The rate of software piracy worldwide held at 35 per cent in 2006, but rose slightly in Canada and elsewhere, offsetting gains by software makers, a new study suggests.
For every $2 of legitimately obtained software, one dollars worth was acquired illegally, according to the fourth annual global software piracy study released this week by the industry trade group the Business Software Alliance and international research firm IDC.
While the piracy rate fell in 62 per cent of 102 countries studied between 2005 through 2006, it rose in 13 countries, the study found.
But although the rate of global piracy remained stable during that period, the market grew, resulting in a $5 billion US increase in losses, a 15 per cent rise to $39 billion US over 2005, the analysis found.
Increase forecast
But piracy rates are set to rise as more people get computers and broadband internet access, the study found. There were 140 million new internet users in 2006, according to IDC, and 50 million households got high-speed internet connections — half of them in high-piracy countries.
By 2010, more than 250 million new internet users from Brazil, Russia, India and China, and 20 per cent of all households worldwide — more than 360 million — will have broadband internet access, IDC forecasts.
Combined with the rising popularity of peer-to-peer (P2P) filesharing networks, the figures dont bode well for the software industry, the study suggests.
Half of the countries examined for the 2006 report have piracy rates of 62 per cent or higher, and in nearly one-third of the nations, the rate is upwards of 75 per cent.
The study looked at packaged software that runs on personal computers, such as operating systems like Microsoft Corp.s Windows or Apples Mac OS, systems software like database and security programs, and business and consumer applications such as computer games, personal finance and reference software.
Software that runs on servers, mainframe computers or sold as a service were not included in the calculations, which employed proprietary data from vendors, users and distributors.
Narrow rise in piracy in Canada
In Canada, the piracy rate rose in 2006 to 34 per cent, up one percentage point over 2005 for total economic losses of $890 million ($784 million US), according to the Canadian Alliance Against Software Theft, which released the report in conjunction with the BSA.
Canada held its position near the bottom of the rankings for the 20 countries in the world with the lowest software piracy rates, coming in at No. 16 in 2006, according to the study.
Only the United Arab Emirates and South Africa at 35 per cent piracy rates, Ireland (36 per cent) and Singapore (39 per cent) fared worse among countries that pirated software the least. The three countries with the lowest piracy rates were the United States (21 per cent), New Zealand (22 per cent) and Japan (25 per cent).
"The fact that Canadas software piracy rate has remained more or less unchanged over the past few years indicates that a lot more work needs to be done before we can achieve rates found in countries that we usually compare ourselves to, such as the U.K. and Australia," Michael Murphy, president of CAAST, said.
Australia, with a rate of 29 per cent in 2006, came in at No. 13 on the list of the 20 countries with the lowest incidence of software piracy, while the U.K ranked No. 9 at 27 per cent.
By region, North America has the lowest rate of piracy worldwide, maintaining a stable rate of 22 per cent in 2006 as compared to 2005.
Worst offenders
The countries with the worst rates of piracy in 2006 were Armenia at 95 per cent, Moldova at 94 per cent and Azerbaijan at 94 per cent. They were followed closely by Zimbabwe (91 per cent) Vietnam (88 per cent) and Venezuela and Pakistan, which tied at 86 per cent piracy rates.
While China and Russia made significant gains in reducing their piracy rates, their clout in a growing market for computer use kept the global average constant.
Chinas piracy rate fell four percentage points to 82 per cent, preventing $864 million US in losses. The drop represents a 10-point decline since 2003. China was No. 17 on the studys list of worst offenders.
Russias rate fell to 80 per cent in 2006, down three points from the previous year, for an overall decline of seven percentage points since 2003. Russia was not among the 20 worst nations for software piracy.
In both countries, the improvements were largely attributed to government efforts to improve their own software use practices, enforcement, education and better industry practices.
Russias gains were also helped by a booming, oil-driven economy, resulting in more available discretionary personal income, the study said.
Central and Eastern Europe fared the worst in the study, with a piracy rate of 68 per cent in 2006 — a one-point improvement over 2005 — and was followed closely by Latin America at 66 per cent for a two-point reduction in piracy.
The Asia-Pacific region logged an overall 55 per cent piracy rate, down one per cent as compared to 2005.
Problem widespread, costly: security software company
North Americas position as the region of the world with the least piracy overall is nothing to brag about, according to industry professionals who spoke with CBC News Online.
"We dont want to tolerate any counterfeit software," Scott Minden, a director in the legal department of anti-virus and security software maker Symantec Corp. said. "This is a global problem."
The counterfeiting problem the Cupertino, Calif.-based company faced was so severe that it created its own special task force of lawyers, former police and other law enforcement investigators.
"When we first started looking into this in summer 2002, we were losing half a billion [dollars] a year worldwide [to piracy]," Cris Paden, a spokesman for Symantecs Brand Protection Task Force added, explaining that the sum includes estimates of lost revenue, legal, investigative and other associated costs.
"Weve got it down to about $40-to-$80 million … In a lot of cases we may or may not recoup our losses."
Other Key findings:
* Finland and Germany saw piracy increases of ½ a percent but losses still decreased. This is due to the markets being more established and investment being made in lower cost software more than high end programmes.
* Greece saw a piracy rate drops of 3%. This was due to legislative and enforcement action in both cases. New legislation has empowered the Greek Tax Police to require data on software assets
* Slight decreases in France, Italy and the Netherlands led to significant reductions in industry losses due to piracy - $515m, $161m and $177m respectively.
* Legislation and well-publicized criminal enforcement actions, including police or government official raids on businesses, have helped piracy rate drops in Czech Republic and Poland (1%) and a stable rate in Hungary - but losses increased in all cases due to fast market expansion.
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