Software Piracy Costs $50 Billion a Year

Software piracy costs $50 billion a year, according to BSA

A report released Tuesday claims that 20 percent of PC software within the United States is pirated – and that that rate is still the lowest in the world.
The sixth revision of a joint study between the Business Software Alliance and IDC found that that Armenia, Bangladesh, Georgia, and Zimbabwe are the countries with the highest amounts of piracy, topping 90 percent. Worldwide, the rate of software piracy rose from 38 percent to 41 percent, because of the increase of Internet users in high-piracy locations such as China and India, the report found. Software piracy within the U.S., meanwhile, has remained flat. Setting the effects of exchange rates aside, the report found that the estimated losses from software piracy grew by 5 percent to $50.2 billion.

In 2005, however, The Economist published a critique of the BSA/IDC methodology, concluding that the study’s results were exaggerated. BSA and IDC representatives were not immediately available for comment.

The report comes against a backdrop of widespread crackdowns on sites that have used the BitTorrent protocol to disseminate software, movies, and music. Both Sweden’s The Pirate Bay and The Netherlands’ Mininova are facing down prosecutors intent on shutting both sites down; the operators of The Pirate Bay were found guilty of infringement, but said they would appeal.

In 2008, the rate of PC software piracy dropped in 57 countries, remained the same in 36, and rose in the remaining 17, the study found. Lowering global piracy by just one point a year would add $20 billion in stimulus to the IT industry, the BSA claims.

“We are continuing to make progress against PC software piracy in many countries, which helps people working in the US-led global software industry. That’s the good news,” said BSA president and chief executive Robert Holleyman, in a statement.

“The bad news is that PC software piracy remains so prevalent in the United States and all over the world,” Holleyman said. “It undermines local IT service firms, gives illegal software users an unfair advantage in business, and spreads security risks. We should not and cannot tolerate a $9 billion hit on the software industry at a time of economic stress.”

The regions of the world with the least piracy include both North America and the European Union; the countries with the lowest piracy as measured by the study include the United States, Japan, New Zealand, and Luxembourg, all near 20 percent.