BSA Unveils 2000 Global Software Piracy Study.

Business Editors/Hi-Tech Writers

WASHINGTON--(BUSINESS WIRE)--May 21, 2001

Average Global Piracy Rate Increases to 37 Percent; Losses At

$11.8 Billion; Report Released in Conjunction With International

Sweeps Week, May 21-25

The Business Software Alliance (BSA), a watchdog group representing the world's leading software manufacturers, today announced the results of its sixth annual benchmark survey on global software piracy.

The independent study highlights the serious impact of copyright infringement with piracy losses nearing $11.8 billion worldwide in 2000.

International Planning and Research Corp. (IPR), an independent research firm, conducted the survey for BSA. The software piracy estimates indicate that one in every three business software applications was pirated in 2000. The continuing software piracy problem signifies lost jobs, wages, tax revenues and a potential barrier to innovation and product development around the world.

"Although the piracy rates in several regions and countries have decreased, software piracy continues to rob the global marketplace of hundreds of thousands of jobs and billions in wages and tax revenues," said Robert Holleyman, President and CEO, Business Software Alliance. "In an effort to curb software piracy worldwide, BSA continues to implement educational and enforcement activities and works with governments around the world in support our efforts to address the software piracy problem."

The Global Software Piracy Study unveiling coincides with the launch of International Sweeps Week, a campaign announcing 159 settlements, for a total exceeding $6.2 million with companies and organizations in the United States, Europe, Asia/Pacific, Middle East, South Africa and Latin America.

This week also marks the second annual BSA Sweeps Week in the United States. Starting today, BSA is sweeping across the United States, starting on the East Coast, winding its way through the country's midsection and ending up on the West Coast, as it announces more than 36 U.S. settlements totaling $2.5 million. U.S. Sweeps states include New York, New Jersey, Pennsylvania, Washington, D.C., Virginia, North Carolina, Georgia, Alabama, Florida, Kentucky, Illinois, Missouri, Wisconsin, Texas, Colorado, Arizona, and California.

The 2000 world piracy rate did not decline for the first time in the study's history, but remained almost constant with the 1999 rate, with a one percentage point increase to 37%. The dollar losses due to piracy declined 3.5% from 1999 from $12.2 billion to just under $11.8 billion. North America, Asia/Pacific and Western Europe once again account for the majority (87%) of revenue losses.

The 10 countries with the highest piracy rates are (in rank order):

                   Top 10 Countries by Piracy Rate

                                       1999        2000

Vietnam                                 98%         97%
China                                   91%         94%
Indonesia                               85%         89%
Ukraine/Other CIS                       90%         89%
Russia                                  89%         88%
Lebanon                                 88%         83%
Pakistan                                83%         83%
Bolivia                                 85%         81%
Qatar                                   80%         81%
Bahrain                                 82%         80%

Regional Summaries -

Asia/Pacific: This region was the only area that increased its piracy rate in 2000, to 51%, from 47% in 1999. In addition, Asia/Pacific accounted for the largest piracy losses at nearly $4.1 billion or 35%. Japan's piracy rate increased to 37%, Korea increased to 56% and China increased to 94%. The countries with the highest piracy rates were Vietnam (97%), China (94%) and Indonesia (89%). The countries with the highest dollar losses were Japan ($1.6 billion), China ($1.1 billion) and Korea ($302 million).

Eastern Europe: In 2000, Eastern Europe continued to have the highest piracy rate at 63%, leading to a loss of nearly $404 million. Russia and the Ukraine and other CIS countries continue to have the highest piracy rates in this region, with 88% and 89% respectively. Poland, the third largest country in the region, reduced its piracy rate between 1999 and 2000 by six percentage points, to 54%.

Western Europe: At 34%, Western Europe continued to be the region with the second lowest piracy rate in 2000, but it experienced the second highest dollar losses, hitting $3.1 billion. This amount accounts for 26% of the total global losses due to software piracy. Western Europe was the region with the smallest change in its piracy rate from 1999. The largest dollar losses due to software piracy occurred in Germany ($635 million), United Kingdom ($530 million) and France ($480 million).

The highest piracy rates were in Greece (66%), Spain (51%) and Italy (46%). This is the third consecutive year Greece and Spain had the highest software piracy rates in Western Europe.

Latin America: While the Latin American region saw a decline in its piracy rate from 1999 to 2000, it became the second highest region in 2000, with a piracy rate of 58%, ahead of the Middle East at 57%. Latin America piracy cost the industry $870 million. The countries with the highest piracy rates were Bolivia (81%), El Salvador (79%) and Nicaragua (78%).

Once again, at 49%, Chile was the country with the lowest piracy rate in Latin America. Brazil and Mexico, the two largest economies in the region, saw a constant piracy rate, with no change between 1999 and 2000. Their current rates are 58% and 56%, respectively. Argentina, the third largest economy in the region, was also at 58%.

Middle East & Africa: In 2000, the Middle East and Africa had the third highest piracy rate at 55%. The countries with the highest software piracy rates were Lebanon (83%), Qatar (81%) and both Bahrain and Kuwait (80%). Software piracy costs this region $376 million. The three largest economies in the Middle East, Turkey, Israel and Saudi Arabia, each saw a decline in the piracy rate last year. Turkey experienced the largest reduction in piracy, from 74% in 1999 to 63% in 2000.

Israel had the lowest piracy rate in the region (41%). Saudi Arabia's piracy rate declined from 64% in 1999 to 59% in 2000. Africa's piracy was 52%, down from 56% in 1999. A falling piracy rate with a strong economy indicates a long-lasting decline in piracy and a more substantial change in software practices.

North America: The North American region continued to be the region with the lowest piracy rate at 25%. During the past six years, the region's piracy rate has declined from 32% to 25%. In the 2000 study, North America accounted for the third highest piracy losses totaling $2.9 billion. Asia/Pacific and Western Europe exceeded North America with losses totaling more than $4.1 billion and $3.1 billion, respectively.

In 2000, the piracy rates in the United States declined to 24%, and in Canada, the rate dropped three percentage points to 38%. During the past six years, the North American piracy losses totaled more than $22 billion. In 2000, total losses due to software piracy in the United States were more than $2.6 billion and nearly $305 million in Canada.

This is the sixth study conducted by International Planning & Research (IPR). This study evaluated sales data and market information for 85 countries in the six major world regions and was based on 26 different business software applications. The study compares 2000 piracy rates and dollars lost to software piracy to similar data gathered between 1994-1999.

The Business Software Alliance is the voice of the world's software and Internet industry 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 copyright; advocates public policy that fosters innovation and expands trade opportunities; and fights software piracy.

BSA worldwide members include Adobe, Apple, Autodesk, Bentley Systems, CNC Software/Mastercam, Macromedia, Microsoft, Symantec and UGS. BSA website: www.bsa.org.