Global piracy cost £15bn in 2003

Piracy continues to be a costly global problem for software makers, with $1 in every $3 spent on applications and programs going...

Piracy continues to be a costly global problem for software makers, with $1 in every $3 spent on applications and programs going to illegal sources, according to a revamped study from the Business Software Alliance (BSA).

The study, conducted for the BSA by market research company IDC, found that 36% of all software bought in 2003 had been pirated, costing software suppliers worldwide losses of $29bn (£15bn). Of the $80bn in software installed on computers worldwide last year, only $51bn was legally purchased, according to the group.

In the US alone, the piracy rate was 22% - the lowest among the nations surveyed. By contrast, the highest piracy rates in the world are in Vietnam and China, where piracy stood at 92% last year, according to the study.

Although it had the lowest piracy rates in the world, the financial hit in the US was the highest, costing the industry $6.5bn in revenues. Hong Kong had the smallest losses from piracy, totalling $102m.

By continent, the piracy rate in the Asia/Pacific region was 53%, with dollar losses totalling more than $7.5bn. In Eastern Europe, the piracy rate was 71%, with dollar losses at more than $2.1bn. In Western Europe, the rate was 36%, and dollar losses totalled $9.6bn.

In Latin American countries, the average piracy rate was 63%, with losses totalling nearly $1.3bn. And in Middle Eastern and African countries, the piracy rate was an average of 56%, with losses totalling more than $1bn.

BSA said the methodology of its new study has been revised from past years, when the organisation looked only at business desktop software. The study by IDC includes new categories of software such as operating systems, games and other consumer-oriented programs as well as local-language applications around the world.

In the past, the study results focused on shipment data from software and hardware manufacturers, according to the group. The new study uses proprietary IDC data for those shipments, as well as more than 5,600 interviews in 15 countries designed to better analyse the problem and to offer a more extensive picture of the problem.

The changes in how the latest study was done mean past totals cannot be directly compared for analysis. But they will lead to improved tracking and analysis in the future, said Bob Kruger, vice-president of enforcement at the BSA. The study answers critics who complained that old BSA studies only looked at business desktop software piracy, he said.

"I think it underscores what we've been saying for a long time, that this is a huge problem and it needs attention" from manufacturers and governments around the world, Kruger said. "It adds some credence to our arguments over the years that everybody loses from piracy."

Todd R Weiss writes for Computerworld

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