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a couple months ago, when the business software alliance (bsa) released its latest stats on "piracy," it's vp of anti-piracy, neil macbride, gave me a call to discuss my earlier complaints about the organizations methodology. needless to say, we did not see eye-to-eye, and the phone call did little to resolve our differences. i'm still hopeful that eventually the bsa will recognize that it's doing more damage to its own position by publishing obviously bogus numbers. so, with the organization releasing another bogus stat today, it's time to explain why it's wrong and misleading.

today's report is an attempt to get the governt involved in protecting bsa member companies' business model, by claiming that the us is losing out on $1.7 llion in tax revenue due to "pirated" software. and, of course, it s with a lovely quote from mr. macbride: "the most tragic aspect is that the lost revenues to tech companies and local governts could be supporting thousands of good jobs and much-needed social services in our communities." and the bsa is even so kind as to quantify what that (not really) lost tax revenue could do: "for example, the lost tax revenues to state and local governts -- an estimated $1.7 llion -- would have been enough to build 100 middle schools or 10,831 affordable housing units; hire 24,395 experienced police officers; or purchase 6,335 propane-powered transit buses to reduce greenhouse gas emissions."

except that this is almost entirely incorrect and it's relatively easy to show why:

1. the report counts every unauthorized piece of software as a lost sale. you have to dig through separate pdfs to find this info, but when you finally get to the methodology it states:

   the software losses are based on the piracy rate and equal the value of software installed not paid for.

   that's a huge, and obviously incorrect umption. many of the folks using the software likely would not have paid for it otherwise, or would have used cheaper or open source options instead.
2. the report makes no effort to count the positive impact of unauthorized use of software in leading to future software sales. this is something that even microsoft has admitted has helped the company grow over time. but according to the bsa's report, this doesn't matter.
3. the report also proudly notes: "software piracy also has ripple effects in local communities." however, "ripple effects" are easily disproved as double or triple counting the same dollar. using ripple effects like that inflates the final number by two or three times. in the link here, tim lee explains this (in reference to an mpaa y done by ipi, but it applies here to the bsa y done by idc as well):

   if a foreigner gives me $1, and i turn around and buy an apple from you for a dollar, and then you turn around and buy an orange from another friend for a dollar, we haven't thereby increased our national wealth by $3. at the beginning of the sequence, we have an apple and an orange. at the end, we have an apple, an orange, and a dollar. difference: one dollar. no matter how many times that dollar changes hands, there's still only one dollar that wasn't there before.
   
   yet in ipi-land, when a movie io makes $10 selling a dvd to a canadian, and then gives $7 to the company that manufactured the dvd and $2 to the guy who shipped it to canada, society has benefited by $10+$7+$2=$19. yet some simple math shows that this is nonsense: the io is $1 richer, the trucker is $2, and the manufacturer is $7. shockingly enough, that adds up to $10. what each participant cares about is his profits, not his revenues.

   this is a huge fallacy that the bsa an idc refuse to acknowledge. when i discussed it with them in may, they insisted that they only to talk about piracy rates, not the loss number. i wonder why...
4. next, if they're going to count ripple effects in one direction, it's only fair to also count them in the other direction. that is, they complain that:

   lost revenue to technology companies also puts a strain on their ality to invest in new jobs and new technologies. for example, the $11.4 llion in piracy losses to software vendors and service providers in the eight states would have been enough to fund more than 54,000 tech industry jobs.

   but what they don't acknowledge is the ripple effects in the other direction. that is, if (going by their umption, remember) every company that uses an unauthorized copy of software had to pay for it, that would represent $11.4 llion in money that all of those other companies could not use to fund jobs at those companies. what about all of those jobs?
5. the bsa/idc stat on lost tax revenue also miscounts on the point above, since it includes the lost in tax revenue from those 54,000 lost jobs, but does not count the equivalent in tax revenue from those other jobs. in fact, in the fine print, the report notes:

   "employt losses are calculated from revenue losses, and only apply to employt in the it industry, not it professionals in end-user organizations. tax revenue losses are calculated from revenue losses (vat and corporate in tax) and employt losses (in and social taxes)."

   in other words, the in tax losses only count one side of the equation and totally ignore the lost in tax revenue from the lost jobs on the other side of the equation. oops.
6. it seems likely that the eventual tax benefits of the unauthorized use of software is most likely to greatly outweigh the lost tax revenue elsewhere. that's because the use of software within industries is a productivity tool that increases overall productivity and output, which would increase taxes beyond just the in taxes of the employees. the y, of course, ignores this point.
7. worst of all, the report seems to ume that direct software sales are the only business model for the software industry, ignoring plenty of evidence from companies that have adopted business models that embrace free software -- generating llions of dollars for the economy (and in taxes). and that's what this really s down to. it's a business model issue. if others started adopting these business models as well, there wouldn't be any "losses" at all.

oh, and just for good measure, the report also falsely claims that: "what many don't realize or don't think about is that when you purchase software, you are actually purchasing a license to use it, not the actual software." that's not exactly true and goes directly against a recent court ruling that said the opposite and goes through a detailed explanation for why a piece of sold software is a sale with restrictions, rather than a license, using previous court precedents.

most of these points have been made to the bsa and idc in the past, and both organizations chose not to address them. the fact that they're continuing to use these obviously false numbers and methodology to now push for the governt to prop up an obsolete business model should be seen as troubling not just for the dishonesty of it, but for the negative impact it will have on the software industry and our economy as a whole.

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you may recognize hop-on from their wide array of cheap-o disposable cellphones and budget-friendly mole devices. the company is looking to build on this reputation by unveiling six new phones including the $125 hop 1801 smartphone and the hop1809 which they claim will be one of the cheapest 3g capable phones you can buy. it will also feature a camera, bluetooth, and support for mpeg-4 media playback.

the company is also looking to build on its lineup of gsm phones with the tri-band hop1803 and the dual-band hop1810. another notable release s in the form of the hop1808, which will feature dual sim card slots for frequent travelers. apparently, it will be similar to the hop 1809, but it will lack 3g and add an fm radio tuner. details are scarce at this point, but we do know that all the phones will be available in north and south america when released.

press release:

hop-on launches six new gsm and 3g phones into the market

the 'anti iphone' has brothers and sisters

irvine, calif., june 6 /prnewswire-firstcall/ — hop-on, inc.

(pink sheets: hpnn) announced today that it will introduce 6 new phones for distribution worldwide. hop-on's new hop1800 series phones will range from a $125 pda phone to the world's lowest cost phone for $10 in the us. these phones are built using high quality standards of components and manufacturing.

peter michaels, president and ceo of hop-on stated, "our new series of 1800 phones will debut into all markets worldwide. we will have market presence throughout the globe with our high-end technology pda phone to our low end phone that is, well, that is really just a phone. since the announcet of our $10usd 'anti iphone', we have had inquiries from distributors and carriers from over 30 countries."

hop-on's new series includes the hop1801 smart phone. this particular phone will be the lowest cost smart phone on the market. the hop1803 is an ultra low price gsm tri band phone, and the hop1805 is an ultra low price cell phone for emerging markets. and the hop1810 gsm dual band camera phone. all four phones will be available for distribution in north and south america, asia, the middle east and africa, supporting english, spanish, portuguese, arac and more upon request. available in north and south america are the hop1808 dual sim mole phone with camera, supported mp4/sms/mms/gprs/wap/fm stereo with bluetooth optional. the hop1809 3g mole phone with camera, supported mp4 /mms/ stk/ java/ brew/ sms and bluetooth. and finally the hop1800, the lowest cost mole phone in the world. this simple phone is a gsm dual band with no display that features a braille keypad.

michaels further stated, "since apple is launching their new 3g iphone next monday, maybe i can talk to steve jobs, ceo of apple and see if he'll buy our $10 phone and include it as a give away in their packaging. this way, if you drop your 3g iphone in the water, you can use the backup to call apple for anther $500 phone. they can call it the back-up iphone! seriously, the launch of our new phones is an exciting time for hop-on; we will penetrate the market worldwide in all price points. we look forward to this next phase of our new innovative phones."

[hop-on]

hop-on, makers of uber cheap throwaway cell phones, are expanding their line to include uber cheap smartphones and 3g phones. the hop 1801 smartphone will sell for $125 bucks. details in the press release are limited, but a t of url tinkering on hop-on’s site leads to the above image and the following specs (screens): [...]

hop-on, makers of uber cheap throwaway cell phones, are expanding their line to include uber cheap smartphones and 3g phones.

the hop 1801 smartphone will sell for $125 bucks. details in the press release are limited, but a t of url tinkering on hop-on’s site leads to the above image and the following specs (screens):

* os: smart nx mole (linux)
* platform: ap (chipnuts processor c7280)
* band: gsm tri band 900/1800/1900 mhz
* dision: 116mm (d) x64mm (w) x14mm (h)
* display: 2.5 inch qvga 320*240 262k tft (touch screen)
* camera: cmos 2m pixels
* external memory slot: micro sd
* ring tone: midi 64 polyphonic

also announced is the 1809 3g camera phone, along with a bunch of disposable gsm phones.

try as we might, we can’t actually find anywhere to buy hop-on handsets. a good chunk of the images on their site are mockups. anyone know if these are anything more than vapor?

maintaining its long-standing reputation for covering all aspects of getting and keeping car insurance, cheapautosinsurance.com has added a comprehensive section on anti-theft devices. by providing information on measures to discourage thieves, from electronic immolizers to lojack systems, cheapautosinsurance shows clients how to reduce not only their risk, but potentially their premiums as well. this special coverage, in addition to free insurance quotes and a full range of supporting insurance data makes cheapautosinsurance.com the internet's premier car insurance destination. (prweb jun 2, 2008)

read the full story at http://www.prweb.com/releases/2008/06/prweb982904.htm

one of these days i am going to throw up on watching/reading testimonials from “real people”. i haven’t really understood the fundatal purpose of these testimonials. do they really impress people into buying shady stuff? are people really so dumb uninformed that they easily get ered into emptying their pockets after hearing testimonials from “real people”? do they really believe that a $50 booklet will make them $100,000 a month? or that a $59 bottle of pills will reduce their weight by 30 pounds in a month?

i don’t know how you all deal with testimonials, but for me, all links/pages/advertisets with “testimonials” are basically off-limits. there is no valuable information ever in such testimonials. mostly it is simply fake text/speech for the purpose of self-glorification, or paid content produced by “actors” or “writers” - who don’t have anything to do with the product. i would never make a purchasing decision based on such testimonials.

here are a few examples of some duous testimonials that qualified for this rant.

• ever heard of the “crazy fox” home business advertisets on tv? the whole premise of the advertiset doesn’t go down well with me. isn’t “fox” considered a symbol for cunningness - with a definite negative connotation? remember “cunning as a fox” or “sly as a fox”? and yet people believe an animated fox when it talks about how to make hundreds of thousands of dollars by working from home?

a good part of this foxy advertiset consists of testimonials from people who claim to have made a ton of money by following the fox’s advice. watch these actors/liars in the video - especially how they enunciate the numbers and fake happiness:

feed readers click here for the video.now, isn’t that some real furry piece of crap.

• another noteworthy source of testimonial bs s from well-built males and females (sometimes, with names phonetically similar to well-known actors/actresses) who swear that various parts of their bodies were shaped exclusively by various expensive exercising machines. at times, these “real” testimonials are also accompanied by morphed (almost certainly) and/or digitally remastered “before-after” pographs.

• next, here is an example of some brash touting of “real” testimonials on www.therichpom.com:

make money online - real testimonials

yeah, yeah, you’ve heard it all before. make money online using the internet, work from home etc. it’s all a g scam isn’t it, just like this website?

don’t think so!

see below - don’t take my word for it. these are real people who have had the balls to buy my product and they have successfully made money online.

i don’t know what kind of balls one needs to tolerate such brash marketing and, and on top of that, believe in some lame testimonials like this one:

“my wife told me i’d been stupid to spend eighty bucks on some internet ‘get rich quick program’. i told her it was a long-term thing, but even i was surprised when we had earned our rent money in the first month alone. i’m now into my third month and i have quit my job. in a word - thanks”

quit job in the third month! wow.. that’s awesome - and i think the dude said that in the same breath as he said “long-term thing“. i guess it’s no wonder then if stupid websites that carry such testimonials are still making money.

• here is another money making “self-testimonial” from a rather shady website ( www.thousanddollarprofits.com ):

“that’s me, sitting outside of my home in hawaii. keep in mind i haven’t always made over $35,000 per week, from my home… not so long ago i was working as a construction laborer, drowning in the corporate rat-race, and struggling to pay my lls. since my breakthrough with the ‘reverse funnel system’, i now make more money in one week than i used to in a year - and you could too. i?ll prove it?”

“i am absolutely convinced that my proven system, will create mive wealth for virtually anyone regardless of your background, education, or even your current level of in… i’m going to prove it!”

that’s right, i have never heard of a “construction laborer” drowning in a “corporate rat race“. plus, one just has to wonder why these folks, who make $35,000 a week, create and run some low-grade, down right duous and cheap websites.

• here is one that claims weight loss by listening to an audio cette ( www.hypnosisdownloads.com ):

“i have just started educating myself on hypnosis. i downloaded ‘ weight loss motivation‘ and then recorded it on a cette and have listened to it for about 3 weeks now. i have lost 12 pounds but more importantly i notice that the choices i have been making are a lot smarter. thank you!!”

“i would you recomd this download to anyone looking to take back control of their life!!”

if only weight loss was this simple - sit in traffic for 2 hours every day and just listen to an audio cette many times over! better still, i would love to see something like “get rich motivation” - i will listen to it for three weeks and then claim to be richer! i will probably find something like that if i look hard enough. sounds like the right kind of product for folks who believe in dogbert-ism.

• now, here is one that beats them all by a comfortable margin in terms of absolute testimonial bull - and it s from www.mattersofsize.com. no prizes for guessing the ject matter under consideration:

“i now have 8.5 inches!”
“you’re absolutely one of my heroes. your inventiveness, sensitivity, and strength are inspirational, as is your progress. thank you for giving me the 8.5? i have always dreamed of. i joined 3 other programs with no luck. i started at 6? and i tried everything from pills and weights to pumps and potions and nothing worked. after working with you over the past year my dreams have finally true. this site was the best move you could have made. now the world will have access to what i have had been spoiled with.”

somebody please kill me already!

consumerism, musings