BSA: Global software piracy losses rose 15% to $40B in 2006

While progress is seen in some nations, challenges remain

In the fight against global software piracy, the Business Software Alliance (BSA) found signs of progress last year: Piracy rates dropped in 62 of the 102 countries surveyed by the industry group.

But there's bad news, too: Overall dollar losses from pirated software increased by 15%, or about $5 billion, to total $40 billion worldwide in 2006, according to the group.

In an announcement today, the Washington-based group said its fourth annual study, which covers 2006, found that an average of 35% of the software installed on personal computers globally was not bought legally.

That rate, which has been the same for the past three years, is unacceptable, said BSA President and CEO Robert Holleyman. Around the world, for every $2 spent on legal software, another $1 is spent to buy pirated, illegal software, the BSA said.

"It's a good news, bad news story," Holleyman said. "But once you parse it, you can find positive signs in individual nations. On the whole, we are seeing progress."

The 19-page study (download PDF) was conducted for BSA by Framingham, Mass.-based IDC.

Some bright spots in the 2006 data include China, where the piracy rate has declined another 4%, to 82%, which Holleyman said is still too high but shows real progress. That decline means that over the past three years, the piracy rate in China has dropped 10% -- a notable change. "That means that last year the legitimate software business there totaled $1.2 billion," which is directly attributable to the decline in piracy, he said.

By lowering the amount of pirated software sold, legitimate vendors are able to get revenue for the sale of their products, he said. "We hope that we will see further progress as we work together with governments on this," Holleyman said.

In the U.S., the piracy rate remains at 21%, the same as it was in 2004. But even though the rate has remained flat, the losses from pirated software jumped in the U.S. in 2006 to $7.3 billion, up from $6.9 billion in 2005, according to the study. "It is a persistent challenge," Holleyman said. "We are increasing the call to do more in the U.S."

According to the study, the five countries with the highest piracy rates are Armenia (95%), Moldova (94%), Azerbaijan (94%), Zimbabwe (91%) and Vietnam (88%). The lowest piracy rates are seen in the U.S. (21%), New Zealand (22%), Japan (25%) and Denmark (25%). Austria, Switzerland and Sweden are all tied at 26%.

Copyright © 2007 IDG Communications, Inc.

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