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Worldwide survey: 36% of software pirated
(Agencies)
Updated: 2004-07-08 21:36

O&O Software, with only 28 employees, has built a $3 million-a-year business developing award-winning utilities for personal computers.

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How much bigger it might be without the plague of software piracy is impossible to say, but it's clear sales are being lost.

"We even have customers who try to register" pirated copies, spokesman Frank Alperstaedt said. "Sometimes they know they're illegal, sometimes not."


Sellers pause to eat near a display of pirated DVDs outside the Brasilia's hugely popular 'Paraguay market' where shoppers can pick up contraband goods ranging from CDs and DVDs to whisky duty-free prices, in Brasilia, July 2, 2004. [Reuters]
Berlin-based O&O Software is one of dozens of global high-tech companies, including giants like Microsoft Corp., IBM Corp. and Apple Computer Inc., renewing a fight against piracy by highlighting costs to government and society alongside their own losses.

An industry study, released Wednesday, said more than a third of computer software installed worldwide last year was counterfeit or pirated, which it said cost software companies $29 billion.

The piracy rate was lowest — 23 percent — in North America, where losses were more than $7.2 billion. That was about the same as in the Asia-Pacific region, $7.6 billion, although the piracy rate there was higher at 53 percent, reflecting smaller sales.

Piracy was most expensive in the European Union, where a 37 percent rate cost software publishers nearly $10 billion, according to the survey conducted by the U.S.-based market research firm IDC for the Business Software Alliance.


A vendor sells pirated DVDs to a customer at a restaurant in Beijing May 15, 2004. Hollywood films rule China's pirated DVD market, where piracy makes the latest blockbusters available for about a dollar. [Reuters]

Year-on-year comparisons were unavailable because the Washington-based industry alliance broadened its 2003 survey to include software on servers and personal computers. Earlier surveys looked only at business software.

IDC compared software sales in 86 countries with estimates of software in use and took the difference to be the pirated amount, calculating losses based on prices for those copies.

Critics say such figures are exaggerated because those with pirated copies might not have actually gone out and paid full price for the software. They also argue that users can get hooked enough on an illegal copy to later buy upgrades they might never have otherwise.

But the Business Software Alliance says its survey was conducted independently using scientifically based methods.


Indifferent to threats of penalties on the country's exports, thousands of stores across Pakistan are packed with pirated cinema and music releases as well as popular computer programs. [AFP]
In addition, the biggest form of piracy occurs when a company with 200 desktops, for example, buys licenses to install software legally on only 10 of them. "Clearly that's lost opportunity there," BSA spokeswoman Diane Smiroldo said.

While software piracy is not new, industry groups say it is worsening because of faster Internet distribution, inadequate legislation and lax enforcement.

The Business Software Alliance said a 10 percent reduction in software piracy across Europe could bring more than 250,000 new jobs and $23 billion in tax revenues by 2006.

Dominique Pouliquen, chief executive of the French 3D graphics developer Realviz, said reduced piracy would generate additional funds for research and development.

The industry's Asian unit was sending 3,000 letters of complaint to Internet service providers whose equipment it accuses of enabling file-swapping services.

The alliance plans to continue lobbying governments and educating consumers, but will consider legal action, said Jeffrey Hardee, the alliance's Asian regional director.

"We think that enforcement is an important part of our work," Hardee said. "But ultimately we are trying to change people's opinions, and we don't only want to be known for enforcement."



 
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