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The hard reality of software piracy

Uncover the latest consumer trends as demand for both official and pirate software soars. Download our free software research study for all our facts and findings.

11% of the consumers who took part in our software research study feel that official software brands are primarily responsible for the amount of software available online today.

Consumer demand for ways to communicate, telework, fill disposable leisure time, and learn from home has been increasing for decades, however the global pandemic accelerated this trend. A sudden spike in demand for software which facilitates each of these requirements has also been reflected in the level of pirate software appearing across online channels.

The illicit act of providing illicit extensions to free software trials, the unofficial access to lifetime licenses, and the distribution of unauthorized software is classified as software piracy. It´s a widespread problem which has grown in parallel with our reliance on the internet, technology, and digital distribution channels. In the week from March 11 to March 18, 2020, the average daily broadband data usage per user in the US was 6.3 GB during office hours, a 41.4 percent increase compared to January.

In this article we uncover the main issues associated with software piracy, providing insights into the latest consumer relationships with pirated software taken from our exclusive research study, conducted with Ipsos*.

The financial cost of pirate software

Users of pirate software search for, and download it intentionally, an activity which costs the global software industry tens of billions of dollars in lost revenue each year. A global survey conducted by the Business Software Alliance (BSA) published in 2018, reported that an estimated 8.6 billion US dollars’ worth of unlicensed personal computer software was being used in the United States alone. In fact, 40 percent of all software used throughout the world is not properly licensed, translating into losses of over 45 billion US dollars.

Today, global software companies are reporting that piracy has increased by 20 to 30 percent due to COVID-19, and as a result of an increase in consumers working and learning from home.

Our own data from our exclusive Pirate Software Research Study conducted with Ipsos supports this evidence. We learnt that 35% of respondents have downloaded some form of pirate software. Of this group, more than half (53%) downloaded the software free of charge.

Research Study: Piracy and online trends in the software industryDOWNLOAD

It´s important that we recognize that not just developers and official software resellers feel the financial implications associated with software piracy. The illicit use of pirate software can cost business owners who install pirate software on company devices huge sums of money, either as a result of legal proceedings, or the indirect damage inflicted by viruses, malware, and ransomware which are so often installed on computers and systems alongside pirate software.

Security threat associated with software piracy

The common issue of malware poses a major threat to users of pirated, unlicensed software. Malware attacks can damage systems and often result in the theft of personal or financial data, posing a significant danger to both individuals and business alike.

The BSA report found that approximately 33% of organizations that choose to install unlicensed software experience malware issues, with the average cost of a malware attack to a business estimated to be in the region 2.4 million US dollars.

Ransomware, malware, trojans, and tracking cookies are commonly found on pirate sites and files, posing a risk to sensitive data and information. This again has implications for both consumers and businesses from both a financial and reputational standpoint. In our exclusive consumer research study, we found that despite such a large number of consumers having downloaded pirate software, more than three quarters (77%) are extremely concerned about the risk of downloading a virus. An additional 18% are a little concerned. The remaining 6% claim that the risk of viruses does not concern them. So, it would seem that despite the widespread acknowledgement of their fears, it´s still a risk that they are willing to take.

Software piracy is detrimental to innovation

Innovation in the broadest sense is attained by developing new products, processes, or organizational improvements within the industry. To achieve this a number of resources are required.

The piracy of digital software has caused countless job losses within the global industry. This is a direct result of a drop in both sales and revenue, and has reduced resources. Software companies are less able, or perhaps less willing to invest in research and development until they have the issue of digital piracy under control.

Piracy damages software innovation which is detrimental to all those that benefit from its creation. The vital importance of protecting software from piracy means that funds must be attributed to employing anti-piracy technology to safeguard revenue, brand value, and brand reputation. These funds may otherwise have been used on research and development. It´s concerning when we consider that a quarter (26%) of consumers named product quality as the most important factor when purchasing legitimate software online.

11% of respondents feel that official brands are primarily responsible for the amount of pirate software available online today. An additional 30% hold them jointly accountable with those that profit from pirate software and the consumers who access it.

The absence of customer support and software updates concerns consumers

Pirated software does not come with manuals, nor is technical support available to users of pirate software which are both readily available to legitimate users. Also, those running pirated versions will not be prompted or contacted with updates.

Key features and functions, particularly those which require online access are often missing in pirate software. These features are frequently excluded from the software package to avoid detection from anti-piracy technology.

Reliability of service is a key issue. Users also run the risk of suddenly losing the software or saved files which may disrupt or harm their business. This is particularly significant as 26% of consumers chose the quality and functionality of software as the most important factor when purchasing software. An additional 11% named the importance of software features.

Fighting pirate software

Combating the issue of pirate software is perhaps more important today than ever before. Especially when we consider the trends discussed in this article and the data found within our exclusive research study.

Our reliance on e-commerce, and the growing number of us working or learning from home are trends which accelerated due to the global pandemic. Many of these new behaviors are here to stay, meaning that businesses and consumers are more vulnerable to the associated and growing risks.

Want to learn more about consumer behaviour online within the software industry?

*Ipsos Group S.A. is a multi-national market research and consulting firm with headquarters in Paris, France. The company was founded in 1975 and today are global leaders in market research. Ipsos delivers reliable information and true understanding of Society, Markets and People.

Download our free software research study conducted with Ipsos today, with access to all our facts and findings.