Software piracy drops 1%, but value of losses rises: Study

The monetary value of "losses" to the industry (due to piracy) showed a record level of $53 billion, up by 11%.

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L.N. Revathy Coimbatore, May 22 The Sixth Annual BSA-IDC Global Software Piracy Study findings reveal a one per cent drop in the software piracy levels to 68 per cent in India in 2008 and a rise in the monetary value of piracy loss to $2.7 billion compared to $2 billion in 2007. The study was conducted by market research and forecasting firm IDC and released by the Business Software Alliance (BSA). The study covers piracy of all packaged software that run on personal computers including desktops, laptops and ultra-portables, but does not include server- or mainframe-based software. The study shows that in 2008, the rate of software piracy dropped in 57 of the 110 countries studied, remained the same in 36 and rose in 16 countries. The worldwide software piracy rate though has risen for the second year in a row from 38 per cent to 41 per cent. And, this has been attributed to the fast growth in PC shipments in high-piracy countries such as China and India. In another sign of the scale of the problem, the monetary value of "losses" to the software industry (due to software piracy) showed a record level of $53 billion, up by 11 per cent. Industry sources say half of this increase was due to the falling dollar, excluding of course the effect of exchange rates. "We are continuing to make significant progress against software piracy, but it (software piracy) is widely prevalent giving illegal software users an unfair advantage in business and spreading security risk," the President and Chief Executive Officer of BSA, Mr Robert Holleyman, said. Mr Jeffrey J. Hardee, BSA's Vice-President and Regional Director, Asia-Pacific, observed that the average software piracy rate in the APAC region rose by two per cent to 61 in 12 months with losses reaching over $15 billion. "Even if such illegal activities were to go down in high-piracy countries, their growing market share for PCs could drive the regional average up," he said. China is moving in the right direction in bringing down PC software piracy levels, and many governments across the region have pledged their support through awareness campaigns, enterprise software legalisation initiatives, enforcement actions and stronger legal remedies. Nevertheless, challenges remain, Mr Hardee said and pointed out that it was due to the rising demand for assembled PCs in emerging markets. "The availability of pirated software on the Internet is facilitated by increasing broadband penetration in the region. This is another major concern," added Mr Hardee. IDC has predicted that lowering PC software piracy by 10 points over four years would create six lakh additional jobs worldwide. `This projection has been confirmed by actual experience in China and Russia', states the new study. Gradual decline in India Mr Keshav Dhakad, Chair of the BSA India Committee, noted that the software piracy levels were witnessing a gradual decline in India. "This could be attributed to the intellectual property (IP) awareness efforts being driven by governments, industry and the judiciary. While the domestic software industry has potential for tremendous growth, it continues to be challenged by high software piracy rates. We are hopeful that the new government, together with the state governments, will take positive steps in driving anti-piracy initiatives, such as the formation of a national anti-piracy taskforce, the setting up of special IP courts, the promotion of IP rights and the training of enforcement officials," added Mr Dhakad. "At a time when the Indian IT industry is moving towards product development, protection of IPR and reduction of software piracy should be taken seriously by all stakeholders. The findings of this study reinforces the need for collaborative effort between the government and industry to tackle piracy through stronger policy, awareness and enforcement initiatives to help enhance India's economic and IT competitiveness," said Mr Som Mittal, President, Nasscom. The findings showed that the global economic recession was having a mixed impact on software piracy. The piracy level was found to be less than 20 per cent in the US, Japan, New Zealand and Luxembourg and over 90 per cent in Armenia, Bangladesh, Georgia and Zimbabwe.