Software Piracy Loss Climbs 9% Rate Drops But Revenue Loss Tops $13.1 Billion During 1995
U.S. and foreign companies lost $13.1 billion in 1995 from illegally copied business software programs, according to an industry survey.
Although the piracy rate fell worldwide, revenue losses from piracy went up 9 percent. The study estimated the piracy rate decreased to 46 percent in 1995 from 49 percent in 1994, but dollar losses grew because the volume of software sold worldwide increased.
The study, conducted by International Planning & Research of Redmond, Wash., was released last week.
The Software Publishers Association and the Business Software Alliance commissioned a joint study for the first time. Each group conducted separate studies before.
Lack of enforcement of copyright laws is the leading cause of growing piracy losses, the associations said.
Pirated business software ranges from accounting programs to spreadsheets and e-mail.
Consumers end up paying for the industry’s losses.
“Software development costs must be recovered through legitimate sales,” said Ken Wasch, president of the Software Publishers Association. “If half the software that is used is pirated, the pirates get a free ride as legitimate software users pay for their use.”
The report said the countries with the worst piracy records are Vietnam, with a 99 percent rate; El Salvador, 97 percent; China and Oman, 96 percent; and Russia, 94 percent.
As the world’s leading producer of business software, the United States suffered the most losses, followed by Japan.
U.S. companies lost an estimated $2.94 billion in 1995. But a drop in the average price of U.S.-made software largely accounted for a nearly 18 percent decline in estimated revenue lost between 1994 and 1995.
Piracy within the United States is decreasing, the report said. The U.S. piracy rate in 1995 was 26 percent, down from 31 percent in 1994.
Japanese companies lost an estimated $1.65 billion in 1995. Japan’s piracy rate in 1995 was 55 percent, down from 66 percent in 1994.