Software piracy down, but piracy losses up

$33bn global shortfall, gasps BSA

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More than a quarter (27 per cent) of software in use in UK last year was pirated. The figure is down two percentage points from 29 per cent in 2003, but still represents a huge loss to software developers according to a global software piracy study by IDC, sponsored by the Business Software Alliance (BSA).

Thirty-five percent of the software installed on PC worldwide was pirated in 2004, a one percentage point decrease from 36 per cent in 2003. According to the BSA, losses due to piracy1 increased from $29bn in 2003 to $33bn in 2004. Losses increased even though piracy fell because of a growth in the PC software market of six per cent and the declining value of the US dollar against many world currencies.

The US accounted for $6.6bn of these losses even though it had the lowest piracy rate of all countries studied (21 per cent). Software piracy in the UK cost the industry more than £1bn ($1.8bn), the survey concludes.

Lobby fodder

"The level of software piracy remains unacceptably high," said Siobhan Carroll, the BSA's regional manager in Northern Europe. "While ongoing campaigns by ourselves and other creative industries will help raise awareness of the piracy problem and respect for intellectual property, the support of the Government will be crucial in bringing the rate down."

The BSA is now urging the UK Government to follow through on its manifesto pledge to take tougher action to tackle intellectual property (IP) crime. In its pre-election manifesto, the Labour Party said: "We will modernise copyright and other forms of protection of intellectual property rights so that they are appropriate for the digital age. We will use our presidency of the EU to look at how to ensure content creators can protect their innovations in a digital age. Piracy is a growing threat and we will work with industry to protect against it."

The BSA called on the UK government to use its presidency of the EU to implement a controversial copyright enforcement directive in this country and "set a standard to other members of the EU, many of which have an even higher piracy rate". The study estimates software piracy across the Europe, Middle East and Africa region as a whole is running at 39 per cent.

Mind your assets!

The BSA also wants to highlight the security risks of using pirated software and to promote good software asset management practices. "Software piracy hurts local businesses as well as the global software companies that have become household names," it adds.

The survey covered major software market segments including operating systems and consumer software. For its analysis, IDC drew upon its worldwide data for software and hardware shipments as well as conducted more than 7,000 interviews in 23 countries. ®

1 It's hard to say how many instances of pirated software represent actual lost sales at full retail price but the BSA neglects to address this point. There is a big difference between the "retail value of pirated software" and "sales lost to piracy" but it's a distinction the BSA has trouble grasping.

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