Four Out of Every Ten Software Programs Are Pirated

Worldwide Global Piracy Rate Increases to 40 Percent; Losses at Nearly $11 Billion; Report Released in Conjunction With International Software Piracy Sweeps Week

SAN JOSE, Calif., June 10 /PRNewswire/ -- Software piracy is on the rise around the globe -- growing from 37 percent in 2000 to 40 percent in 2001, according to the Business Software Alliance's (BSA) seventh annual benchmark survey on global software piracy.

"For the second year in a row, we have seen a rise in software piracy around the globe. This is an alarming trend despite our extensive efforts to enact laws and develop educational programs that promote a safe and legal online world," said Robert Holleyman, president and CEO of BSA.

"This study reinforces the need to continue working aggressively to educate consumers and law enforcement agencies around the world that piracy is theft -- plain and simple -- theft that is robbing the global economy of hundreds of thousands of jobs and billions of dollars in wages and tax revenues."

The independent study, released today, highlights the serious impact of unlicensed software use on economies in 85 countries. The worldwide dollar losses due to piracy dropped nearly one billion dollars from $11.75 billion in 2000 to $10.97 billion in 2001. The decline in dollar losses can be attributed to a decline in software prices and the effects of a worldwide economic slowdown. North America, Asia/Pacific and Western Europe once again accounted for the majority (85%) of revenue losses.

"In the seven years that we have conducted this study, this is the first time piracy has increased two years in a row. This is particularly disturbing in light of the fact that more and more software companies are moving their distribution systems to the Internet. BSA is committed to working with governments, companies and law enforcement agencies around the world to turn this trend around now," said Holleyman.

The release of the BSA Global Software Piracy Study coincides with the launch of BSA's second annual International Sweeps Week (http://www.bsa.org/sweeps ), where BSA will "sweep" around the globe, announcing a year-to-date tally of settlements in North America, Asia/Pacific, Latin America, and Europe/Middle East/Africa, highlighting the significance of the software piracy problem around the world. In the United States, BSA will announce an unprecedented 44 enforcement actions with U.S. companies, totaling nearly $3.1 million -- an increase over last year's announcement of 36 settlements at $2.5 million. Since the beginning of the year, BSA has recovered $5.8 million in U.S. settlements.

The 10 countries with the highest piracy rates are (in rank order):
Top 10 Countries by Piracy Rate
2000 2001
Vietnam 97% 94%
China 94% 92%
Indonesia 89% 88%
Ukraine/Other CIS 89% 87%
Russia 88% 87%
Pakistan 83% 83%
Lebanon 83% 79%
Qatar 81% 78%
Nicaragua 78% 78%
Bolivia 81% 77%

Regional Summaries -
Asia/Pacific: Several countries in Asia/Pacific experienced piracy rate increases in 2001. The rates in Malaysia and India increased to 70% and the rate in the Philippines increased to 63%. Most other countries showed small rate changes: Indonesia's rate decreased one percentage point from 89% to 88%. Japan's rate remained at 37%, while Australia's rate decreased from 33% in 2000 to 27%. New Zealand continued to be the country with the lowest piracy rate in the region at 26%, and Vietnam remained the country with the highest piracy rate in the world at 94%. The regional dollar losses increased from $4.1 billion in 2000 to more than $4.7 billion in 2001 accounting for almost half of the revenue losses worldwide.

Eastern Europe: At 67%, this region had the highest piracy rate of all the regions, with an increase in dollar losses from $404 million in 2000 to more than $434 million in 2001. Russia and the Ukraine/Other CIS countries continued to have the highest piracy rates in Eastern Europe, both at 87%. Poland, the third largest country in the region, reduced its piracy rate from 54% to 53%. The Czech Republic continued to have the lowest piracy rate in the region at 43%.

Western Europe: At 37%, Western Europe continued to be the region with the second lowest piracy rate, but it experienced the second highest dollar losses, totaling nearly $2.7 billion, accounting for 24% of the total global losses due to software piracy. The largest dollar losses occurred in Germany ($681 million), Italy ($468 million) and France ($527 million).

The highest piracy rates were in Greece (64%), Spain (49%) and France (46%).

Latin America: For the third consecutive year, Latin America continues to see a decline in its piracy rate, now at 57%. Software piracy in Latin America cost nearly $865 million. The countries with the highest piracy rates were Nicaragua (78%), Bolivia (77%), El Salvador and Guatemala (both at 73%). Brazil and Mexico, the two largest economies in the region, saw a decline in their piracy rates to 56% and 55%, respectively. The piracy rate in Argentina, the third largest economy in the region, increased to 62%.

Middle East & Africa: This region experienced a decrease in its piracy rate from 55% in 2000 to 52% in 2001. The three largest economies in the Middle East -- Turkey, Israel, and Saudi Arabia -- each saw a decrease in the piracy rate in 2001, with Turkey's rate decreasing from 63% in 2000 to 58% in 2001. Israel is the country with the lowest piracy rate at 40%.

Software piracy cost this region nearly $284 million. Africa saw a small increase in piracy, from 52% in 2000 to 53% in 2001. South Africa, the largest economy in the region, had the lowest rate in the region, at 38%.

Kenya and Nigeria were the two countries in the region with the highest piracy rate, at 77% and 71% respectively.

North America: North America continued to be the region with the lowest piracy rate at 26%, up one percentage point from 25% in 2000. Over the past seven years, the region's piracy rate has declined from 32% to 26%.

Yet, North America accounted for the third highest piracy dollar losses, totaling $1.9 billion, down from $2.9 billion in 2000. In 2001, the piracy rate in the United States increased one percentage point to 25%. Total losses due to software piracy in the United States were more than $1.8 billion, down from $2.6 billion in 2000. The decline from 2000 to 2001 is the result of several factors including: the U.S. dollar was strong in 2001 relative to local currencies, and software prices as reported in U.S. dollars continued to fall, advancing a trend of declining prices that has evolved over the last decade. In Canada, the piracy rate remained the same at 38%, but the dollar losses due to software theft were more than $189 million, down from $304 million in 2000.

BSA, an industry watchdog group representing the world's leading software manufacturers, commissioned International Planning and Research Corporation (IPR), an independent research firm to conduct the survey for BSA. The study evaluated sales data and market information for six major world regions and examined 26 business software applications. The study is based on the reconciliation of two sets of data, the demand for new software applications and the legal supply of new software applications. The data are derived from two primary sources: software shipment data supplied by BSA member companies, and market data provided by MetaFacts, Inc., a technology market research firm.

The Business Software Alliance is the foremost organization dedicated to promoting a safe and legal online world. The BSA is the voice of the world's software and Internet industry before governments and with consumers in the international marketplace. Its members represent the fastest growing industry in the world. BSA educates computer users on software copyrights and cyber security; advocates public policy that fosters innovation and expands trade opportunities; and fights software piracy. BSA members include Adobe, Apple Computer, Autodesk, Bentley Systems, Borland, CNC Software/Mastercam, Macromedia, Microsoft, Network Associates, Symantec and Unigraphics Solutions (EDS).

www.bsa.org

 

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