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Entertainment Products and Software

The progress in digital technology and the internet has resulted in the piracy of musical and film works in such proportions that it endangers survival of individual branches of the so-called creative industry, as one of the most dynamic economic sectors in the developed countries, including Croatia.

It is estimated that the piracy rate of film works in Croatia accounts for approximately 65%-70% of the total consumption of these works, which makes it obvious that the losses for this branch of the economy are rather significant.

Speaking of musical works, the piracy rate in Croatia via the internet exceeds 90%, whereas the one referring to classical black piracy is around 25%. Estimated financial losses for the musical industry, authors and performers are more than HRK 150 million a year. Furthermore, it is often neglected that there are losses incurred by the so-called grey piracy i.e. by using a work without an authorization, also amounting to millions of kunas.

Apart from causing financial losses to the creators of works and the supporting activity, high piracy rates in Croatia at the same time hinder the arrival of international services for legal usage (download) of copyright works.

Similar proportions of piracy affect the software industry as well. In 2010, commercial value of non- licenced software in Croatia reached HRK 389 million, and the software piracy rate stagnates at 54% for the fourth year now. Out of 24 countries of the Central and Eastern Europe (CEE), Croatia has the 6th lowest piracy rate; however, in comparison to the result within the European Union, Croatia has the 7th highest piracy rate.

Undeveloped markets are a driving force of software piracy. Piracy rates in the undeveloped countries are 2.5 times higher than the ones in the developed world, and commercial value of pirated software amounts to more than a half of the global amount in total.
Nonetheless, it is not only industries based on copyright that generate losses on the account of piracy – according to the study from 2007, made by a methodology of the World Intellectual Property Organization, these industries generate an annual GDP of 4.3% in Croatia - it is also the state budget i.e. the entire population that loses significant funds. Just for the sake of comparison, it needs to be pointed out that e.g. hotels and restaurants together, according to the same research, generate an annual GDP of 3.59%, and education around 4.5%.