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Piracy rates are the highest in developing nations

Piracy in the digital goods market runs rampant. Music piracy is what typically comes to mind when many consumers think piracy, but software is one of the categories that is targeted by pirates the most. The reason is that software like Windows operating systems and Office productivity suites are desired by many, but the high price puts them out of the reach of users particularly in developing nations.

A new joint report from the Business Software Alliance (BSA) and research firm IDC has found that losses to software companies from pirated products have topped the $50 billion mark for the first time ever.

According to the report, headway against piracy is being made by companies, law enforcement officials and governments, but in some areas -- like the U.S. -- anti-piracy efforts have stalled. The sixth annual BSA-IDC Global Software Piracy Study found that in 2008 the PC software piracy rate dropped in 57% of 110 countries included in the study. Nearly a third of the countries studied found that the software piracy rate remained the same.

The study claims that the worldwide piracy rate rose for the second year in a row moving from 36% to 41%. The rise in global piracy is mainly attributed to PC shipments growing the fastest in countries like China and India where piracy is much more rampant. China has recently cracked down on software pirates and convicted 11 for pirating Microsoft software.

BSA President and CEO Robert Holleyman said, "The bad news is that PC software piracy remains so prevalent in the United States and all over the world. It undermines local IT service firms, gives illegal software users an unfair advantage in business, and spreads security risks. We should not and cannot tolerate a $9 billion hit on the software industry at a time of economic stress."

EWeek reports that the study does note that the global recession has affected the piracy rate to some extent. IDC chief research officer John Gantz said that consumers are keeping old computers longer in the current economy and consumers that hold onto old computers are more likely to install pirated software on the machines.

Gantz said, "Reduced buying power is only one of many factors affecting software piracy. The economic crisis will have an impact – part of it negative, part of it positive – but it may not become fully apparent until the 2009 figures come in."

The positive aspect according to Gantz is that the reduced buying power of the average consumer has them looking at netbooks, which are often bundled with legitimate copies of software. IDC predicts that the piracy rate will only increase with 460 million new internet users coming online in emerging markets over the next five years. These emerging markets are where piracy is most rampant with as much as 90% of software installed on computers being pirated versions.

The countries with the lowest levels of piracy according to the study were the U.S., Japan, New Zealand, and Luxembourg -- all with piracy rates near 20%. The countries with the highest percentage of piracy included Armenia, Bangladesh, Georgia, and Zimbabwe -- all with piracy rates over 90%.

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RE: Not Lost Sales
By Sazar on 5/12/2009 2:09:51 PM , Rating: 2
I see what you are saying here, but I can't fully agree. My example for this being college and HS students that are required to have MS Office. Have you seen the price for that software and been on a college budget? If so, then you know why people are pirating.

Not a sound argument as Microsoft and other companies provide educational licenses for schools and students can purchase products at discounted rates.

If you can't pay $100 for an application your kids will use through their entire school "career" but are willing to spend hundreds on shoes and clothes, you have a priority fail.

RE: Not Lost Sales
By RandallMoore on 5/12/2009 2:23:58 PM , Rating: 3
Not sure how you claim that my argument isn't sound, and then compare software to shoes.

You can buy a pair of $200 Nike's or a pair of $25 off brand shoes. Both have comparative function.

You can not however buy an adequately featured 25 dollar MS Office license.

You are using flawed comparison with software to clothing. I often buy the cheaper alternative to expensive name brand clothing. Same goes for other things that I buy. You can't automatically assume that because people refuse to pay a high price for something that they are driving $100K cars and dressing in Armani.

RE: Not Lost Sales
By OCedHrt on 5/12/2009 2:36:35 PM , Rating: 2
CSU's in California sell an Office student license for $10. It is as full featured as a student will need (and more).

RE: Not Lost Sales
By LRonaldHubbs on 5/12/2009 2:39:22 PM , Rating: 3
You're reading into that too much. His point is that there are MANY ways to cut expenses such that Office is entirely affordable.

- Does the student in question have an mp3 player? Could they have gotten a cheaper model, and did they really need it at all?
- Does the student have a cellphone? Could they have gotten a lesser model, and can they scale back their plan for a lower monthly cost?
The student presumably has a computer if they want Office. - Did they spend extra money on more computing power than they really needed?
- How much does the student spend on beer in a given week?
- How much does the student spend on gasoline in a given week?
- How much does the student spend anually on videogames?

These are but a few examples of costs that can be reduced. It's really not very difficult to save $100.

RE: Not Lost Sales
By GaryJohnson on 5/12/2009 2:52:26 PM , Rating: 5
How much does the student spend on beer in a given week?...These are but a few examples of costs that can be reduced.

What kind of inhuman monster are you? Return beast, from the depths of hell from whenced thou came!

RE: Not Lost Sales
By LRonaldHubbs on 5/12/2009 3:16:13 PM , Rating: 4
Okay, I'll take that one back. I do not condone drinking less quantity or quality of beer to save money. I apologize for giving such a horrible example.

RE: Not Lost Sales
By MozeeToby on 5/12/2009 2:44:46 PM , Rating: 2
Actually, most colleges have student versions of MS Office available (at my college they were $15) though I'm sure not all colleges do.

Besides that, there are free options with 'comparative function' as you put it. Open Office will do 99% of what most people need (with the possible exception of finance majors). Science and engineering majors should arguably grab and get used to LaTeX before they graduate anyway, which is also freely available as that is what is expected if you ever want to publish a paper.

By your own analogy, the 'off brand' options Open Office or Google Docs won't do every as well or the same as the 'branded' MS Office. Just like the $25 shoes aren't going to perform as well as $200 Nike's (coming from a former Cross Country runner; do NOT do long distance running in cheap shoes, you'd be better off barefoot).

RE: Not Lost Sales
By stromgald30 on 5/12/2009 2:49:12 PM , Rating: 2
As other posts have mentioned, you can get Office for usually less than $20 at most universities. In addition, there was the 'ultimate steal' thing sponsored by microsoft where any student with a valid e-mail address from a accredited college could get Office 2007 for $65 or so.

To my knowledge, not many people buy MS Office at full price. With a little digging you can usually find a good deal.

RE: Not Lost Sales
By Lonyo on 5/12/2009 2:53:39 PM , Rating: 2
I've seen the UK price for Office Student and Home.
It's £60 ($90) for a 3 user license. That's £20 ($30) per license. That's nothing.
That's at most the price of 2 games, maybe a couple of pairs of shoes or whatever.
You are saying that is out of the reach of a student? You could have your copy and your parents could have a copy as well.

Unless you need more than Excel, Powerpoint and Word, it's quite a bargain.

RE: Not Lost Sales
By justjc on 5/13/2009 6:42:10 AM , Rating: 2
A small flaw in your 3 licenses argument. You can't install a copy on your parents computer, without it being an illegal copy, as the license only applies to computers owned by students.

Likewise you're expected to delete your study edition, when you graduate, as it expires the moment you're no longer a student.

"Can anyone tell me what MobileMe is supposed to do?... So why the f*** doesn't it do that?" -- Steve Jobs
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