Report: Software piracy costs $34 billion

TalkBack 12 of 71:

Next »

« Previous

• Thread View
• Flat View

How was cost determined?

I wonder how the costs were determined.

SW Piracy, unlike theft of material goods, lacks the transfer of property. What is lost is the potential sale. There seems to be different ways to value a *potential* sale, but there are at least 2 factors.
First is the per unit cost (PUC), the other is the number of units "lost".

For PUC in order of decreasing cost (or so):

Full MSRP
AVG Selling price
Wholesale cost (avg?)
Marginal cost (probably not applicable)
None (i.e. nothing was lost but "potential")

The answer to what should be taken is partially dependent on "who" has lost money. (But see the end* for some commentary.)

For number of units lost:
The number of pirated copies represents the potential sales was lost, or the maximum cap on what could have been lost through this mechanism.

But not everyone who would get it for free (or especially cheap) would actually purchase the SW at the full retail cost. It would be more accurate to determine actual lost sales - if the pirated SW were unavailable, what percent would purchase the actual license.

In the numbers provided, are estimates of actual sales lost considered? Or is that percentage assumed to be 100%?


*The article mentions "a loss of $34 billion worldwide", and "the U.S. also lost the most amount of money, $6.9 billion", which probably doesn't state who lost the money - one could make an argument that the world, or a specific country lost nothing, it was only transfered, one entity lost value, another gained.

I suspect that BSA, who is concerned with the interests of its members (primarily commercial softare companies), and who commissioned this study, has presented the data in the way showing the most value, and not the most accurate way. However, this article has fallen short of showing that information about the study.

Posted by: Dan__   Posted on: 05/23/06 You are currently: a Guest | Members login | Terms of Use

Alert moderator to an offensive message

Subscribe to this discussion via Email or RSS

SponsoredWhite Papers, Webcasts, and Downloads

• Active Administrator Version 5.1 ScriptLogic Active Administrator? is an enterprise-class Active Directory management ... Download Now
• Breaking DB2 Platform Barriers Quest Software Are you supporting DB2 on multiple platforms? In this Quest white paper ... Download Now
• File System Auditor Version 2.0.8 ScriptLogic File System Auditor? allows administrators to audit file access, generate ... Download Now