Piracy down just 1%, losses double at $1.27b

Bangalore: Software piracy in India has decreased a meager one percent to 71 percent in 2006 compared to the previous year. However, the losses due to the phenomenon more than doubled to $1.27 billion in 2006 from $566 million in 2005, according to the study by Business Software Alliance and IDC.

The reason for this huge rise in losses due to software piracy in spite of reduction in piracy rate is because of, "a growing market- there was a 25 percent growth in PC shipments in 2005 to 5.5 million in 2006; as economies grow, software value changes and further increases and sales of product upgrades have increased in the country," Jeffrey Hardee, VP and Regional director, BSA told Economic Times, a business daily.

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He said that the main issue was respect for intellectual property rights and not just price. Some of his suggestions on way to reduce piracy were copyright legislation, active educational programmes and enforcement.

According to the fourth annual global PC software piracy study by BSA and IDC , 35 percent of software installed in 2006 on personal computers (PC) worldwide was obtained illegally, amounting to nearly $40 billion in global losses due to software piracy.

This was up from $35 billion in 2005 with a same piracy rate 35 percent. On the other hand, some geographies saw increases in losses, the Asia Pacific region posted the highest increase by 44 percent to $11.6 billion up from $8.05 billion the previous year. The European Union saw losses come down to $11 billion from $2.04 billion, Western Europe's losses dipped from $11.82 billion to $10.63 billion, while Latin America saw software losses increase to $3.12 billion from $2.02 billion, Middle East Africa increased from $1.61 billion to $1.99 billion and North America saw losses rise from $3.09 billion to $4.12 billion in 2006.

Progress was seen in a number of emerging markets. Most notably in China, where the piracy rate dropped 10 percentage points in last three years and in Russia, where the piracy fell seven percentage points over three years. Compared to these markets, India saw piracy rate go up marginally to 74 percent in 2004 and has in the last two years decreased by a combined three percentage.