Pirates, ISPs hamper local software industry: BSA

By Fleur Doidge on Jul 8, 2004 12:00 AM
Filed under Software

A global anti-piracy lobby group has claimed that bringing down software piracy would boost local software development and that local ISPs should be roped into stopping online pirates.

Jeffrey Hardee, vice president and regional director at global anti-piracy lobby group Business Software Alliance (BSA), said a recent IDC study, sponsored by the BSA, had found higher piracy rates in poorer countries. Therefore, lowering piracy would boost software development.

Globally, software worth US$80 billion was installed in 2003, but only US$50 billion spent on commercial packaged software for PCs. BSA thus concluded that 36 percent of the software installed around the globe last year was pirated.

China was number one globally for pirated software, with a piracy rate of 92 percent. The United States was lowest with 22 percent.

"There is a correlation between the level of piracy and the contribution of the IT sector to the GDP of a country. So it pays countries to bring down the piracy level to promote their own software," Hardee said.

However, correlation does not in itself indicate cause-and-effect, as any undergraduate will tell you. It might also be noted that the study also recorded India -- a country with a large custom-developed software industry -- as having a high piracy rate of 73 percent.

Hardee also claimed that ISPs had been negligent in ignoring notices from software vendors alleging that their customers had been pirating software. ISPs, he said, should be working with software vendors to stop piracy.

"Internet piracy is growing, because bandwidth is increasing and internet use is increasing," he said. "We're sending out 3000 notices a month to the Asia-Pacific to ISPs about infringements."

The Free Trade Agreement between the USA and Australia could be harnessed to force ISPs to comply, he suggested.

However, he admitted that the BSA did not know if they were genuine infringements when it sent the notices.

"But there have been no instances where those ISPs have countersued because of false claims. We think the system works well," Hardee said.

Asked whether ISPs were likely to be in a financial position to countersue a major software vendor, Hardee remained silent.

The study, 'First Annual BSA and IDC Global Software Piracy Study', found that Australia's piracy rate of 31 percent was consistent with that in 2002. However, the loss to the economy from the piracy was almost three times higher, at $341 million.

Martin Kralik, senior Asia-Pacific research manager at IDC, said that loss related to operating systems accounted for $65 million while that related to new consumer categories took $20 million out of the IDC figure.

"That leaves about a third or $110 million of the 2003 losses unaccounted for," Kralik said.

IDC believed the difference related to differing estimations of the size of the PC software market in this year's and last year's studies. The larger market could also be accounted for by the higher estimates of locally-produced software or higher estimates of imported software from non-BSA members, he said.

"IDC's piracy rate and losses would imply it was looking at a paid for PC software market of $760 million; the previous study implied it was looking at a paid for market of $310 million," Kralik said. "IDC tracks the whole software market in Australia -- all platforms, not just PCs -- at $2.3 billion, so the PC market estimate is not unreasonable."

This year's study was not comparable with those sponsored by the BSA in the last nine years, because the methodology differed. This year, IDC used its own statistics for software and hardware shipments.

IDC also extended the study beyond business PC software to operating systems, consumer-oriented software and local-language software. The research firm conducted about 5600 interviews in 15 nations about the amount of software running on computers and local market conditions.