Pirates cost software industry $50 billion in 2008

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Washington, DC - A fifth of PC software in the United States is pirated and the worldwide cost of piracy topped $50bn for the first time, says the annual report from IDC and the Business Software Alliance (BSA). Despite US piracy running at just 20%, market size means megabuck losses - over $9 billion in 2008.

The worldwide PC software piracy rate rose for the second year in a row, from 38 percent to 41 percent, because PC shipments grew fastest in high-piracy countries such as China and India, overwhelming progress elsewhere.

While emerging economies account for 45 percent of the global PC hardware market, they account for less than 20 percent of the PC software market. If the emerging economies' PC software share were the same as it is for PC hardware, the software market would grow by $40 billion a year. Lowering global piracy by just one point a year would add $20 billion in stimulus to the IT industry, says the report.

The monetary value of unlicensed software broke the $50 billion level for the first time. Worldwide losses grew by 11 percent to $53.0 billion in non-adjusted dollars, although half of that growth was the result of the falling U.S. dollar. Excluding the effect of exchange rates, losses grew by 5 percent to $50.2 billion. This compares to a legitimate PC software market of $88 billion in 2008, and a personal computer market of $244 billion.

"We are continuing to make progress against PC software piracy in many countries, which helps people working in the U.S.-led global software industry. That's the good news," said BSA President and CEO Robert Holleyman.

"The bad news is that PC software piracy remains so prevalent in the United States and all over the world," he added. "It undermines local IT service firms, gives illegal software users an unfair advantage in business, and spreads security risks. We should not and cannot tolerate a $9 billion hit on the software industry at a time of economic stress."

The lowest-piracy countries are the United States, Japan, New Zealand, and Luxembourg, all near 20 percent. The highest-piracy countries are Armenia, Bangladesh, Georgia, and Zimbabwe, all over 90 percent.

The highest-piracy regions are Central/Eastern Europe (67 percent) and Latin America (65 percent). The lowest regions are North America (21 percent) and the European Union (35 percent).

http://www.tgdaily.com/content/view/42401/140/

I don't know how I feel about this article. Mostly because a pirated piece of software does not necesarily equate to a loss in sales. But, it still doesn't look good for the PC market. I'm personally more concerned about the PC gaming market, as these numbers have to put a bad taste in the mouth of most developers.

edit: Sorry, I don't know if it's required but I forgot to put "[News]" in the title.

[+John. Subscriber¹]

I don't know how I feel about this article. Mostly because a pirated piece of software does not necesarily equate to a loss in sales. But, it still doesn't look good for the PC market. I'm personally more concerned about the PC gaming market, as these numbers have to put a bad taste in the mouth of most developers.

Agreed completely. Also, with those percentages, maybe anti-piracy movements are in the wrong location? I think more should be done in other areas, especially with 90% etc.

[brentaal]

Agreed completely. Also, with those percentages, maybe anti-piracy movements are in the wrong location? I think more should be done in other areas, especially with 90% etc.

Or make the prices more appropriate for those areas. After all, there's a reason why people choose a pirated piece of software rather than buying it.

[iamwhoiam]

When will these dumb asses get it through their heads that piracy is not a lost sale? If someone was thinking about downloading something then they were most likely not going to purchase it anyway. Now, if that same someone walked off with a physical boxed copy from a store, then that might mean something.

[Yusuf M. Veteran]

Or make the prices more appropriate for those areas. After all, there's a reason why people choose a pirated piece of software rather than buying it.

Exactly. If software developers could charge less in areas with a weaker economy, then most people there are less likely to pirate software. The numbers alone are scary. Imagine what the PC software market would be like without piracy. I'm sure we'd see more (and better) software.

When will these dumb asses get it through their heads that piracy is not a lost sale? If someone was thinking about downloading something then they were most likely not going to purchase it anyway. Now, if that same someone walked off with a physical boxed copy from a store, then that might mean something.

How is it any different? In the end, the person didn't pay for the software. Stealing is stealing. Pirating or otherwise, anyone who uses software without buying it is stealing. They're using software that they would have had to pay for in order to use.

[+Audioboxer Subscriber²]

*looks at title* .... Cue a legion of pirates looking for excuses and word play to downplay the effects of piracy.

Anyway, while I don't want this to happen for a while, the years we start going digital only for most media is when pirates possibly start losing. At least in terms of games, especially on consoles.

Closed platforms will be easy to regulate with digital content, handing out complete bans on consoles/accounts is a sure shot way to annoy the pirates.

[jewishornet]

All of these huge corporations, publishers and companies complaining about losses due to piracy have been soaking consumers, developers and artists for ages I have zero sympathy for them. If anything I hope they learn a lesson, you can only screw people for so long before people figure out a way to screw you back.

[iamwhoiam]

How is it any different? In the end, the person didn't pay for the software. Stealing is stealing. Pirating or otherwise, anyone who uses software without buying it is stealing. They're using software that they would have had to pay for in order to use.

Because a physical copy of the software is not missing. They can't claim it's a lost sale because it would never have been purchased to begin with. They didn't make or lose money on a pirated copy.

[sorlag]

Most companys should realize that the global market means, lowering prices to get the software spread wider and not to ask for high prices to only enable a few to buy it and let the shareholders swimm faster in money instead of a more solid money pool.

The whole industry needs to shift away from that piracy panic, open up their apps/games, massively lower the price and go for quality, customer involvement, massive spread, neater more logical trials, better shop/page designs that have been measured in time and attractivity and how fast they find it etc.

They head just into the direction of less sales, more piracy and then they finally push the goverments to censor the internet and hurt the privacy of peoples.

Open up your mind and don't blame anyone... blaming is just a downward spiral...

Try to find out how to get them buy and more happy instead of concentrating on crying that they don't buy.

You should concentrate on what you and what the buyers want and not on what you don't want and what to change to kill the pirates... this will hurt your paying customers.

Face it and solve it, instead of cheaply whine and feed the antipiracy censorship and bad protections.

Ah... and forget about thoose big numbers... they don't know anything... they just see dollar signs on theyr eyes and think... ooh X pirates = $X profit.

But hey... they don't buy cause your way/software/price/shop/support... sucks, so don't think shutting off them will lead them to buy it.

And you can't estamine the number of sales from the number of global pirates...

Gosh theese peoples/companys shift away from reality and logical thinking more and more, hold their hands and sing the pirate song and how poor they are with doing nothing wrong and getting those bad pirates...

Open your eyes, finally open them!

The global market in the software and music industry will change and you need to adapt or you get massive losses.

Don't lead our way into censorship... lead it into a new bright future...

Bla...

[lalalawawawa]

Wow... $50 billion? Very true. Because every downloaded software/game/mp3 from the internet for free is a lost sale, right? :rolleyes:

[Yusuf M. Veteran]

Because a physical copy of the software is not missing. They can't claim it's a lost sale because it would never have been purchased to begin with. They didn't make or lose money on a pirated copy.

That makes no sense. Not all software is sold with physical media. A vast majority are sold online as downloads. Just because there isn't a physical copy doesn't mean they can't make money on it. Each time someone pirates software, it's a loss of what would have otherwise been a potential sale.

Edited May 12, 2009 by Anaron

[dwhall]

Too bad they spent 80 billion in research to try to prevent pirating.. Could have made themselves an extra

30 billion :D

[Cold Blood]

I hate these kind of statistics. It's nearly impossible to trully estimate the losses. There are a million factors that you need to take into consideration. And even if we imagined that piracy didn't exist and everything would be perfect, I doubt the industry will earn 50 billions more. If piracy didn't exist a lot of people would simply do something else with their time or turn to freeware. And what about some of the crap they throw at users?

[Vice]

I'd say a lot of people pirate Photoshop. It must be one of the most pirated pieces of Software on the planet. But each pirated copy does not equate to a lost sale that is what these developers need to realise. How many people do you think would shell out ?535 for Photoshop if they couldn't pirate it?

I'm going to say none of the Home Users would buy it. Only freelancers who are making money out of using it and Businesses but these aren't the majority of people pirating it.

What this all means is, if you get rid of piracy your sales wont suddenly increase through the roof. Sure they may go up 1-2% but then you need to also consider all the pirates who played your game and recommended it via their blogs, forum posts and simple word of mouth which would have made more people pirate it or purchase it (which would have created either more buzz or more sales).

I'm of the opinion that Piracy of Big successful titles deminishes the revenue stream. But of the Little Small titles with zero marketting budgets it helps. I'm a developer myself and does annoy me when I think'Gee all those users pirating it could have bought it instead and made me so much more money'> but you just can't look at it like that it isn't so black and white.

[Sethos]

Wow... $50 billion? Very true. Because every downloaded software/game/mp3 from the internet for free is a lost sale, right? :rolleyes:

Exactly, these kinds of estimates are totally random. They have no idea how many copies are downloaded and they have no idea how many of these downloads constitute a lost sale. So putting a number on it is just for the sensationalism.

[iamwhoiam]

That makes no sense. Not all software is sold with physical media. A vast majority are sold online as downloads. Just because there isn't a physical copy doesn't mean they can't make money on it. Each time someone pirates software, it's a loss of what would have otherwise been a potential sale.

If someone is going to pirate something, it was never a potential sale, let alone a lost sale. And you can't lose 50 billion that you never had to begin with.

[Rohdekill]

If someone is going to pirate something, it was never a potential sale, let alone a lost sale. And you can't lose 50 billion that you never had to begin with.

Uhm...wrong. If it were completely impossible to pirate software, there WOULD be potential sales since anyone who would want it would have to consider the purchase.

You are correct on the loss of sale portion.

[jonhapimp]

they totally forgot about steam and there game prices, when ever they lower there price for one weekend they get a HUGE BOOST in sale more than 200% increase at times

[Southern Patriot]

That makes no sense. Not all software is sold with physical media. A vast majority are sold online as downloads. Just because there isn't a physical copy doesn't mean they can't make money on it. Each time someone pirates software, it's a loss of what would have otherwise been a potential sale.

You said it right there. It is not loss of an actual sale, but a potential one. This is like the auto industry saying they lost billions of dollars last year because people chose to keep driving their old cars or buy a used car from someone else instead of buying a new car off the lot (neither of which makes the auto industry any money, but both were "potential sales").

Exactly, these kinds of estimates are totally random. They have no idea how many copies are downloaded and they have no idea how many of these downloads constitute a lost sale. So putting a number on it is just for the sensationalism.

+1

[James Rose]

While I agree, as a software developer, that those who pirate software/content are potentially lost sales... what bothers me, or at least makes me wonder is how can anyone know how much is pirated? Really, what is the math on this? Did they catch 1000 pirates and quess that there are another 1000? Are they counting dollars based on who they caught? (That would be wrong too)

Does anyone have the math?

Otherwise it's just a guess.

[iamwhoiam]

Uhm...wrong. If it were completely impossible to pirate software, there WOULD be potential sales since anyone who would want it would have to consider the purchase.

But considering that piracy IS possible, anyone that wants something can get it for nothing and anyone that goes the piracy route would never buy it and therefore it would never have been a potential sale or a lost sale.

[Yusuf M. Veteran]

If someone is going to pirate something, it was never a potential sale, let alone a lost sale. And you can't lose 50 billion that you never had to begin with.

But it is a potential sale! The whole point of pirating software is to acquire it without having to pay for it. Anyone who pirates software either wants or needs it. That want or need results in a potential sale. Why? Simply because that person would have been forced to buy it if piracy didn't exist.

You said it right there. It is not loss of an actual sale, but a potential one. This is like the auto industry saying they lost billions of dollars last year because people chose to keep driving their old cars or buy a used car from someone else instead of buying a new car off the lot (neither of which makes the auto industry any money, but both were "potential sales").

Thank you!

But considering that piracy IS possible, anyone that wants something can get it for nothing and anyone that goes the piracy route would never buy it and therefore it would never have been a potential sale or a lost sale.

You're making quite the assumption there. Simply because someone pirates software doesn't mean they wouldn't buy software if piracy didn't exist. The person obviously wanted the software so the potential for that person to buy the software exists. You buy software, like any other item, because you want it (out of necessity or some other reason).

Here's an example: 50 people pirate software. Now, imagine piracy didn't exist. Out of that 50, chances are some of them will buy the software because they actually needed it. That's why it's a loss of a potential sale whenever someone pirates software.

Still not convinced? Perhaps you need to understand the definition of potential:

po-ten-tial [puh-ten-shuhl]

?adjectiveb>i>

1. possible, as opposed to actualthe potential uses of nuclear energy. i>
   

[grik]

They are going in the wrong track, and crunching the wrong numbers.

Look at Steam, they have great sells, people dont pirate Steam Games so often cause they are honest and do honest prices, without intermediary fares :) Direct to the costumer.

[babyHacker]

http://www.tgdaily.com/content/view/42401/140/

I don't know how I feel about this article. Mostly because a pirated piece of software does not necesarily equate to a loss in sales. But, it still doesn't look good for the PC market. I'm personally more concerned about the PC gaming market, as these numbers have to put a bad taste in the mouth of most developers.

edit: Sorry, I don't know if it's required but I forgot to put "[News]" in the title.

The most pirated piece of software is Windows.

I think over 50% of pirated versions was a lost sale. Sure, there are people upgrading that may have not done so in the first place but I think that those number much less than 50%.

[Digitalx]

quite honestly it's greed that loses them money it's not the piracy. It's the fact some companies want to go out of their way to try sell software for hundreds if not thousands which keeps it out of the hands of general people who wish to use them. It's the quantity vs quality game in a sense. If you wanna make money make a good product offer at a decent at maximum $250 or less (think of software pricing etc under the hierarchy of the OS which should cost most then everything should fall under the cost umbrella of it accordingly.) then more people will buy it at a lower price so you still get good profit and many more users happy to dish out for it if it's worth it. Quality you can make a good program full of DRM and anti piracy measures charge $1,500 a business or two might buy a single license and employee will leak it won't make bugger all profit and general software and support quality will diminish till you get to vaporware. It's the key to all piracy really.