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Although PC software piracy declined in many countries in 2007, piracy increased in fast-growing PC markets, resulting in an overall rise of piracy from 35% to 38%, and dollar losses that increased by $8 billion to nearly $48 billion.  The annual study was conducted by IDC and released by the Business Software Alliance (BSA).

“We are making much-needed progress in the battle against PC software piracy, and that’s good news for governments, end users, businesses, and the industry,” said BSA President and CEO Robert Holleyman. “The battleground is now shifting, however, to emerging markets where many of our collective challenges remain.”

Software piracy has a negative effect on more than just the software industry.  It also harms local resellers and services firms, lowers government tax revenues, and increases the risk of cyber crime and security problems.  A recent IDC study found that reducing software piracy by ten percentage points over four years would deliver billions in economic growth and generate hundreds of thousands of new jobs.

The Numbers

The three lowest-piracy countries were the United States (20%), Luxembourg (21%), and New Zealand (22%).  The three highest-piracy countries were Armenia (93%), Bangladesh (92%), and Azerbaijan (92%).  Piracy rates dropped slightly in many low-piracy markets which have had stagnant rates for years, including the United States (-1%) and United Kingdom (-1%).

Russia showed the best improvement with a one-year drop of seven points to 73%, and a five-year drop of 14 points.  Russia’s piracy rate is still high but decreasing quickly as a result of legalization programs, government engagement and enforcement, user education, and an improved economy.

Piracy Factors

According to the BSA, the following market factors increase piracy rates:

• Fast growth in the consumer and small business sectors, which are the hardest sectors to lower piracy
• Expanded Internet and broadband access, especially in emerging markets, makes it easier to pirate and share software

The following market factors decrease piracy rates:

• Increasing globalization, especially in emerging markets
• Anti-piracy technologies such as digital rights management (DRM)
• New software distribution models such as software-as-a-service (SAAS)

Blueprint to Reduce Piracy

The BSA has developed a five-point “blueprint” to reduce software piracy:

1. Increase public education and awareness of the value of intellectual property and the risks of using unlicensed software.
2. Update national copyright laws to implement World Intellectual Property Organization (WIPO) obligations in order to enable better and more effective enforcement against digital and online piracy.
3. Create strong enforcement mechanisms as required by the World Trade Organization (WTO) Trade-Related Aspects of Intellectual Property Rights Agreement (TRIPS), including tough anti-piracy laws.
4. Dedicate significant government resources to the problem, including national IP enforcement units, cross-border cooperation, and training for local officers and judiciary officials.
5. Lead by example by implementing software management policies and requiring the public sector to use only legitimate software.

Article published on May 16, 2008

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