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Study Finds Software Piracy Falling in Many Countries

But challenge now shifts to emerging, high-growth markets.

Big Picture

Piracy of software on personal computers declined in many countries in 2007, but numbers worsened in fast-growing PC markets in some of the world’s highest piracy nations, reports the Business Software Alliance (BSA). As a result, overall numbers worsened worldwide and dollar losses from piracy rose by $8 billion to nearly $48 billion.

Of the 108 countries included in the BSA's recent report on software piracy, the use of pirated software dropped in 67, and rose in only eight. But because the worldwide PC market grew fastest in high-piracy countries, the worldwide PC software-piracy rate increased by three percentage points, to 38% in 2007.

"We are making much-needed progress in the battle against PC software piracy, and that’s good news..." says BSA president and CEO Robert Holleyman. "The battleground is now shifting, however, to emerging markets where many of our collective challenges remain."

The study’s key findings:

* 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%).

* Among the nations studied, Russia led the way 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 it's decreasing at a fast pace as a result of legalization programs, government engagement and enforcement, user education, and an improved economy.

* Piracy rates dropped slightly in many low-piracy markets where rates have been stagnant for several years, including the United States (-1%), United Kingdom (-1%), and Austria (-1%). Many other developed economies experienced a continuing gradual decline, including Australia, Belgium, Ireland, Japan, Singapore, South Africa, Sweden, and Taiwan.

* Market factors contributing to increasing piracy rates include: (1) dynamics in the PC market where the fastest growth is in the consumer and small business sectors; these are the hardest sectors in which to lower piracy; and (2) expanded Internet and broadband access. With approximately 700 million people expected to go online for the first time between 2008-2012, 76% of them will be in emerging markets. Access to pirated software will continue to shift from the streets to the Internet.

* Market factors contributing to decreasing piracy rates include: (1) increasing globalization among countries in emerging markets; (2) technologies such as technical protection measures like digital rights management (DRM), which software developers are building directly into their products; (3) new software distribution models such as software-as-a-service.


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