Software piracy rate in M'sia is still 'very high'

Revenue losses as a result of software piracy increased from US$129 million to US$134 million in 2004, according to a recent BSA study.

MALAYSIA--Software piracy rate in Malaysia may have dipped by two percent last year, but officials warn that a rate of 61 percent is still alarming. The problem could also worsen as Internet penetration continues to grow, giving consumers easy access to pirated software via Web sites and file-sharing networks.

According to a recent global software piracy study released by Business Software Alliance (BSA), piracy rates in the Asia-Pacific last year currently range from a high 92 percent in Vietnam and China, to a low 23 percent in New Zealand.

"We are pleased that the piracy rate (in Malaysia) has declined," said Ajay Advani, BSA Malaysia's committee chairman. "However, a piracy rate of 61 percent is still very high. There is a lot more work to be done."

BSA is an anti-piracy organization formed by the world's leading software developers including Microsoft, Adobe Systems, and AutoDesk.

Based on the growth of the Malaysian software market, losses suffered from piracy climbed from RM 490 million (US$129 million) in 2003 to RM 509 million (US$134 million) last year, according to the BSA study. On a more positive note, the piracy rate in the country has dropped some 20 percent over the past 10 years, according to Advani.

"One thing the [Malaysian] government could do is to set up a special intellectual property (IP) court to deal with copyright and other IP infringement cases. This will be particularly helpful in (addressing) end-user piracy cases that the BSA is focusing on," he told ZDNet Asia.

Asia has always been a hot breeding ground for pirated material, with piracy rates hovering consistently around the 50 percent mark. The problem could worsen as Internet penetration continues to grow, giving consumers convenient access to pirated software via Web sites and file-sharing networks.

Advani cautioned that Internet piracy is fast becoming a growing threat especially with increasing broadband penetration in Malaysia and the rest of Asia.

"Governments must have the relevant legislation and policies in place to combat Internet piracy," he said. Without strong copyright laws and enforcement of such laws, online piracy--via "warez" groups, spam, auction sites and P2P systems--will proliferate alongside Internet usage, he noted.

Besides initiating criminal and civil actions, Advani indicated that BSA has also formed a dedicated team to monitor sites offering pirated software. Where appropriate, notices are sent to ISPs to take these sites down.

"Malaysian consumers, especially companies and businesses, are responding and buying more legal software," he said. "Companies (both local and foreign) operating in Malaysia are definitely much more aware about the risk of using pirated and unlicensed software compared to five years ago."

Advani credits the Ministry of Domestic Trade and Consumer Affairs for having been relentless in improving Intellectual Property Rights protection in the country through implementing a mix of education and enforcement initiatives.

Offensive act
Under Malaysia's Copyright Act 1987, offenders including directors and senior management, can be fined from RM2, 000 to RM20, 000 for each unlicensed copy and/or face imprisonment of up to 5 years under Ops Tulen 2005 Korporat.

For K C Loke, executive director of homegrown company Biztrak Business Solutions, piracy is still a real problem for both Malaysian and foreign software vendors, However, this varies in severity depending on the particular industry segment in which the company operates. Biztrak specializes in business management software and services for the small- and medium-sized business sector.

"By controlling our software distribution and through our license-key management system, we've kept the piracy of Biztrak software at a negligible level," Loke said. "We've not observed any significant increases in incidences of piracy of our software in recent years. In fact, there have only been a few reported cases so far."

"Consumers buy pirated software usually not because they can't afford (legitimate copies), but because they don't believe in paying for software," he said. "They also think they can get away with it. Once we address these wrong perceptions, the issue will disappear."

Loke agreed that having different licensing schemes--offered by software companies--to which cater for different segments would certainly help.

For Adobe, the problem of piracy is best tackled through education rather than through price manipulation alone.

"We make our products as affordable as possible and even offer discounted versions of our popular software solutions to students," explained Tan Wee Ling, marketing manager of Southeast Asia, Adobe. "However, we believe that prices can only fight piracy to a certain degree."

Customers should know that they get a better, more reliable product when they use original software, she added.

"Making people understand the business and social implications of piracy, how it affects their country and them as individuals, will slowly but surely, help us to fight piracy."

Tan declined to comment when asked whether Adobe's losses due to software piracy have improved last year.

Cordelia Lee is a freelance correspondent who is based in Malaysia.