Market value of pirated software rises, BSA report says

IDG News Service - Booming PC use in developing countries has driven the market value of pirated software to record levels, an annual IDC study for the Business Software Alliance (BSA) industry lobby group has claimed.

The percentage of pirated programs stood at 42% across the 116 countries looked at in the 2010 Piracy Study, a drop of 1 percentage point from the previous year's figures. But the market value of this pirated software, at $58.8 billion, rose 14% on 2009, the organization said, compared to the $95 billion spent on PC software globally. As in previous studies by the BSA, poor countries pirate more, rich countries markedly less.

Heading the piracy list were Georgia (93%), Zimbabwe (91%), Bangladesh and Moldova (both 90%), with long list of poor and developing nations not far behind with piracy levels of 80% or more. China, a common target for antipiracy complaints, registered 78%.

The lowest piracy rates were all in developed countries, headed by the U.S., Japan and Luxembourg (all on 20%), just ahead of a number of similarly rich countries, including New Zealand (22%), Australia (24%), and Germany and the U.K. (both 27%).

Although this division between developed and developing countries came as no surprise, it mattered hugely to the future of the software industry, the BSA said. Of the 1.4 billion PCs in the world, almost half now sit in developing economies with high piracy rates, which explained why the proportion of piracy carried out in emerging economies had grown from under a third to more than half in only six years.

"The market is being driven by emerging countries, which also have higher piracy rates," said Julian Swan, the BSA's EMEA compliance marketing director. "But it is the high-piracy countries that are now the engine of the software industry."

If allowed to carry on unchecked, the software industry would find itself relying on the base of legal software use in developed countries even as these countries accounted for a smaller and smaller proportion of the total PC market.

The most common reason for illegal software use in developing countries was the habit of buying a licensed copy of a software program and then installing it on multiple computers -- according to the BSA, 51% of decision makers in developing-world enterprises believed such a practice was legal.

The BSA report makes a number of suggestions for battling piracy, including offering governments in poor countries cheap, bulk licenses in order to set a good example, and persuading PC makers to pre-install licensed software before machines are purchased.

The BSA also commissioned a separate opinion survey of users in 32 countries, which uncovered what it said were widespread misconceptions about software licensing.