Fall Through the Cracks Friday – How Bad for the Economy is Piracy?

On this weeks fall through the cracks Friday, we’re talking about piracy.  Not pirates like Johnny Depp, but pirates like Bit Torrent.

The supporters of the much talked about SOPA (Stop Online Piracy Act) have said that online piracy is a huge problem, one which costs the U.S. economy between $200 and $250 billion per year, and in addition, more than 750,000 American jobs.

Our friends at Freakonomics found that this might not be true.  Their analysis:

The good news is that the numbers are wrong — as this post by the Cato Institute’s Julian Sanchez explains. In 2010, the Government Accountability Office released a report noting that these figures “cannot be substantiated or traced back to an underlying data source or methodology,” which is polite government-speak for “these figures were made up out of thin air.”

More recently, a smaller estimate — $58 billion – was produced by the Institute for Policy Innovation (IPI). But that IPI estimate, as both Sanchez and tech journalist Tim Lee have pointed out, is replete with methodological problems, including double- and triple-counting, that swell the estimate of piracy losses considerably.

So, this moves into a discussion on the Freakonomics website about what the actual impact of piracy is, especially when considering lost sales.  Is it right to include a sale lost to someone who may have never had the urge to purchase a product in the first place, but obtained it simply because it was there and free?

An interesting read by the guys who take statistics and turn them inside out.

This entry was posted in Cyber, FTTCF and tagged , , , by plushq. Bookmark the permalink.

About plushq

The Professional Liability Underwriting Society (PLUS) was founded in 1986 by industry professionals who recognized the need for a forum for individuals involved in the field of professional liability. The Society is a non-profit organization with membership open to persons interested in the promotion and development of the professional liability industry. Membership consists of over 6,500 individuals, representing over 1,000 companies active in the many fields of professional liability. PLUS currently receives the support of more than 200 companies through corporate membership. PLUS is recognized as the primary source of professional liability educational programs and seminars, assistance to its members to help serve clients, and information regarding professional liability. The Society is continually seeking new means to fulfill its mission statement and better serve its members.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

w

Connecting to %s