Software piracy losses rise in 2004:
According to the Business Software Alliance, manufacturers lost close to US$33 billion due to software piracy last year, a rise of US$4 billion in 2003. The biggest problem region for the BSA continues to be Asia, with piracy rates exceeding 90 percent in both Vietnam (92 percent) and China (90 percent) and 87 percent in Indonesia. Ukraine and Zimbabwe were the biggest non-Asian offenders, with rates of 91 and 90 percent, respectively.
Today Arstechnica posted a follow-up article regarding the skewed methodology used by the BSA to determine the rate of piracy and the total costs associated with it. Apparently this is how they calculated the rate:
To derive its piracy rate, IDC estimates the average amount of software that is installed on a PC per country, using data from surveys, interviews and other studies. That figure is then reduced by the known quantity of software sold per country-a calculation in which IDC specialises. The result: a (supposed) amount of piracy per country. Multiplying that figure by the revenue from legitimate sales thus yields the retail value of the unpaid-for software. This, IDC and BSA claim, equals the amount of lost revenue.
In many ways, this is similar to how the RIAA and MPAA guesstimate the revenue lost to “piracy.” All other IP issues aside, these organizations essentially inflate lost revenue numbers based upon fuzzy math — phantom revenues that should be taken with a grain of salt.
