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Study Exposes Increase In Software Piracy

May 12, 2009

Software piracy in the Asia-Pacific region continued to worsen last year, caused by the rapid growth in computer sales and the availability of bootleg programs online, according to the Business Software Alliance.

The annual survey by the Business Software Alliance (BSA) and industry research firm IDC showed that in 2008, an average of 61 percent of the region’s software was unlicensed. This number has increased from 59% the year before.

BSA is an industry group that strives for copyright protection and has members from some of the world’s biggest technology companies, including Apple, IBM, Microsoft and Adobe.

According to the study, legal software vendors went on to lose $15.26 billion, up 8.3% from $14.09 billion the year before.

The global average of unlicensed software went up to 41% in 2008 from 38% the previous year, incurring losses of almost $53 billion, the study said.

The problem may get even worse worldwide this year as financial crisis forces consumers to hold back on new purchases, the study added.

“The economic crisis is likely to have a bigger effect on software piracy in 2009″¦since consumers are more likely to hold on to their PCs longer, this may result in increased software piracy because older computers are more likely to have unlicensed software,” it says.

However, Jeffrey Hardee, BSA’s vice president and regional director, said last year’s increase in software piracy rate was the result of a rapid growth in computer sales.

“Even if piracy were to go down in every high-piracy country, their growing market share for PCs could drive the regional average up,” he said.

According to the study, the increase in Internet availability is proving to be another factor contributing to the increase.

“The availability of pirated software on the Internet, which ironically is facilitated by increasing broadband penetration in the region, is also a major concern,” said Hardee.

Software includes operating systems, systems software like databases and security packages and application software like office packages, finance and tax packages and PC computer games.

Last year, Bangladesh was the biggest offender in the Asia-Pacific with a 92% piracy rate. Sri Lanka was close behind at 90% and Pakistan at 86%.

Japan had the lowest rate, at 21%, followed by New Zealand at 22% and Australia at 26%.

The study showed the average piracy rate for China as having dropped to 80% last year from 82% in 2007.

The improvement in China is being attributed to a “more vigorous enforcement and education,” it said.

Central and eastern Europe had the world’s highest software piracy rate last year with an average 66%. Latin America was followed with 65%, and the Asia-Pacific came in last.

The Middle East/Africa region had a piracy rate of 59% and Western Europe had 33%. North America had the lowest software piracy rate at 21%.

Robert Holleyman, president and CEO of the BSA, said that while U.S. piracy accounted for 20% of the total market, the lowest in the world, it was still a big problem because more software was sold in the United States than anywhere in the world.

Holleyman said much of those losses came from small businesses that use unlicensed copies of popular software programs. Though they might have 50 PCs, they are only paying for rights to run the software on 25 of those machines. “The U.S. has the highest single dollar loss,” he said.

The study found seven countries with piracy rates of 90% or higher: Georgia, Bangladesh, Armenia, Zimbabwe, Sri Lanka, Azerbaijan and Moldova.

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