Business Software Alliance Study Reveals Significant Decline in World Software Piracy since 1994.

Business Editors/High-Tech Writers

WASHINGTON--(BUSINESS WIRE)--June 2, 2003

Nearly All Countries Succeed in Reducing Piracy Problem, While U.S. Piracy Hits New Low

Industry Says More Education Is Key

The global piracy rate for commercial software has decreased 10 points over the last eight years, supported by piracy declines in all regions of the world, according to the Business Software Alliance's (BSA) eighth annual survey on global software piracy (www.bsa.org/globalstudy/).

Intensified education efforts are critical to shrinking the piracy problem further, BSA said.

BSA, the Washington, DC-based international association representing the world's leading software publishers, today announced that the global software piracy rate declined to 39% in 2002, below its 1994 all-time high of 49%.

Worldwide, every country except Zimbabwe has reduced its rate of piracy since 1994, the year in which the study was first commissioned. The U.S. piracy rate hit an all-time low of 23%, currently the lowest piracy rate in the world.

"It is welcoming news to learn that the worldwide software piracy problem has improved significantly since the release of the first study," said Robert Holleyman, president and CEO of BSA. "We attribute this trend to the industry's success in implementing educational programs, working with governments to strengthen copyright laws and emphasizing good software asset management businesses practices that contribute to a safe and legal digital world.

"However, it's critical to recognize that the industry is facing a spiraling Internet piracy problem. In the future, if the industry is to continue its success in reducing the problem further, then clearly, more robust education and advocacy initiatives will be required."

The independent study utilizes a methodology to determine the worldwide piracy rates of business software applications, the associated dollar losses and trends in 85 countries.

Worldwide dollar losses due to piracy increased from $10.97 billion in 2001 to $13.08 billion in 2002, a 19% rise that can be attributed to generally higher software prices, despite the continued downturn, smaller software shipments and slightly lower piracy rates.

"The 2002 world piracy rate marks the first decline of the piracy rate since an all-time low of 36% was set in 1999," said Holleyman. "Although we've made significant progress over the years to reduce the piracy rate, no level of piracy is acceptable. BSA is committed to continue working with governments, organizations and law enforcement agencies worldwide to raise awareness and keep piracy on a downward trend," he said.

    The regional improvements in piracy rates are:

        Regional Improvements in Piracy Rates
                      1994-2002
                                 1994       2002
    Middle East/Africa             80%        49%
    Latin America                  78%        55%
    Western Europe                 52%        35%
    Eastern Europe                 85%        71%
    Asia/Pacific                   68%        55%
    North America                  32%        24%

Regional Summaries -

Middle East/Africa: This region is the most improved region with a 31 point reduction in piracy, from 80% in 1994 to 49% in 2002. In this region, piracy rate fell from 84% in 1994 to 50% in 2002, a decrease of 34 points supported by improving piracy rates in all countries. Most improved of all countries is the UAE with a 50 point drop, from 86% in 1994 to 36% in 2002.

In Africa, the piracy rate declined 29 points, from 77% in 1994 to 48% in 2002. South Africa dropped 30 points, from 64% in 1994 to 34% in 2002, and Egypt dropped 32 points, from 84% in 1994 to 52% in 2002, making it the most improved country in Africa.

Latin America: Second only to the Middle East/Africa region in improvement, the Latin America regional piracy rate declined 23 points between 1994 and 2002. Guatemala had the largest drop, 33 points, from 94% in 1994 to 61% in 2002. El Salvador decreased its piracy rate 29 points, from 97% in 1994 to 68% in 2002.

The piracy rates in Costa Rica and the Dominican Republic each decreased 28 points; both countries decreased from 89% in 1994 to 61% in 2002. Brazil and Mexico, the two largest countries in Latin America decreased 22 and 23 points, respectively. Brazil dropped from 77% in 1994 to 55% in 2002. Mexico fell from 78% in 1994 to 55% in 2002.

Western Europe: The piracy rate of Western Europe decreased 17 points, from 52% to 35%, the third best of all the regions. Ireland improved the most, decreasing from 74% in 1994 to 42% in 2002. Spain followed with a 30 point improvement, dropping from 77% to 47%. Finland and the Netherlands each reduced their rates by 28 points.

Switzerland had the lowest piracy rate in Western Europe in 1994, and after decreasing six points to 32% in 2002, it is still below the regional average of 35%. However, it is well above Denmark, which had a piracy rate of 24% in 2002.

Eastern Europe: The piracy rate in Eastern Europe dropped 14 points, from 85% in 1994 to 71% in 2002, and is the fourth most improved region. Slovenia improved the most, reducing its piracy rate by 37 points, from 96% to 59%. Hungary followed with a 31 point drop, from 76% in 1994 to 45% in 2002. The piracy rate in Russia dropped only six points, from 95% in 1994 to 89% in 2002.

The Ukraine also only dropped six points, from 95% to 89%.

Asia/Pacific: The piracy rate in the Asia/Pacific region improved 13 points, from 68% in 1994 to 55% in 2002. Japan had the largest drop in piracy in the region, decreasing from 66% in 1994 to 35% in 2002. Taiwan followed with a 29 point drop, from 72% in 1994 to 43% in 2002. The Philippines dropped 26 points from 94% in 1994 to 68% in 2002. Korea dropped 25 points, from 75% in 1994 to 50% in 2002.

North America: North America has the lowest piracy rate in the world, and it declined from 32% in 1994 to 24% in 2002. At 23% in 2002, the U.S. piracy rate decreased eight points from 31% in 1994, and is still the lowest of all the countries worldwide. The piracy rate in Canada was 39%, a drop of seven points from 46% in 1994.

BSA commissioned International Planning and Research Corporation (IPR), an independent research firm to conduct the survey. The study evaluated sales data and market information for six major world regions and examined 26 business software applications.

The study is based on the reconciliation of two sets of data: the demand for new software applications and the legal supply of new software applications. The data are derived from two primary sources: software shipment data supplied by BSA member companies and market data provided by MetaFacts, Inc., a technology market research firm.

The Business Software Alliance (www.bsa.org) is the foremost organization dedicated to promoting a safe and legal digital world. BSA is the voice of the world's commercial software industry before governments and in the international marketplace. Its members represent the fastest growing industry in the world.

BSA educates consumers on software management and copyright protection, cyber security, trade, e-commerce and other Internet-related issues. BSA members include Adobe, Apple, Autodesk, Avid, Bentley Systems, Borland, CNC Software/Mastercam, Internet Security Systems, Macromedia, Microsoft, Network Associates and Symantec.