Proliferation of Internet and Wireless Capabilities are Powering Piracy to New Levels — $112 Billion - Industry Trend or Event

Edge: Work-Group Computing Report, Oct 18, 1999

Piracy is on the rise as the Web matures in new markets and the wireless Internet brings a much larger audience online.

Computer Economics research shows that by 2005 over $112 billion in software, music, video, and text will be pirated over the Internet.

"Piracy is due for some heavy growth with the increase in the capabilities of the wireless Internet," said Computer Economics Vice President of Research Michael Erbschloe. "The more hands that the Internet gets into, the more it will grow. Many companies are not taking this into account. The number of wireless users is three times that of Internet users. As these two markets converge, piracy will mushroom."

Worldwide Piracy of Software, Music, Video, and Data

                   1999          2001         2003        2005
              ($ billions)  ($ billions) ($ billions) ($ billions)
Software/Games     10.70         16.00        29.60       55.20
Music/Audio         2.08          5.04         9.11       21.42
Video/Graphics      0.66          2.08         5.53       11.62
Text/Data           1.16          2.89        10.06       24.61
All Categories     14.59         26.01        54.30      112.85

This year, over $14.5 billion will be lost to piracy worldwide with nearly $5 billion being lost in North America. In 2005, the amount of money lost to piracy in North America will have rocketed to over $28 billion. However, this will account for only 25 percent of worldwide piracy. Both Europe and the Asia Pacific region will be pirating huge amounts of software, music, video, and text ($19 billion and $62 billion, respectively).

The most severe piracy will occur in Asia. In fact, 55 percent (over $61 billion) of piracy that is expected to occur in 2005 will be attributable to the Asia Pacific region. For additional information about the status of piracy throughout the world, Computer Economics has posted piracy forecasts for each region of the world on its Web site at www.compecon.com/new4/cei/pressrel.html.> Computer Economics is an independent research firm specializing in helping IT decision makers plan, manage, and control IT costs through advisory services, analyst support, an innovative Web site, and printed reports. Based in Carlsbad, Calif., Computer Economics serves 82 percent of the Fortune 500. FMI: http://www.computereconomics.com.