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A Tale of Two Markets

It’s not every day that someone freely admits to criminal behavior. Traffic tickets aside, few people are brazen enough to acknowledge serious crimes. Yet in BSA’s ninth annual Global Software Piracy Study, more than half of the world’s computer users readily concede they steal software.

Some users say they acquire unlicensed applications all or most of the time. Others say they do it occasionally or rarely. It adds up to a crushing problem. The net effect in 2011 was a global software piracy rate of 42 percent. Because of rapid growth in the world’s highest-piracy markets, the commercial value of all that stolen software jumped more than $4 billion year-over-year to reach a new record total of $63.4 billion.

Overall, this year’s study is a tale of two very different kinds of markets — those in mature and emerging economies — which are following dramatically different paths in how they protect and enforce intellectual property rights.

The study finds that piracy rates in emerging markets tower over those in mature markets — 68 percent to 24 percent, on average. This is especially troubling because emerging economies are rapidly extending their influence over the global PC market. They took in 56 percent of last year’s shipments of new computers. Meanwhile, pirates in emerging markets install nearly four times more software per PC than their counterparts in mature markets. That helps explain how emerging markets are the driving force behind the global run-up in the commercial value of software piracy.

Around the world, the study suggests pirates do not perceive a deterrent strong enough to change their behavior. For example, just 15 percent of frequent pirates in emerging markets say the risk of getting caught is a reason NOT to do it.

But even in mature markets, where penalties include jail time and thousands of dollars in fines, just one in five frequent pirates say the risk is enough to deter them. And shockingly, business decision makers, the sector of the population with arguably the most to lose, admit to pirating software more frequently than other users.

Public education, improving legal frameworks, and active enforcement are making a difference in some important emerging markets. For example, India, Mexico, and Russia all notched incremental reductions in their piracy rates in 2011, coinciding with noteworthy government and industry enforcement efforts.

By its sheer scale, China continues to have the world’s most conspicuous piracy problem. Lackluster performance in protecting intellectual property there has allowed the country’s illegal software market to balloon to a commercial value of nearly $9 billion. Meanwhile, legal software sales in China come to less than $3 billion, making the country’s piracy rate 77 percent. To put the picture in even starker terms, users in China spend just $8.89 per PC on legal software. That is less than a quarter of the amount users spend in other BRIC markets.

Overall, this year’s study shows how far we still have to go in deterring software piracy in some of the world’s most important IT markets. That is why BSA’s study outlines a four-point policy blueprint that we will continue to advance in partnership with governments and industry.

One way we will know we are making progress is when we start to see fewer computer users breezily admitting they are software thieves.

Jodie Kelley


Jodie L. Kelley leads BSA’s domestic and international compliance & enforcement programs including its copyright-enforcement activities, its compliance policy work, its efforts against Internet crime, and its educational programs to promote software license compliance and respect for intellectual property. Kelley serves as BSA’s general counsel for all corporate matters and manages BSAs’ compliance & enforcement programs and counsel in Asia, Europe, the Middle East, Africa, and the Americas. Representing the largest copyright-based industry, BSA operates in more than 60 countries worldwide.

Prior to joining BSA, Kelley served for six years as Vice President and Deputy General Counsel of Fannie Mae, a government-sponsored enterprise chartered by Congress to provide liquidity, stability and affordability to the US housing and mortgage markets. There, she was responsible for managing the company’s litigation portfolio and its responses to various governmental inquiries. She also was responsible for advising the company on issues including antitrust and anti-fraud. Previously, she was a partner at Jenner & Block in Washington, where she specialized in civil and regulatory litigation and handled cases before trial and appellate courts and regulatory agencies throughout the country.

Kelley is a native of New Orleans, and a member of the Board of Directors of Commonwealth Academy. She earned her JD from Harvard Law School and BSS from The Pennsylvania State University.

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