Global Piracy Rate Rises to 40 Percent

Lack of information coupled with vague laws could be largely responsible for the high global piracy rate. The Business Software Alliance (BSA) has found that software piracy has risen from 37 percent in 2000 to 40 percent worldwide in 2001, and data from GartnerG2 reveals that most Americans are unaware of the legalities of backing up software and prerecorded music CDs.

Robert Holleyman, president and CEO of the BSA believes education can help reduce the high piracy rate: “This study reinforces the need to continue working aggressively to educate consumers and law enforcement agencies around the world that piracy is theft — plain and simple — theft that is robbing the global economy of hundreds of thousands of jobs and billions of dollars in wages and tax revenues.”

Lost revenue due to piracy amounted to a total of $10.97 billion worldwide in 2001, although that figure represents a decrease of more than three-quarters of a billion dollars from 2000. The BSA attributes the decline to the effects of a worldwide economic slowdown.

Countries with the Highest Piracy Rates
Country 2000 2001
Vietnam 97% 94%
China 94% 92%
Indonesia 89% 88%
Ukraine/Other CIS 89% 87%
Russia 88% 87%
Pakistan 83% 83%
Lebanon 83% 79%
Qatar 81% 78%
Nicaragua 78% 78%
Bolivia 81% 77%
Source: The Business Software Alliance

The areas that were most negatively affected by software piracy were the Asian/Pacific region, which experienced an increase from $4.1 billion in 2000 to more than $4.7 billion in 2001 and accounted for almost half of the revenue losses worldwide, and the Eastern European region, which racked up the highest piracy rate of all the regions at 67 percent. Eastern Europe dollar losses increased from $404 million in 2000 to more than $434 million in 2001.

Western Europe had the second lowest piracy rate (37 percent), but it experienced the second highest dollar losses, totaling almost $2.7 billion, and accounting for nearly one-quarter of the total global losses due to software piracy. Latin America experienced a decline for the third consecutive year to 57 percent, which cost the country nearly $865 million. The Middle East and Africa experienced a decrease in its piracy rate from 55 percent in 2000 to 52 percent in 2001, costing this region nearly $284 million.

North America continued to be the region with the lowest piracy rate at 26 percent, although it increased slightly from 2000’s 25 percent. Despite a steady decline over the last seven years from 32 percent, the region accounted for the third highest piracy dollar losses, totaling $1.9 billion — down from $2.9 billion in 2000.

In Canada, the piracy rate remained the same at 38 percent, but the dollar losses due to software theft were more than $189 million, down from $304 million in 2000. The U.S. software piracy rate registered 25 percent, up one percentage point from 2000, which cost the nation $1.8 billion in retail sales of business software applications and more than 111,000 jobs.

U.S. States with the Most Improved Piracy Rates
State 2000 2001 Change
New Hampshire 33.5% 17.2% -16.3%
Maryland 34.3% 19.6% -14.7%
California 30.7% 18.5% -12.2%
Nebraska 33.1% 21.1% -11%
Utah 37.5% 27.6% -9.9%
Nevada 46.5% 38.3% -8.2%
Colorado 29.2% 24.8% -4.4%
New York 16.3% 11.9% -4.4%
Illinois 17.2% 13.0% -4.2%
Missouri 20.9% 18.6% -2.3%
Source: The Business Software Alliance

According to GartnerG2, 82 percent of U.S. consumers believe it is legal to back up software and prerecorded music CDs, 75 percent believe backing up video games is legal, and 73 percent believe making backup copies of prerecorded videotapes and DVDs is legal.

“The reality is that current laws are vague and content companies are pushing for strict control over consumer copying behavior,” said Mike McGuire, research director for GartnerG2. “Until laws are passed allowing consumers the right to back up files legally, the uncertainty about lack of basic archiving and backup capabilities will stunt growth of the online media distribution market for the next three to five years.”

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