Latin America piracy rate dropped from 68 percent in 2005 to 66 percent in 2006; industry losses surpassed $3 billion a year. The worldwide software piracy rate holds steady at 35 percent.

Washington, D.C., (May 15, 2007)— A new study reveals that 66 percent of the software installed in 2006 on personal computers (PCs) in Latin America was obtained illegally, a two percentage point decrease from 68 percent in 2005, amounting to more than $3 billion in losses due to software piracy. 

The PC software piracy rate in Latin America was significantly higher than the global average of 35 percent, which remained steady for the third year in a row.  As a region, it was second only to Central and Eastern Europe (68%), which ranked the first of all the regions in the world.

These are among the findings of the fourth annual global PC software piracy study released today by the Business Software Alliance (BSA), an international association representing the commercial software industry.  The study was conducted independently by IDC, the information technology (IT) industry’s leading global market research and forecasting firm.

Of the 102 countries covered in this year’s study, piracy rates dropped moderately in 62 countries from 2005 to 2006, and increased in 13.  Latin America contributed with seven of the latter: Chile, Colombia, Dominican Republic, El Salvador, Panama, Venezuela and the market identified as “Other Latin America”.

Concurrently, the region had one of the markets that experienced one of the most significant drops in the piracy rate during last year worldwide: Brazil, which reduced it by four percentage points from 2005, to 60 percent. However, the country led the region in dollar losses due to PC software piracy rate in 2006, with estimated losses at $1.1 billion. Other markets in the region that surpassed the 200 million dollars in losses as per software piracy in 2006 included Mexico ($748 millions), Venezuela ($307 millions) and Argentina ($303 millions).

“While we are making progress in some Latin American markets and worldwide, we still have a lot of work to do to reduce unacceptable levels of piracy,” said BSA President and CEO Robert Holleyman.  “These significant losses translate into negative impacts on IT industry employment, revenues, and financial resources available for future innovation and the development of new technologies.” 

Other key findings in Latin America include:

• Of the 19 Latin American markets covered by the study, the PC software piracy decreased in eight, increased in seven and remained the same in four.
  
  
• PC software piracy rate decreased 4 percentage points in Brazil (60%); two percentage points in Argentina (75%), Costa Rica (64%), Ecuador (67%), Mexico (63%) and Peru (71%). It dropped one percentage point in Bolivia (82%) and Paraguay (82%).
  
  
• Venezuela’s PC software piracy rate increased four percentage points to 86 percent. The rate grew three percentage points in Panama (74%); two points in Chile (68%), Colombia (59%) and the Dominican Republic (79%); El Salvador (82%) experienced a one point increase, as well as the market identified as “Other Latin American markets” (83%) in the study.
  
  
• The four Latin American countries where the PC software piracy rate remained unchanged in 2006 were Guatemala (81%), Honduras (75%), Nicaragua (80%) and Uruguay (70%).
  
  
• Colombia, Brazil, Mexico and Costa Rica are the only countries in the Latin America that ranked below the regional average PC software piracy rate.
  
  
• The study reveals that Latin America has five countries in the list of the 20 countries with the highest piracy rates in the world: Venezuela, El Salvador, Bolivia, Paraguay and Guatemala.

Globally, the study revealed that there were $40 billion in losses due to software piracy.  Progress was seen in a number of emerging markets, most notably in China, where the piracy rate dropped ten percentage points in the last three years, and in Russia, where piracy fell seven percentage points during the same time period. 

The study found that even relatively low piracy rates can amount to huge losses in large markets.  For example, while the U.S, had the lowest piracy rate of all countries studied at 21 percent, it also had the greatest total losses at $7.3 billion.  China saw the second highest losses at $5.4 billion with a piracy rate of 82 percent, followed by France with losses of $2.7 billion and a piracy rate of 45 percent.

Other key findings:

• In more than half of the 102 countries studied, the piracy rate exceeded 60 percent. In approximately one third of the countries, the piracy rate exceeded 75 percent.
  
  
• The PC software piracy rate increased in two regions, Asia Pacific (55 percent) and the Middle East/Africa (60 percent), while decreasing in three regions, Central/Eastern Europe (68 percent), Latin America (66 percent), and Western Europe (34 percent).  The piracy rate in North America, the largest region, remained constant at 22 percent.  The worldwide piracy rate stayed the same at 35 percent, largely due to the increase of the piracy rate in Asia, which more than offset the decreases in other regions.
  
  
• Emerging markets in Asia Pacific, Latin America, Eastern Europe, and the Middle East and Africa accounted for one-third of PC shipments, but only 10 percent of spending on PC software. 
  
  
• Over the next four years, businesses and consumers worldwide will spend $350 billion on PC software.  If current trends continue, the study predicts more than $180 billion worth of PC software will be pirated during that period.

“A number of factors contribute to regional differences in piracy:  the strength of intellectual property protection, the availability of pirated software, and cultural differences,” said John Gantz, chief research officer at IDC.  “Reducing software piracy around the world will take much more work and investment, but those efforts will pay off in the form of stronger local IT industries that drive broader economic growth.”

“The critical elements of the global fight against software piracy are education, strong government policy, and enforcement,” said Holleyman.  “Expanded access to the Internet in emerging markets is making piracy more convenient, which makes it all the more imperative to keep up anti-piracy efforts.” 

The BSA-IDC Global Software Piracy Study covers piracy of all packaged software that runs on personal computers, including desktops, laptops and ultra-portables.  The study does not include other types of software such as server- or mainframe-based software.  IDC used proprietary statistics for software and hardware shipments and enlisted IDC analysts in fifty countries to confirm software piracy trends.  

For more details or for a copy of the study, visit www.bsa.org/globalstudy.

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Contact Information
Rodger Correa
202-530-5140
rodgerc@bsa.org

About BSA
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 and its hardware partners before governments and in the international marketplace.  Its members represent one of the fastest growing industries in the world.  BSA programs foster technology innovation through education and policy initiatives that promote copyright protection, cyber security, trade and e-commerce.  BSA members include Adobe, Apple, Autodesk, Avid, Bentley Systems, Borland, CA, Cadence Design Systems, Cisco Systems, CNC Software/Mastercam, Dell, EMC, Entrust, HP, IBM, Intel, McAfee, Microsoft, Monotype Imaging, PTC, SAP, SolidWorks, Sybase, Symantec, Synopsys, The MathWorks, and UGS.

About IDC
IDC is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. IDC helps IT professionals, business executives, and the investment community make fact-based decisions on technology purchases and business strategy. Over 850 IDC analysts in 50 countries provide global, regional, and local expertise on technology and industry opportunities and trends. For more than 42 years, IDC has provided strategic insights to help our clients achieve their key business objectives. IDC is a subsidiary of IDG, the world's leading technology media, research, and events company. You can learn more about IDC by visiting www.idc.com.