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The cost of software piracy

By Ulli Diemer


Letter to the The Editor, ComputerWorld

It may be the job of the software industry's PR people to pump out figures designed to make software piracy seem like a huge drain on the economy. But why do the media have to uncritically parrot their highly suspect statistics without scrutinizing them to ask how valid they are?

The enormous dollar amounts the industry throws around in its PR campaigns are purely imaginary. These numbers -- $1.1 billion a year is what their latest press release claims -- are nothing but guesses, guesses based on absurd -- and demonstrably false -- assumptions.

In their dream world, everyone who ever tries out a piece of software they haven't bought is depriving the industry of the full retail price of that software. In the real world, people often try out software to see if it's worth buying. Since the industry has decided, in its greed, to make it impossible to 'test drive' a program without first buying it, and since users know that software is often buggy and doesn't function as advertised, people understandably circumvent the rules in order to check out the true merits of a particular program. Often what happens is that they try it out, find it doesn't meet their needs, and delete it. How different is that from test driving a car? Does the automobile industry spend its time whining about how much money they lose to 'car pirates' who test drive a car and then decide not to buy it?

Even more ridiculous than the industry's grossly inflated numbers is their claim that the value of pirated software, whatever the true amount is, is money that is "lost" to "the economy". The plain fact is that not one cent of it is "lost". Instead of being spent on software, that money is simply spent on something else. That something else might be a competing product, or it might be rent, or beer, or books. But certainly it is spent on something, and it ends up circulating in the economy in just the same way as money spent on software does. It may be a loss to Bill Gates and his cohorts, but a loss to the economy it isn't.


Ulli Diemer
November 16, 2005


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