News >> Browse Articles >> Business
News >> Browse Articles >> Software
Report: Software Piracy Cost the Industry $50B
Featured Author:
DailyTech
DailyTech is a leading online magazine for a well-educated, tech audience. Its readers enjoy hard-hitting and up to the minute CE, PC, IT and information technology news. DailyTech’s fast-moving content also reaches out via news syndications, public portals, and forums.
Shane McGlaun / DailyTech
May 12, 2009
‘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%.
© 2009, DailyTech
PureEvil
4 months ago
196 comments
oh snapple, for those who do not know Hollywood the place where movies were made also began its history with piratism isn't that awesome peeps. anyway pirating software videos and other things will never go away ever. losses most of the money made from these software companies come from business not from the regular folks.
geomar
4 months ago
44 comments
Give the software away, charge for the support....hmmm Oh yeah! that is the way the Open Source community does business huh?
ccorliss
4 months ago
162 comments
Piracy will never be defeated. As long as you have to pay for software there will always be a way to get a free copy. I personally have no problem with piracy and in most cases I support it, but honestly, it will never end.
wdr525
4 months ago
44 comments
I'm not even sure that lowering the price of this software would help matters at all. After all, why buy legitimate (even if you can afford it) if you can get a pirated copy for cheaper/free? It might help, but the greatest incentive does lie with the pirated software. Open Source stuff, of course, beats both except that it's still somewhat obscure.
money
5 months ago
74 comments
Make it where the average person can use it and afford it and piracy will go down.
AmericanPrestige
5 months ago
10 comments
Ignorance about open systems
Simple if you do not have money to pay for Microsoft get open system
No ofence but Microsoft makes people stop ticking and just give you a window into the www
Open Systems are the door to www systems, gives you more critical thinking
Not to forget:
With Microsoft you paid for the software and you have an added cost for the antivirus and firewall
With Open Systems you learn about your system defaults and close them if you have too you paid
for it consulting to make more strong your system.
Account Removed
5 months ago
Mostly of people who need to absolutely have a cracked software are people that can't find out themselves about GNU software. They are either too dumb or too snob.
Crackers can't crack GNU. Free software kill the purpose of it.
MrPerlishells
5 months ago
2 comments
Counting loses due to piracy is like counting all the eggs that didn't hatch. They never lost those profits to begin with.
To stop or reduce piracy, they could start by lowering the price of software. A good way to do that is to get rid of the anti-piracy DRM, activation and localization or regionization schemes. Pirates may find a way around and issue cracks. This makes the software more convenient and work for more machines. It is a disincentive for legitimate users since it is less convenient having to put the original CD which, could get scratched, everytime you run that particular software. For movies you can't give a DVD as a gift to your friends or relatives overseas.
3much
5 months ago
374 comments
What???? Incredible! No mention of Nigeria here!!! The country everyone loves to hate! Interesting and rather suspicious... .Hmmm...ah, well I guess any one country can't be good at everything bad; "specialisation" is important...no? lol
mrpumpkinguy
5 months ago
36 comments
danman1453: Your logic might be ok if you are complaining about software costs, but it is completely irrelevant with respect to piracy.
The market price of the product is not relevant. If prices dropped by a factor of ten, there would still be piracy. Until the price of the software approaches the cost of the distribution media, so that the pirate's profit margin evaporates, there will be piracy. And you can be certain that pirate's profit margins are pretty attractive; costs = fixed costs for an initial license (maybe) and CD/DVD burners, plus variable costs for distribution media). Piracy is something that happens just because it can. You cannot dispute the economics: huge margin + huge demand.
There are only a few ways to shut down piracy: reduce supply through economics (I just explained the difficulty there); reduce supply through technology (distribute software in a way that cannot be copied or pirated); or reduce the demand.
We have already seen how ineffective fear is in controlling demand -- the music and motion picture industries have not been very successful in waging terror campaigns on consumers, but they keep trying anyway. Can we appeal to morality? Good luck with that.
Piracy has always existed, and is likely to continue to exist for a long time to come. I am not aware of piracy being the reason for any industry to cease. Poor product, unreasonable pricing and bad cost control, yes... but piracy? I don't think so. I say we move on to some more important problem. Let's leave piracy as a profitability problem for software manufacturers, just like it is for the MPIA and RIAA.
danman1453
5 months ago
26 comments
Maybe if the weren't trying to sell us bloatware and all sorts of bundled crap, a lot of the software pirates out there would stop. ok, so here is a little math for you. We have pirated materials reaching the 50B mark. Say with an average cost of 200 dollars, that is 250 million copies of whatever it is that they are pirating. If they drop the cost of the software, say half of them are now wiling to pay for it at an average cost of 100 dollars. Thats an income of 12.5 Billion in sales they didn't have before. I cant really see why the cost of software is so high. Maybe if these software companies crack down a little more on people slacking at the "water cooler" and browsing the web while getting paid for it, the development costs wouldn't be so bad. Now, with a lower front end cost per legitimate license, more clients are attracted to the same product. More clients equals more profit.
Is my logic twisted? or is it really that hard to implement a little "whoopass" in the workplace?