Piracy Rate Unchanged at 35%; Global Losses Increased by $1.6 Billion
LONDON, (Tuesday, May 23) – Thirty-five percent of the packaged software installed on personal computers (PC) worldwide in 2005 was illegal, amounting to $34 billion in global losses due to software piracy. However, some improvements in a number of markets indicate education, enforcement and policy efforts are beginning to pay off in emerging economies such as China, Russia and India and in Central/Eastern Europe and the Middle East & Africa.
These are among the findings of an annual global PC software piracy study released by the Business Software Alliance (BSA), the international association of the world’s leading software developers. The independent study was conducted by IDC, the information technology (IT) industry’s leading global market research and forecasting firm.
“The progress made in reducing PC software piracy in several emerging markets provides some encouragement; however, much more needs to be done,” said BSA President and CEO Robert Holleyman. “With more than one out of every three copies of PC software obtained illegally, piracy continues to threaten the future of software innovation, resulting in lost jobs and tax revenues.
Piracy rates decreased moderately in more than half (51) of the 97 countries covered in this year’s study, and increased in only 19. The global rate was unchanged from 2004 to 2005 as large developed markets like the United States, Western Europe, Japan and a handful of Asian countries continue to dominate the software market while their combined piracy rate hardly moved.
Some positive changes could be seen in the rapidly developing countries of Russia, India and China. Russia saw a four point drop in its PC software piracy rate while India’s piracy rate declined two points. China, with one of the fastest growing IT markets in the world, dropped four points between 2004 and 2005.
“This year marks the second year in a row where there has been a decrease in the PC software piracy rate in China. This is particularly significant, considering the vast PC growth taking place in the Chinese IT market,” said Holleyman.
The study also found that 19 of the 26 countries in the Middle East and Africa declined somewhat, with 12 countries dropping two or more percentage points. In Central/Eastern Europe, the piracy rate declined in 15 of the 18 countries included in this year’s study. Notably, Ukraine dropped six points to 85 percent during the past year.
Global losses from software piracy amounted to $34 billion in 2005, an increase of $1.6 billion over the previous year. In countries with very large software markets, comparatively low piracy rates can amount to huge losses. While the United States had the lowest piracy rate of all countries studied at 21 percent, it also had the greatest individual losses – $6.9 billion. China saw the second highest losses at $3.9 billion with a piracy rate of 86 percent, followed by France with losses of $3.2 billion and a piracy rate of 47 percent.
Other key findings:
• The four countries with the largest percentage point drop in their piracy rate during the past year were China (4 points), Russia (4 points), Ukraine (6 points) and Morocco (4 points).
• The countries with the highest piracy rates were Vietnam (90 percent), Zimbabwe (90 percent), Indonesia (87 percent), China (86 percent) and Pakistan (86 percent).
• The countries with the lowest piracy rates were the United States (21 percent), New Zealand (23 percent), Austria (26 percent) and Finland (26 percent).
The following chart illustrates average piracy rates by region of the world:
“Many factors contribute to regional differences in piracy – the strength of intellectual property protection, the availability of pirated software, cultural differences and IT-related market trends,” said John Gantz, chief research officer at IDC. “There’s no doubt that lowering software piracy takes constant work and investment, but those investments can unlock enormous benefits for the industry and local economies.”
A previous IDC/BSA study showed that if the global piracy rate were to drop 10 points to 25%, it would create as many as 2.4 million new jobs, $400 billion in economic growth, and $67 billion in tax revenues worldwide.
“Stronger intellectual property protection and education and awareness are absolutely critical to stem the growth of piracy around the world,” said Holleyman. “As broadband growth continues and the IT sector expands, the influx of new users and the increased availability of pirated software means continual efforts are required to reduce and keep software piracy down.”
The BSA-IDC Global Software Piracy Study covers all packaged software that runs on PCs. The study does not include other types of software such as that which runs on mainframes or servers or software sold as a service. IDC used proprietary statistics for software and hardware shipments, conducted 5,600 surveys and enlisted IDC analysts in 38 countries to confirm software piracy trends.
For more details or for a copy of the study, please visit www.bsa.org/globalstudy.
The Business Software Alliance (www.bsa.org) is the foremost organization dedicated to promoting a safe and legal digital world. BSA is the voice of the world's commercial software industry and its hardware partners before governments and in the international marketplace. Its members represent one of the fastest growing industries in the world. BSA programs foster technology innovation through education and policy initiatives that promote copyright protection, cyber security, trade and e-commerce. BSA members include 4D, Adobe, Apple, AttachmateWRQ, Autodesk, Avanquest Software, Avid, Bentley Systems, Borland, Cadence Design Systems, Cisco Systems, CNC Software/Mastercam, Corel, Dell, Enteo, Entrust, Graphisoft, Grupo STR, HiT Internet Technologies, HP, IBM, INAZ, INSYSTEK, Intel, Intergraph, Internet Security Systems, iQuate, LMS International, McAfee, Mamut, Microsoft, Microstar, Monotype, MOST Software, Nemetschek, Numare, O&O Software, OWG, Panda Software, PTC, Robobat, RSA Security, SAP, SGS, SIA, SolidWorks, SP Grupo Sage, Softline Pastel, Staff & Line, Sybase, Symantec, Synopsys, The MathWorks, UGS, Visma, XQDC and Young Digital Planet.
IDC is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. IDC helps IT professionals, business executives, and the investment community make fact-based decisions on technology purchases and business strategy. Over 850 IDC analysts in 50 countries provide global, regional, and local expertise on technology and industry opportunities and trends. For more than 42 years, IDC has provided strategic insights to help our clients achieve their key business objectives. IDC is a subsidiary of IDG, the world's leading technology media, research, and events company. You can learn more about IDC by visiting www.idc.com.
CONTACT:
Lisa Merchant, Communications Director, EMEA, BSA
+44 20 7245 0304 or lisam@bsa.org
Andre Labadie, Brands2Life
+44 20 7592 1200 or andre.labadie@brands2life.com
