profit from pirated software, but organizations that blatantly lie to achieve their goals are just as bad..

If the piracy cops want honesty from software users maybe they should start with a little honesty in their business practices. I don’t appreciate being treated like an idiot – fed ridiculous numbers as if I don’t have sense enough to do basic math. Until these organizations start to put some legitimate piracy/sales ratios in place we have no reason to trust them, pity them, or help them.

Posted by:  Terry Frazier at 9:06 PM  | Permanent Link  | Trackback URL | 
Categories: Business & Finance, Copyright, Technology

Sunday, May 15, 2005

Another 'Broadcasting is Dead' Story

This article, Piracy is Good, over at Australian site Mindjack, is a good description of the effect technology is having on broadcast television. Author Mark Pesce discusses, in some detail, the use of p2p filesharing technology BitTorrent and, more importantly, proposes some interesting business models for how producers and advertisers can collaborate to create a viable business.

Mark uses a couple of good case studies, including recent download scenarios for Dr. Who and Battlestar Galactica, to make the case that downloading does not necessarily equate to lower viewership. He also offers good analysis of the economic situation broadcasters face – after 50 years of training viewers that TV is free, trying to suddenly convince them they should be paying for everything isn’t going to work.

This, of course, is not news to anyone who regularly reads weblogs, RSS feeds, or uploads pictures to Flickr. But Pesce’s is one of the first articles I’ve seen to dig into the figures around p2p distribution, broadcast viewership, and the relative impact for popular TV episodes.

I’m not ready to concede broadcast is dead – even the latest bittorrent clients are too geeky for mass use – but Pesce’s case for advertisers is compelling. And if one thing is certain, it’s that advertisers follow the market. A commericalized, ad-supported p2p distribution network with viewer tracking can’t be far away.

Posted by:  Terry Frazier at 1:14 AM  | Permanent Link  | Trackback URL | 
Categories: Business & Finance, Copyright, Strategy, Technology

Saturday, May 14, 2005

New b.cognosco Wiki

Posted by:  Terry Frazier at 5:41 PM  | Permanent Link  | Trackback URL | 
Categories: Collaboration, Technology

Frank Zappa Was THE Man

As Zappa would have said — “Poot”

But that Would Have Killed the Music Industry, Right?

Quoted

“We propose to acquire the rights to digitally duplicate and store THE BEST of every record company's difficult-to-move Quality Catalog Items [Q.C.I.], store them in a central processing location, and have them accessible by phone or cable TV, directly patchable into the user's home taping appliances, with the option of direct digital-to-digital transfer to F-1…

All accounting for royalty payments, billing to the customer, etc. would be automatic, built into the initial software for the system.

The consumer has the option of subscribing to one or more Interest Categories, charged at a monthly rate, without regard for the quantity of music he or she decides to tape.”

-- Frank Zappa invents Rhapsody, Napster in 1983 [Good Morning Silicon Valley, via Shawn] via Jenny Levine

Posted by:  Terry Frazier at 1:24 PM  | Permanent Link  | Trackback URL | 
Categories: Copyright, Music, Technology

Syndication

Contact

 

Presence

 

 
 ICQ

 

 

 

www.flickr.com More of GratefulZed's photos

This Page was last updated: Wed, 02 Jul 2008 22:06:57 GMT