The closer one looks, the more dubious the figures seem.
Speaking at November 2011’s American Film Market, the White House’s intellectual
property czar, Victoria Espinel — officially the U.S. Intellectual Property Enforcement
coordinator for the Office of Management and Budget — repeated the oft-cited
statistic that intellectual property theft costs the U.S. about $58 billion per year.
Given the scale of the problem, one might expect the movie business to have rock-
solid numbers on what piracy costs them. But the closer one looks, the more dubious
the figures seem.
“Obviously, the movie industry’s number is going to be somewhat suspect,”
says David Abrams, a fellow with the Berkman Center for Internet and Society at
Harvard University. “Even if a person downloaded a movie, it’s very hard to translate
that into, ‘And they would have paid $10.50 to see it.’ ”
It turns out that Espinel’s $58 billion figure covers IP theft as a whole — a far cry
from just film and television. It also comes from a source that would astonish
Hollywood liberals.
The figure originated in a 2007 report, “The True Cost of Copyright Industry Piracy
to the U.S. Economy,” written by economist Stephen Siwek for the Institute for Policy
Innovation. Just what is the Institute for Policy Innovation? Answer: A right-wing
think tank founded by Dick Armey, the former Republican congressman and nemesis
of liberals.
The MPAA’s credibility on piracy costs was hurt by a separate 2007 report it
commissioned that later proved riddled with holes. Among other things, it blamed
U.S. college students for 44 percent of the studios’ losses due to piracy. Shortly
thereafter, the organization that represents the major studios was forced to
acknowledge “human error” in its accounting, admitting students were responsible
for only 15 percent of domestic losses.
Despite errors like these, the report (prepared by international consulting firm LEK),
derived from statistics obtained in 2005, still is cited by the MPAA when it claims the
studios lose $6.1 billion or more annually to worldwide piracy. There has been no
new report.
As to when one will be conducted, Chris Dodd, the former U.S. Senator named chair-
man and CEO of the MPAA in March 2011, told THR last year: “We are planning that
report; it’s internal at this juncture. It shouldn’t be too long.”
An MPAA spokesperson said April 28 that no release date has been scheduled.
5/2/2012 by Stephen Galloway – The Hollywood Reporter