Software Piracy

Software/Digital Content piracy not only drains the resources and revenues of providers, it adversely effects our economy as a whole. Below, we have reproduced piracy comments from selected software/digital content providers or associations.

Business Software Alliance (BSA)

“Software is one of the most valuable technologies of the Information Age, running everything from PCs to the Internet. Unfortunately, because software is so valuable, and because computers make it easy to create an exact copy of a program in seconds, software piracy is widespread. From individual computer users to professionals who deal wholesale in stolen software, piracy exists in homes, schools, businesses and government. Software pirates not only steal from the companies that make the software, but with less money for research and development of new software, all users are hurt. That's why all software piracy — even one copy you make for a friend — is illegal.

As the number of PCs and Internet use grow, the incidence of software piracy is growing, too. The Business Software Alliance believes new technologies should enhance ways to access and distribute copyrighted works legally, not illegally.”

Microsoft

“Pirated software hurts everyone—from software developers to retail store owners, and ultimately to all software users. The illegal duplication and distribution of software has a significant impact on the economy, costing the United States billions of dollars a year in job losses, retail dollar losses, and governmental tax losses—money that would have gone back into local communities. In addition, companies facing loss of revenue due to piracy must pull resources from the development of new technology, and devote it to protecting both their software, and its legitimate users. In the end, software piracy is unfair to everyone.”

AutoDesk

"As the world's fifth-largest PC software company, Autodesk is reminded of this problem daily. If not for piracy, Autodesk's revenues would be at least twice what they are currently. The ripple effect goes far beyond the software industry, impacting jobs, tax revenues and the economy of every country that creates and markets software."

Symantec

“Every year, billions of dollars are lost to software piracy, which is the illegal distribution and/or copying of software for personal and/or business use. In 1996, the total losses sustained by the software industry as a direct result of software piracy were in excess of fifteen billion dollars worldwide.

That's a lot of software.

What many people fail to realize is that the harmful effects of software piracy reach far beyond the software publisher. While folks like us certainly feel the crunch because of software pirates, the ultimate victim in this crime is the consumer. Pirating software is stealing, and that makes prices go up. The more revenue that's lost because of stolen goods, the less that can be spent on research and development of new products and new innovations.”

Adobe

“Piracy hurts everyone: purchasers, manufacturers, employees, and many others.

Illegal distribution of software affects the worldwide economy. With an estimated 36% piracy rate globally, the economic effects are significant. In 2001, according to the Business Software Alliance , piracy cost the global economy over US$13 billion dollars in lost tax revenues that would benefit local communities. Hundreds of thousands of jobs in software and related industries were also lost.

Software piracy stifles innovation. The cost of combating software piracy, plus lost revenues, could be spent on research and development to benefit users.”

Recording Industry Association of America (RIAA)

“Old as the Barbary Coast, New as the Internet - No black flags with skull and crossbones, no cutlasses, cannons, or daggers identify today's pirates. You can't see them coming; there's no warning shot across your bow. Yet rest assured the pirates are out there because today there is plenty of gold (and platinum and diamonds) to be had. Today's pirates operate not on the high seas but on the Internet, in illegal CD factories, distribution centers, and on the street. The pirate's credo is still the same--why pay for it when it's so easy to steal? The credo is as wrong as it ever was. Stealing is still illegal, unethical, and all too frequent in today's digital age. That is why RIAA continues to fight music piracy.”

Piracy Study - courtesy of SIIA (Software & Information Industry Association)

NOTE: These statistics include business software only and do not reflect consumer piracy.

Five Years: $59.2 Billion Lost
Software Industry Suffers From Cumulative Impact of Global Software Piracy; Publisher Losses Total $12.2 Billion in 1999

( Washington , D.C. ) - Results of the fifth annual benchmark survey on global software piracy were released today, highlighting the serious impact of copyright infringement to the software industry. Piracy losses exceeded $12 billion worldwide in 1999 and topped $59 billion during the past five years. The survey, conducted by an independent research firm, was commissioned by the Software & Information Industry Association (SIIA) and the Business Software Alliance (BSA). The 1999 software piracy estimates indicate that more than one in every three business software applications in use during 1999 was pirated. Piracy losses for the U.S. and Canada lead every other region of the world at $3.6 billion, or 26% of the total. The continuing problem means lost jobs, wages, tax revenues, and a potential barrier to success for software start-ups around the globe.

"Too many U.S. and Canadian businesses are getting a free ride on pirated software," said Ken Wasch, president of the Software & Information Industry Association. "Businesses continue to communicate, conduct commerce and manage their operations with pirated software, stealing revenue from software publishers. Software has forever changed the way business gets done, enabling participation in the digital economy. Business owners that fail to respect copyright law and pay for software should be prepared to incur fines that could have a significant impact on their bottom-line." "Software piracy continues unabated, robbing the industry of thousands of jobs, billions in wages, tax revenues and critical investments in new technologies," according to Robert Holleyman, president and CEO, Business Software Alliance. "No industry would or should tolerate such a high rate of theft. The explosive growth of the Internet is making piracy even more prevalent, since pirated copies of software can be distributed and downloaded quickly and globally, with the click of a mouse. Faced with this threat, BSA has stepped up its education and enforcement efforts, while also asking governments worldwide to show leadership in tackling this very serious, growing problem," concluded Holleyman.

Global Overview
Revenue losses to the global software industry due to piracy were estimated at $12 billion. North America, Asia, and Western Europe accounted for the vast majority (83%) of revenue losses. These regions are the predominant users of software, leading to the most prevalent losses.

The ten countries with the highest dollar losses due to software piracy are (in rank order): the United States , Japan , UK , Germany , China , France , Canada , Italy , Brazil , and the Netherlands . Total losses for the top ten countries were $8.4 billion, or 70% of worldwide losses. In terms of piracy rates, the study estimates that more than eight in ten business software applications are pirated in 19 countries including Vietnam , China , and Russia .

Regional Summaries -- Asia/Pacific, Eastern Europe, Western Europe, Latin America, Middle East & Africa, and North America

Asia/Pacific
Software piracy in the Asia/Pacific region cost software publishers $2.8 billion in 1999, led by a $975 million revenue loss in Japan . Piracy in this region has accounted for more than $17 billion in losses during the last five years. Countries with the highest piracy rates were Vietnam (98%), China (91%), and Indonesia (85%). Countries with the highest dollar losses were Japan , China ($645 million), and India ($214 million).

Eastern Europe
Although dollar losses in Eastern Europe seem relatively low compared to other regions ($505 million in 1999), the region continues to have the highest average piracy rate at 70%. Countries with the highest piracy rates were the CIS - less Russia (90%) and Russia (89%). Countries with the highest dollar losses in Eastern Europe were Poland and Russia (both at $165 million).

Western Europe
Western Europe had the dubious distinction in 1999 of nearly eclipsing North America as the leader in software piracy revenue losses as five of the ten highest-loss countries are located here. Western Europe accounted for losses of $3.6 billion, just two million dollars less than North America . The five-year cost of software piracy in Western Europe cost publishers more than $15 billion in lost revenue. The largest dollar losses to software piracy in 1999 occurred in the United Kingdom ($680 million), France ($652 million) and Germany ($548 million). For the second consecutive year, the highest piracy rates were in Greece (71%), Spain (53%), and Ireland (51%).

Latin America
Latin American countries with the largest revenue losses in 1999 include Brazil ($392 million), Argentina ($192 million), and Mexico ($134 million). Combined, these three countries represent 64% of the region's dollar losses. While the overall piracy rate in Latin America declined slightly to 59%, the total losses climbed eight percent to $1.1 billion. The countries with the highest piracy rates were Bolivia (85%), followed by El Salvador and Paraguay (each with 83%).

Middle East & Africa
At 60%, this region had the second highest regional piracy rate in the world. South Africa , Israel , and Turkey represent 53% ($255 million) of the total dollar losses in the region. The countries with the highest rate of software piracy in the region were Lebanon (88%), Oman (88%), and Bahrain (82%).

North America
Historically, the combined U.S. and Canadian software markets have registered the lowest rate of software piracy for any region of the world. The North American piracy rate has steadily declined from 32% to 25% over the past five years. Due to the size of its software market, however, North America still accounts for the largest piracy losses to software publishers. In 1999, those losses exceeded $3.6 billion. During the past five years, North American software piracy has totaled almost $16 billion. In 1999, the U.S. had a piracy rate holding steady at 25% and the piracy rate in Canada rose one percent to 41%.

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Jointly commissioned by BSA and SIIA, this study -- like the first four -- was conducted by International Planning & Research (IPR). The IPR study evaluated sales data and market information for 85 countries in the six major world regions, and was based on 26 different business applications. The study released today compares 1999 piracy rates to losses in 1998, 1997, and 1996. The complete text - including charts, graphs and methodology - of the 1999 software piracy estimates can be accessed at www.bsa.org or www.siia.net/piracy or by calling the contacts listed above.

The Software & Information Industry Association (SIIA) is the principal trade association of the software code and information content industry. SIIA represents leading high-tech companies that develop and market software and electronic content for business, education, consumers and the Internet. Hundreds of these companies look to SPA Anti-Piracy, a division of SIIA, to protect their intellectual property rights around the world. Visit the SPA Anti-Piracy homepage at http://www.siia.net/piracy/default.asp. Cases of software piracy should be reported via the Anti-Piracy Hotline (800) 388-7478.

Since 1988, the Business Software Alliance (BSA) has been the voice of the world's leading software developers before governments and with consumers in the international marketplace. Its members represent the fastest growing industry in the world. BSA educates computer users on software copyrights; advocates public policy that fosters innovation and expands trade opportunities; and fights software piracy. BSA members include Adobe, Apple Computer, Autodesk, Bentley Systems, CNC Software/Mastercam, Compaq, Corel Corporation, IBM, Intel, Intuit, Lotus Development, Macromedia, Microsoft, Network Associates, Novell, Sybase, Symantec and Walker Digital. BSA websites: www.bsa.org; www.bsa.nopiracy. U.S. Anti-piracy hotline: 1-888-NO PIRACY.
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Software piracy is a significant drain on the resources of one of America 's most competitive industries. Few other industries lose as much revenue to theft. In the U.S. alone, an estimated $2.9 billion in revenue was lost to piracy of business applications software during 1999. Worldwide, the loss was estimated at $12.2 billion, or 4 out of every 10 copies being pirated. Though the dollar value of lost revenues has decreased since 1999, it is merely due to the decreased price of software in all market segments rather than a reduction in software piracy. The amount of pirated software in use has actually increased. With the advent of the Internet, the problem has become even more widespread because new types of piracy are now possible.

In addition to the business piracy rates and statistics listed above, consumer piracy estimates range up to $20 billion. The most pervasive form of piracy is the unauthorized copying of personal computer software for use in the office or at home (i.e. sharing software among friends).

Types of software piracy include:

Softlifting: purchasing a single licensed copy of software and loading it on several computers, contrary to the license. This includes sharing software with friends, co-workers, and others.

Internet piracy: unlawfully transmitting software, or providing infringing material that enables users to violate copyright protection mechanisms in software (such as serial numbers and cracker utilities) over one of the Internet's components.

Software counterfeiting: illegally duplicating and selling copyrighted software that is designed to appear legitimate.

Hard disk loading: loading unauthorized copies of software onto the hard disks of personal computers at the computer dealership, often as an incentive for the end user to buy the hardware from that dealer.

Renting: renting software for temporary use, in the manner of a videotape.

OEM/unbundling: selling standalone software that was intended to be sold packaged with specific accompanying hardware.

Software theft presents a unique problem for the industry because software is easy to duplicate and copies function identically to the original. Unlike other products such as audio and videotapes, there is not any degeneration in quality from copy to copy. The copying process is also effortless and inexpensive. Any PC user can quickly copy a program that took years and millions of dollars to develop. For little or no cost, the user can obtain a product that may be worth anywhere from $20 to $20,000.

Software Piracy Leads to Higher Prices and Less Innovation
Software piracy harms all software companies, and ultimately the end user, by leading to higher prices. It also ultimately curtails the industry's competitiveness; if software was not stolen so frequently, publishers could recover their development costs more quickly and go on to fund new development efforts, creating even better software. The problem has a ripple effect on everyone, from distributor and retailer to end user.

Software Piracy Hurts Consumers
Consumers may be tempted to copy software for free, or to buy cheap, illegal software, believing that they are getting a good deal. However, as the old saying goes, “you get what you pay for”. If the software is not from an authorized source, the end user will not get technical support, warranties, or upgrades from the software publisher. Furthermore, the risks of computer viruses, non-functioning software, and incompatible software and hardware increase dramatically.