Analysts: Software piracy may have peaked

Australian installations of unlicensed software fell slightly last year as vendors cut prices and laptop sales increased, market research firm IDC has found.

In 2009, one in four Australian software installations were found to be unlicensed, amounting to a commercial value of US$550 million (A$610 million).

The piracy rate was one percent lower than in 2008, and significantly lower than a global rate of 43 percent, according IDC's seventh annual software piracy study that was released today.

IDC attributed the high global piracy rate to "fast growing, higher piracy markets" such as China, India and Brazil. Of the 111 countries studied, IDC found the rate of piracy to fall in 54 economies and rise in only 19.

"In last year's study, IDC posited that the global PC piracy rate had a year or two more to rise before it would peak and begin to show sustained decreases," analysts wrote.

"The recession may have accelerated that crossover ... Piracy in emerging markets dropped by slightly more than one percent. If that pace is sustained next year, it is possible that global piracy will have peaked in 2009."

IDC attributed the decrease in piracy to vendor promotions sparked by the financial crisis, which attracted consumers from white box manufacturers to PC brands, and an increase in laptop sales, which tended to come with more licensed software installed.

Government and industry education campaigns, enforcement actions, and the use of digital rights management (DRM) and software asset management (SAM) were also credited for the decrease in piracy.

IDC analyst Victor Lim told iTnews that indirectly, piracy could be costing the global economy billions.

He acknowledged that the US$550 million (A$610 m) cost estimate of unlicensed software could not be converted directly into a loss, since software pirates may not necessarily purchase a licensed product should an illegal option not exist.

However, there would be wide economic benefits to eradicating piracy, he said, potentially resulting in cheaper software for consumers.

IDC in 2008 found that lowering the software piracy rate in Australia by ten percent over four years would create 3,900 new jobs, US$400 million (A$447 million) in tax revenues and US$1.9 million (A$2.1 million) economic growth.

During the past four years of the study, Australia's piracy rate dropped four percent, falling consistently from 29 percent in 2006 to 28, 26 and 25 percent.

In 2009, it recorded the fifth lowest national software piracy rate in the world, after the United States (20 percent), Japan (21 percent), Luxembourg (21 percent) and New Zealand (22 percent).

The study (pdf) was conducted in collaboration with anti-piracy organisation Business Software Alliance, which maintains a hotline and website for "informants" to blow the whistle on the use of pirated software in businesses.