Pay for Use: Piracy Drops by 3% in India

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At a time when the Indian sub-continent is plagued with some or other
scams and reports on unethical deeds involving some high profile
politicians, God-men or sports and film personalities, here is some
good news! According to a recent study by BSA-IDC, the software piracy
rate in India has declined by 3% in 2009 and stands at 65% to that of
68% in 2008.



However, despite the encouraging drop in installations of unlicensed
software on personal computers in India, the dollar losses caused by
software piracy continued to remain in the $2 billion range and the
piracy rate still remained higher than the overall Asia Pacific
averages.



Globally the software piracy rate has gone up from 41% to 43% although
at least in 54 markets out of 111 there was a drop in piracy rate. The
key reason for the average global piracy rate going up was due to the
PC market growth in the
BRIC nations (Brazil, Russia, India, China). Out of these 54 economies
the major PC market is concentrated in these four countries. This has
blown up the global piracy rate. Another key reason spiking up piracy
globally is rise in sophisticated software pirates who are using online
as one of their selling point. “The pirates are becoming more
sophisticated in their approach and they are increasingly finding ways
to sale pirated software using the Internet. And it's very
difficult to track them,” says Lizum Mishra, Director,
Business Software Alliance (BSA), India.



According to her there are a number of factors that drive piracy up or
down like, higher deployment of older computer (the higher is the
deployment of old PCs, the higher is chances of pirated software
usage), number of white boxes (assembled PCs) installed versus the
branded computers shifted in the market. Also activities like
legalization or management programs run in a country or awareness
programs run actually drives piracy up or down. Another reason for
decline of piracy was adoption of new and inexpensive technologies like
netbooks which come loaded with licensed software, a natural outcome
that resulted in piracy decline. Currently the PC shipment in India is
9.6 million among which 40% is the laptop segment indicating
licensed/original software installation. Assembled PC is approximately
40% which indicates deployment of unlicensed software.



On asking whether recession had any influence towards lower piracy
rate, considering the fact that 2009 was the worst year hit by
recession and that everywhere IT spends declined, Mishra said,
“I am not sure whether recession had a direct correlation
with reduction of software piracy because we have seen that software
piracy is not always directly correlated to consumer IT
spending.”



"When consumers don't deploy new computers they have the
older ones which mostly runs on older software and have higher ratio of
unlicensed software deployment. Normally the newer computers are
pre-loaded with licensed software therefore, the chances of piracy are
less,” she explains. “Therefore, recession might
not have direct correlation with consumer spending resulting in
software piracy decline,” she reasons.



Approximately $ 16 billion revenue loss was borne by the original
software industry in 2009 in APAC region compared to $ 15 billion in
2008. India is in the middle among the APAC countries when comes to
software piracy rate. In China it's as high as 79%.
“Only three countries globally had 3% significant drop
(India, Canada and Chile). It's a big achievement,”
remarks Mishra.



Revenue loss due to software piracy for the software industry in India
continues to be in the $ 2 billion range which is quite high. However,
this 3% drop is a big achievement and indicates a new trend derived
from the efforts resulting from government and the industry coming
together. The state (Karnataka, Maharashtra) and central government
have merged totally with the industry to run various programs to fight
against the piracy, running awareness programs legalization drive, etc.
“This has certainly contributed a lot. The support from the
Indian government both at central and state level is very much needed.
However, India has a long way to go towards working on better
enforcement mechanisms to fight the case of software piracy,”
she says.