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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: Crap Logic
By Motoman on 5/12/2009 3:11:07 PM , Rating: 3
Exactly. Same old BS from Big Content.

In reality, which is where I like to hang out, the "true" cost of piracy is a lot closer to $0 than it is to $50,000,000,000.

...which does nothing to speak to the $ generated by piracy, when people get something illicitly that they later choose to buy.

RE: Crap Logic
By Brigga on 5/12/2009 8:07:12 PM , Rating: 1
So how many people pirate hardware? I am pretty sure everybody here pays for their hardware which a lot of people put hard work into to give you something to run your software on. I am pretty sure they want to be rewarded for their hard work with payment of some sort... as it currently stands money, not a pat on the back. Why can't software companies expect the same thing? I am pretty sure those at Canonical dont work for free... someone is bank rolling them...

RE: Crap Logic
By radializer on 5/13/2009 2:23:33 PM , Rating: 2
And the simple (and somewhat cynical) response is ... people do not pirate hardware purely because it is not easy --> obviously due to innumerable physics-based constraints that are not even worth listing.

The day it magically becomes as easy to pirate hardware as it is to pirate software - that is the day you will see bootleg high-end CPUs and GPUs with gobs of super-fast RAM in every old PC.

Piracy is a state of mind ... people do it because they can and because the repercussions are limited. All these so-called "loss estimates" are absolutely worthless since none of them take basic human psychology into account.

RE: Crap Logic
By jconan on 5/12/2009 9:54:09 PM , Rating: 2
True, especially when they are claiming when they are claiming loss of sales due to piracy of songs over the internet. Then why are there so many people selling their used cds to used music dealers like Amoeba Records in drones and at pawn shops? I doubt that it's because of piracy it's because people can't afford it. If they had the money to buy they would buy smarter only when they are on sale and not at an inflated MSRP unless it is an impulse item. Most people can barely afford to fill their fridge or let alone invest in tools of the trade. BSA has to put a price to justify their salary and fees paid by other companies and hence they exaggerate like most CEOs do on their company profits or income.

RE: Crap Logic
By jconan on 5/12/2009 10:02:14 PM , Rating: 2
To add on, companies also need to explain why they have poor sales from poor software implementation. Like years Microsoft believed that majority was their lost sales was due to piracy, and to their findings with Windows Vista it's because consumers tried it and disliked it and would rather use an alternative operating system like Unbuntu, OSX, XP, and etc... If a company claims their sales are from piracy it's probably over exaggerated or lie to cover up for poor programming or buggy code that consumers will not put up with or value.

"I'm an Internet expert too. It's all right to wire the industrial zone only, but there are many problems if other regions of the North are wired." -- North Korean Supreme Commander Kim Jong-il
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