Paying the Price for Software Piracy

Losses to the worldwide software industry caused by the use of unlicensed software amounted to $10.97 billion in 2001, down from $11.75 billion in 2000, according to a report released Monday by antipiracy organization Business Software Alliance.

The BSA study of software piracy estimates the use of unlicensed software in 85 countries by comparing the amount of legal software supplied to a country with the anticipated demand for software in that country. The difference between the two figures represents the number of unlicensed applications, and multiplying that figure by the average price of business applications gives the estimated dollar loss.

Although the estimated worldwide dollar loss fell by 6.7 percent in 2001, the use of unlicensed software worldwide grew from a rate of 37 percent in 2000 to 40 percent in 2001, meaning that four out of every 10 programs used worldwide are unlicensed, BSA says in the study.

The fall in the estimated dollar loss reflected a strong U.S. dollar, decline in software prices, and the effects of a worldwide economic slowdown, according to BSA.

Around the World

Asia-Pacific accounted for the largest share of the losses at $4.7 billion, representing an unlicensed use rate of 54 percent. Asia contains countries with very high unlicensed use rates such as Vietnam (94 percent), China (92 percent), and Indonesia (88 percent). But New Zealand has one of the lowest rates in the world at 26 percent, and Australia's rate fell from 33 percent to 27 percent during the year.

After a steady decline from 1994 to 1999, the unlicensed use rate has grown over both the last two years in the Asia-Pacific region, BSA said.

Losses in Western Europe amounted to $2.7 billion, with an unlicensed use rate of 37 percent. The highest piracy rates were in Greece (64 percent), Spain (49 percent), and France (46 percent) while dollar losses were biggest in Germany, France, and Italy, according to the study.

North America has the lowest unlicensed use rate at 26 percent, with total losses estimated at $1.9 billion in 2001. Eastern Europe, Latin America, and Middle East/Africa all had unlicensed use rates of over 50 percent, according to the BSA study. Eastern Europe's rate of 67 percent is the highest of all the regions, BSA says.

According to Robert Holleyman, BSA president and chief executive officer, software piracy robs the global economy of hundreds of thousands of jobs and billions of dollars in wages and tax revenues.

BSA is a consortium of software vendors. BSA worldwide members include Adobe Systems, Apple Computer, Autodesk, Bentley Systems, Macromedia, Microsoft, and Symantec. International Planning and Research carried out the study on behalf of the BSA.