Neowin.net - Is Software Piracy Stealing Jobs?

Is Software Piracy Stealing Jobs?

Posted by Keldyn on 03 April 2003 - 04:43 · 96 comments & 7378 views

Reducing software piracy by just 10 percentage points worldwide would generate 1.5 million jobs and add $400 billion to the world economy, according to a study released Wednesday by the Business Software Alliance and IDC.

The BSA, composed of giant software vendors such as Microsoft, IBM, and Apple Computer, pegs the percentage of software programs pirated globally at 40 percent. The IDC study, commissioned by the BSA, concludes that reducing that rate to 30 percent would enable nations to add a total of $64 billion to their tax coffers.

In the study, IDC assessed the impact of information technology on 57 countries that account for 98 percent of the world's IT market. According to the BSA, about two-thirds of those 57 countries have reduced piracy by 10 percentage points since 1996; the BSA sees a drop of another 10 percentage points as a "realistic and achievable goal." A drop of 1 percentage point would raise $6 billion in new tax revenues, according to the study.

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News source: PCworld

Whether Nvidia and Microsoft work together again will depend on the terms, says Brian Alger of Pacific Growth Equities. "Microsoft doesn't want to pay that much [for the chips]. One has to assume [it] will be more careful."

Indeed, the company is not without options. Microsoft could structure a deal similar to the one Nintendo has with its graphics chip developer, ATI Technologies. Nintendo does not buy its chips from ATI. Rather, ATI developed the chip, for which Nintendo owns the rights and is responsible for manufacturing. ATI is then paid a royalty on every GameCube and every software title.

Xbox-related revenue accounts for about 10% of Nvidia's sales, which totaled $2 billion in fiscal 2003, ended in January. Company spokesman Derek Perez says Nvidia does not have an agreement to produce chips for Xbox 2 (one could conceivably be forthcoming), but that "Microsoft is still a great partner and this is still a good business."

Nvidia did not update first-quarter guidance at its meeting, but analysts nonetheless came away bullish. Morgan Stanley says Nvidia "articulated a well-thought-out corporate strategy covering product roadmap, marketing and manufacturing. This confirms our view that Nvidia is positioned once again to enjoy a reacceleration of revenue growth, margin expansion and a significant increase in earnings power."

Pacific Growth Equities says the company "should be able to do better than consensus EPS of 10 cents and should have little trouble meeting our 12-cent estimate."

Alger says that one of the reasons Nvidia did not update its guidance is because Xbox sales will be slow until this May, when a widely anticipated price cut on all videogame consoles takes place.

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#1 Posted by warr on 03 Apr 2003 - 04:56: it is creating jobs. it only makes the rich men earn less, it won't cause them to lose jobs, well, IMO only. they earnt enough. everything has a cycle, has its counter force. and to these hollywood richies, now this force comes to u.

#2 Posted by teka on 03 Apr 2003 - 04:56: haha... come on!

(6 replies) #3 Posted by DsnBehind on 03 Apr 2003 - 05:18: Don't charge $50, $100, or [B]$300[/B] for software, then I'll buy it...

#4 Posted by georgi55 on 03 Apr 2003 - 05:19: LOL, dumbasses. Don't they get 90% of piracy is stuff that the person who pirated would have never bought at 1st place anway. Damn, how small brain does it take to be emplyed in BSA>

#5 Posted by Marshalus on 03 Apr 2003 - 05:20: Gee, this survey isn't bias, considering Microsoft and others biggies own the BSA.

(10 replies) #6 Posted by BigBoy on 03 Apr 2003 - 05:32: Well - if you are pirating software, you can tell yourself whatever you want - how "they are charging too much" or "it is Microsoft after all" etc. The bottom line is - you are still pirating software. And if you think that pirating does not have impact on number of jobs - you might need a reality check.

(2 replies) #7 Posted by WillGonz on 03 Apr 2003 - 05:59: Piracy helps Software companies in the long run: I fix machines when they crash. I need to know how to interact with as much software as I can. It would cost me hundreds of thousands to buy it all. So I don't. But if someone asks me, "What paint program should I buy?". I say something like Photoshop. If Photoshop was copy protected and there was no way I could ever test it. Then I would say, "Just use MSPaint." Or some freeware paint program. Second of all, if it cost $700 and I couldn't afford it I wouldn't be spending the money anyway. If you pirate to sell what you copy, that is bad. But if you dabble in it to sell the product for the benefit of the software companies then I feel that is good. I have recommended over 6500 copies of Windows 3.11, Windows 95-XP Pro to people for free advice and they purchased. With those 6500 I recommended MS Office Suite for 5.0,95,97,2000,XP. About 50 Photoshop’s. About 100 copies of Nero. And about 2000 misc. apps. WinZip, NT Server, 2000 Server, Visual Studio Suite, etc. A lot. Companies get at least x10 out of me what I get out of them. Trial ware doesn't cut it. I need to use an application for 6 months before I can explain every cool feature. Oh yea, I tell them about it for free. I could be in a computer store and someone could be holding two programs in their hand, and I will give my honest opinion on the product, 9 out of 10 times they walk out with the product I recommend. At work I recommend it, and they buy it, there is no other option. Since 1990, I have made transpire over 100,000 application purchases, in individual and company markets; based on free advice given on a discussion of what to buy. WillGonz All Flames will be Extinguished CoolEdit Pro 2.0 is so sweet.

(21 replies) #8 Posted by Fonze on 03 Apr 2003 - 06:39: DOWN WITH PIRACY prices will drop when sales go up. jobs will go up when profits go up. Instant boost in economy and national job market. us pirateing from ourselves isn't the biggest problem, it's those out of the country that are destroying our economy

(1 reply) #9 Posted by jizness on 03 Apr 2003 - 07:06: How about asking the guys over at Winbeta or xBetas who blatently pirate software from Microsoft....

(1 reply) #10 Posted by Inertia on 03 Apr 2003 - 07:07: if 40% of software is pirated and that dropped to 30%, that would be reducing software piracy by 1/4 (25%) not by 10% I doubt its likley to happen.

#11 Posted by foonacha on 03 Apr 2003 - 07:41: They trot this scare story out every couple of years - especially when they want to have more powers granted to them by the government. Just another bunch of bureaucrats trying to justify their jobs...

#12 Posted by TC17 on 03 Apr 2003 - 08:58: The only thing that would happen is the rich would get richer. They would have zero reason to hire more people, what would be the point of hiring more people to write the same program? Also this is the same crap they always give, they are assuming the people who pirated the software would have purchased it otherwise. They are assuming companies have lost money that they never had in the first place. I could go and say that many more jobs would be created if certain software companies would stop overcharging their customers, then we could use the money saved, to spend on other products. Which in turn would create more jobs.

#13 Posted by CrimsonBlur on 03 Apr 2003 - 09:05: UHHHHHH.... last I checked, pirating software only CREATED jobs. For one thing, how in the hell does it COST jobs? I seriously don't understand that logic. These companies don't go out of business when people pirate their software... if their software is good enough to be pirated by a large number of people, their company is probably making HUGE profits off of the people that DO buy the programs. And the people that are savvy enough to pirate their software probably end up working for THEM or their affiliates anyway, and make them cash developing for them or designing their interfaces and Web sites. I would NEVER have become interested in digital design and programming if I had needed to buy ALL of the software I own, it all equals like $10,000. I'm dead serious on that one. And now I'm positive I'll be hired by a tech company to work for them an somehow inadvertantly make money for companies like Microsoft, Adobe, Macromedia and Sonic Foundry. So give me a damn break. I really doubt anyones standard of living will increase due to reduced software piracy. What a joke.

(6 replies) #14 Posted by mintll on 03 Apr 2003 - 11:16: I cant afford it so I download it instead

#15 Posted by Kaneda on 03 Apr 2003 - 11:34: you tighter-sphinctered individuals can say what you will.. the fact remains being of the racket of "going rates" and oligopolies/monopolies, the only real result of piracy is that rich pigs are forced to wipe their asses with 50 dollar bills instead of 100s. Microsoft was below expected first-quater earnings?! where's my violin? Ballmer has to buy a Saab for his wife instead of a Mercedes... i don't think i can take these kinds of travesties anymore...

Last edited by 3393 on 03 Apr 2003 - 11:46

#16 Posted by antareus on 03 Apr 2003 - 12:23: Ah yes, a little story appears with the word piracy and all of Neowin is quick to defend themselves. I love it. Hint: you don't have to substantiate your activities to anyone. It is *your* life.

(4 replies) #17 Posted by MZatko55 on 03 Apr 2003 - 13:10: In an ideal market where products aren't easily stolen and copied because they exist digitally such as cars, the demand (for these cars) causes suppliers to fill the need. If it was possible to download new cars and about 25% of all customers did this, it would essential decrease market demand for cars, making it effectively lower than it really is. Therefore, the car industry would slow down, costs and jobs would be cut by each manufacturer and a life and death fight between them would pursue. Eventually, a few companies that helped fill the full potential demand would fold and supply would meet the new lower demand. Same thing for the software industry people. Its very very basic economics I, people. Stop trying to justify it. If you are a reseller of software and need curtosy trials of software, register with the respective company. More demand for software in the industry (less piracy = greater demand) would essentially introduce new suppliers which means more competition which means lower prices and better products. Just remember MS could put dogshit in a box and call it Windows 2008 and it would sell because they have little competition... There is not enough demand for a direct competitor to enter the market... Of course none of this will change anyones outlook. Once a bonehead always a bonehead I say.

#18 Posted by Bubacar on 03 Apr 2003 - 13:43: Given the source of this information alone I would bet it's an inflated number

#19 Posted by okidoki on 03 Apr 2003 - 14:02: errrr.. I thought April 1st was two days ago?

#20 Posted by sudonim on 03 Apr 2003 - 14:15: I wouldnt pay for the software I have. If I had to pay, I would find a way to use linux and support the companies that create linux software. It is as simple as that.

#21 Posted by Rev. Otto on 03 Apr 2003 - 14:32: It is ignorant to believe that piracy does not have a direct impact on the software industry. Yes, we all wage a daily battle against the "con", and would like to run whatever software we please on our boxes. But over the years I've started purchasing things I feel are worthy of my support. I would take it that most of the people that are pro-piracy have never been a part of a business venture and watched the profits dwindle as your product is given away for free. If you don't like paying find or create an open source equivalent, but please don't lie to yourself and others by claiming you steal to "benefit" the industry.

(1 reply) #22 Posted by Eduardo on 03 Apr 2003 - 14:45: I'm sure that even MS dont want to stop piracy. Think this: If they want to stop piracy, they could invented some little (very little and chain-able) hardware that comes with the software and must be plugged in order to use the software. This could be invented 10 years ago, and piracy will be less than 10% (assuming someone invent a bootleg hardware ). But in this case, Office will not have 90% market share, because people will still be using wordperfect and quattro pro. People get a free copy for home and then, they force their bosses to buy that soft for work, because people already use it at home. eduardo

#23 Posted by SmartSsa on 03 Apr 2003 - 14:52: There's a few different spectrums to look at too, which most of these "surveys" don't take into account. Majority of software firms that cry about piracy lack the ability to put out a good product. Games - Good game = Good sales. Good games are just RARE - thus most people want to TRY the full version, not some wussy sooped up demo. Apps - Apps would sell MUCH better if the prices were more realistic. Unfortunately most companies assume every piece of software they put out is for an office and offices make money, so money should be paid out. [bling bling, yo.] However, most "pirates" are home users who simply can't dish out the hundreds that these companies want for their applications. And don't give me any supply and demand bullshit, because it's [obviously] not hard to make and distribute multiple thousands of copies of program. Another aspect in the Apps department is upgrades. Where in most cases you have to dish out a lot more money again and again even with a "discounted" price. grr!

#24 Posted by slippery on 03 Apr 2003 - 15:08: Another view of the topic might be presented as such: While it may be true that the 10 per cent in question may fill what was it? - 1.5 million jobs, the opposite can be said - It is also producing more jobs in the security and software developers areas, so as far as Im concerned it could be a total wash - - - -

#25 Posted by Mr magoo on 03 Apr 2003 - 15:13: stealing from [steve] jobs yeah !

#26 Posted by DieSoNNe on 03 Apr 2003 - 15:24: piracy is the onlything that keeps the RIAA alive=> copy more, you don't want them to lose their jobs hm

#27 Posted by Fubar on 03 Apr 2003 - 15:43: LOL this article is funny and the comments re even more funnier keep up the good work chaps made me smile

#28 Posted by Chugworth on 03 Apr 2003 - 15:56: These people who bash the BSA for being stupid, and then say that pirating software helps the economy, are ridiculous! They’re trying to justify the fact that they’re [b]stealing software[/b]!

#29 Posted by Duplicator on 03 Apr 2003 - 15:58: Anyone ever stop to think that if people who pirate software - like a lot of us do - to learn from it - were "stopped" from doing so - the open source community would soar? Then what? Hmmm... I'd tend to believe that M$ and like-minded companies would have an even SMALLER share of the market, and therefore LESS sales. Some of us can get their products for 'free' and still avoid it like the plague...

(4 replies) #30 Posted by Gup20 on 03 Apr 2003 - 15:58: so if $64 billion could be going into tax coffers... and the average sales tax is ~7%.... that means that what the BSA is trying to say is that the software companies could be ~ $1,000,000,000,000. 00 (trillion) richer if you bought your software from them. Long Live Software Piracy

(2 replies) #31 Posted by trashpickinman on 03 Apr 2003 - 16:57: I think piracy does steal jobs in a way. How do you think software gets on the shelves. First the software is coded, then a manufacturer creates the CDs, another manufacturer creates the boxes, then an assembly line puts the software in the box. The boxes then get loaded onto a truck, the truck is driven across the country. The software then gets unloaded at the store. People in blue shirts then sell it too you. Now if most people download software or music for that matter, there is less demand for it at the store, less product gets shipped across the country, less gets packaged, less gets created in the first place. Now if there is less product to be manufactured, transported etc. that means less people are needed to produce it, etc.