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Hollywood Says Piracy Has Ripple Effect

ColinPL writes to mention a Washington Post article about a new study backed by Hollywood on intellectual piracy. The study, which they're presenting to lawmakers today, claims that piracy has a ripple effect on the economy. According to the study, lost revenues may have as much as three times the impact previously imagined. From the article: "Lawmakers and federal agencies such as the Justice and State departments have helped Hollywood battle physical piracy -- specifically, counterfeit DVDs. But now the stakes are especially high for entertainment companies as they sell more of their products online in the form of digital songs, movies and other intellectual property. Internet piracy may be tougher for lawmakers to conceptualize, entertainment companies fear."

30 of 309 comments (clear)

  1. Wrong word... by WickedLogic · · Score: 3, Insightful

    I think the word Hollywood is looking for is *hoodwink*.

  2. Not really much of a surprise... by Gadgetfreak · · Score: 4, Insightful

    *Everything* has a ripple effect on the economy. That's why it's called "the economy" as a whole. You can't expect a noticeable shift in traditional cash flow to not have at least some sort of chain reaction or reactions elsewhere.

    --
    "No fair, you changed the outcome by measuring it!" - Professor Hubert J. Farnsworth
    1. Re:Not really much of a surprise... by mlmitton · · Score: 4, Insightful
      It's sillier than that. The money that would have paid for all the popcorn and ushers doesn't disappear; it just doesn't go into the entertainment industry. Consider the extreme case: everyone pirates all movies. Here, the entertainment industry will disappear, but the video game industry (or tourism, or books, or whatever you want to put here) *grows*. These "ripple effects" are straw men designed to get society to think it impacts them. There would be a negligible impact on GDP or taxes.

      The more technical detail: it's the difference between a partial equilibrium and a general equilibrium model of the economy. In the partial model (the supply and demand curves we all know and love), you assume that you've completely modeled all relevant aspects of the economy, or rather, you assume nothing else matters. It's an incredibly useful approximation in many cases, but an approximation all the same. In general equilibrium, everything (theoretically) gets modeled--all the goods remotely related to entertainment, income, where income changes get spent, and so on.

      The idiocy of these "ripple effect" arguments is that they're using partial equilibrium to derive general equilibria effects! In other words, they're using a model that assumes nothing else matters to draw conclusions about the very things the model says doesn't matter.

      --
      "My girlfriend's got sodium laureth sulfate hair."
    2. Re:Not really much of a surprise... by Technician · · Score: 3, Insightful

      *Everything* has a ripple effect on the economy. That's why it's called "the economy" as a whole. You can't expect a noticeable shift in traditional cash flow to not have at least some sort of chain reaction or reactions elsewhere.

      Entirely true. The money spent on CD's, DVD's, Video Games, Movie tickets is not spent at Applebees, Disneyworld, Six Flags, US Forest Service, etc. The consumer has a limited income. It is either saved for retirement, spent on the requirements such as shelter, food, clothing, or entertainment. The expendible portion and it's ripple effect is a two way street. It makes a diffrence where the consumer spends the money. It is not a one way street of if the consumer spends the money or not.

      If the percieved value for the money is not there and there is a piracy way to acquire the music, Then the money will be spent on someting of tangible value such as a concert ticket or an I-Pod.

      --
      The truth shall set you free!
  3. Easy to make them conceptualize it. by krell · · Score: 4, Insightful

    All Hollywood has to do is change the language so words like "theft" apply to non-applicable situations such as copyright infringement. After they succeed at this, they can transmute the words arson, rape, and murder to describe it. Make sure "think of the children" is mentioned occasionally.

    --
    Where were you when the voynix came?
  4. Other things that have ripple effects. by Demon-Xanth · · Score: 5, Insightful

    Making crappy movies.
    Sueing your audience.
    Making your customers go through crap that people who don't pay don't have to go through.

    --
    If you think education is expensive, you should try ignorance -- Derek Bok, president of Harvard
  5. Um... by Pancake+Bandit · · Score: 5, Insightful

    This study recieved funding from NBC Universal and the MPAA. Why am I having a hard time taking it seriously?

  6. Ripple Effects... On DVD Purchases... by __aaclcg7560 · · Score: 4, Insightful

    I stopped buying DVDs since I'm never certain if the version out today won't be replaced by a extended version in six month and/or a gift box set next year. I want to spend my money only once. Not twice or thrice for the same product with extra features that should've been there in the first place.

    1. Re:Ripple Effects... On DVD Purchases... by ShibaInu · · Score: 4, Insightful

      So, when the new version comes out, your old version suddenly becomes unwatchable? Seems to be that whatever content you had is still there. The problem isn't that Hollywood does this, the problem is that people reward them by buying the stuff.

    2. Re:Ripple Effects... On DVD Purchases... by Satan+Dumpling · · Score: 2, Insightful

      I don't see what that has to do with self control. They rarely announce that the standard dvd comes out now, the extended directors cut comes out in six months, and the super collosal box set next year. They add stuff later to force those who really like the product to buy it again. Or con those who were on the fence and didn't buy the first go round to buy it now. If you want the best version, sometimes all you can do is buy again and Ebay the first one. Right now I'm putting off buying Underworld II because they got me with an extended Underworld I version 6 months later. I gave the old one away...

    3. Re:Ripple Effects... On DVD Purchases... by Monkelectric · · Score: 2, Insightful

      It's essentially a penalty for being a fan.

      --

      Religion is a gateway psychosis. -- Dave Foley

  7. Re:The entire movie industry by TubeSteak · · Score: 5, Insightful
    The entire movie industry is sooo small economically wise it is rather pathetic they have as much pull as they do...the candy industry is about 10 times the size
    FTFA:
    "It's important to remember, however, that even though piracy prevents money from reaching the movie industry, those dollars probably stay in the economy, one intellectual property expert said."

    Translation: It doesn't really matter if they take their made up number and multiply it by three. The economy wasn't hurt.
    --
    [Fuck Beta]
    o0t!
  8. Another broken window argument by Colin+Smith · · Score: 4, Insightful

    Hmm, perhaps the memories of the members of parliament, senators, congressmen and women should have their memories refreshed.

    In fact, it's the pirates who benefit the economy most, they produce the goods at a far lower cost, the benefit is far and wide, what is saved on music and videos can be spent on more important items.

    --
    Deleted
  9. Study finds need for more studies by sinij · · Score: 5, Insightful

    Hollywood study finds that Hollywood deserves more money. Big surprise?

  10. Consider the ripple effect of DRM by fwittekind · · Score: 2, Insightful

    Which has a worse effect on the economy? Think about it for a sec... It increases costs of R&D of consumer electronics, it delays to market consumer electronics. It makes so only a select few can market products that will play the content. It makes the hardware more expensive. It decreases the size market that might buy the content.

  11. Re:This Is Disgusting by Luscious868 · · Score: 4, Insightful
    UNDERSTAND THIS YOU ARROGANT, GREEDY BASTARDS, /no one/ wants to fucking download your DRM'ed/non-DRM'ed bullshit movies and music.

    Is that so? From a recent press release:

    The iTunes Store also features the world's largest catalog of online music with over 3.5 million songs and has sold a stunning 1.5 billion songs, making it the world's most popular digital music store.

    Just because the Slashdot crowd doesn't like something doesn't mean that average consumers have the same view. Get over yourself and UNDERTAND THIS, the RIAA and MPAA don't give a flying fuck about what you think. You are not their target customer.

  12. Re:The entire movie industry by Znork · · Score: 4, Insightful

    "The economy wasn't hurt."

    Actually, quite the opposite. Considering that the IP industries are particularly inefficient in their production as protected entities, the economy as a whole _gains_ from the failure to enforce their monopoly priviliges.

    Piracy means the economy as a whole gains _both_ the wealth inherent in an extra copy of a certain material for the particular consumer _plus_ the wealth inherent in whatever else the money is spent on.

    Translation: The numbers made up by the industries are completely irrelvant, IP is merely a method of redistributing wealth to achieve a specific purpose, similar to taxes, and as such the only interesting measure is wether a) the money actually goes to it's intended recipient and b) wether it's an efficient use of resources.

  13. Re:Why is "the Economy " the Government's #1 Conce by db32 · · Score: 1, Insightful

    Not that I disagree with your conclusion, but your reasoning is terribly faulty. If our economy tanks...we go into a depression...and while yes the corporations did lose alot of money...they lost it because the PEOPLE were struggling to stay alive. So the state of the economy is a terribly important thing for the government to worry about, in fact, that really was the main purpose for our government even existing, to manage interstate commerce of our united states (USA isn't just some catchy acronym...it actually used to stand for United States of America...as in a group of independent states working together). I am more concerned why they are so worried about all this other garbage that really has no place in government instead of the state of our economy (which is pretty shakey from a peoples perspective) but not terribly shakey for the global corporation. When you can make stuff for pennies in China and sell them to "rich" by comparison americans...your company is doing great, but the American economy is going to suffer due to the displacement.

    --
    The only change I can believe in is what I find in my couch cushions.
  14. Read the study? by Americano · · Score: 4, Insightful

    I'm sure that everybody was far too busy thinking up cute "+5 Funny" comments to go out and actually take a look at the actual study... but for anybody who's perhaps interested in formulating a defensible position on the matter based on facts rather than groupthink, the actual publication is available here.

    For a bunch of geeks, I'd think that doing a bit of research & gathering the facts before reaching a conclusion would be the *first* thing you'd do when trying to combat what you decry as a campaign of FUD & misinformation. Sarcasm isn't going to win the case in a courtroom, or in Congress. Deconstruct their argument & their methods. Show their assumptions & conclusions to be faulty.

    1. Re:Read the study? by jay2003 · · Score: 2, Insightful

      The study is really thin on facts. The methodology of computing the the losses are computed is NEVER discussed. As I posted above, these studies almost always make the assumption that if piracy were stopped, those who pirated copies would be willing to buy the content at the prevailing legal price. That assumption alone which is absurd means the study is best used for toilet paper.

      The study mentions that restrictions of on the number of foreign made films (20 per year) in China drives piracy but then has the gall to claim that producers are losing billions on piracy in China even though it is NOT possible by the study's own admission to increase legal distribution in China.

      Finally, the study makes the ridiculous claim that giving more money to the movie industry leads to more production of content. I see no evidence in the study that this would be case. Hollywood prefers a small number of high budget blockbusters. Addtionally, creating entertainment is not "investment" in an economic sense in the economy. It's consumption. If the pirate buys an iPod with the money saved from piracy, I fail to see to see that form of consumption is inferior in an economic sense to giving the money to the movie industry.

  15. how it's always worked by Eil · · Score: 3, Insightful

    Internet piracy may be tougher for lawmakers to conceptualize, entertainment companies fear.

    Feh! Like's that's ever been an obstacle in the past...

    MPAA: Mr. Lawmaker, Internet Piracy of our copyrighted works is bad. When everyday people decide that they can download movies illegally without fear of repercussion, we find that sales plummet, the industry suffers, and the culture as a whole is significantly damaged.

    Lawmaker: Eh?

    MPAA: We're hemorrhaging money thanks to Intarwebs!

    Lawmaker. Oh.

    MPAA: And you see, accounting has this weird thing where our profits are directly linked to the campaign contributions that we make to you.

    Lawmaker: And what would you like your new law called?

  16. Re:Champions of morality... by Travoltus · · Score: 4, Insightful

    They've undermined the authority of parents by luring their children into their culture of natural born deviancy (and now complete and utter stagnation), and especially, they've been encouraging kids to be rebellious.

    Now that rebellion has returned home.

    Hollywood can boo hoo hoo all they want to, but the truth is, you always reap what you sow.

    --
    --- Grow a pair, liberals... stop letting the Republicans bully you!
  17. Re:More on the Study by deathy_epl+ccs · · Score: 2, Insightful
    Despite that, the MPAA does exactly what the RIAA has been doing with its plethora of lawsuits aimed at filesharing instead of targeting counterfeiters.

    Easier to crea... collect evidence and pursue... heck, none of them have to leave their offices to do it, whereas somebody selling physical disks, ya gotta actually catch 'em at it, get 'em to sell you a disk or 3, and so on. File sharers, ya just gotta show some screenshot of your computer with some names of songs on it, point your finger, and yell real loud.

  18. SO! They admit it!!! by erroneus · · Score: 3, Insightful

    According to the study, lost revenues may have as much as three times the impact previously imagined.

    If nothing proves they are imagining things more than this, I haven't seen it. Doesn't this statement indicate their losses are imaginary and that these new estimations are three times as imaginary?

    I hate to say that it's time for another law but I think there should be "rules and ethics of evidence" introduced into law. Such a law would state that any studies submitted to the senate or congress must have, at the very least, an impartial study to balance out the claims of special interests. We all know how stats and studies can be twisted into outrageous lies and exaggerations. It's time we start disallowing such crap on a regular basis. If these special interests are willing to fund their own studies as evidence for a need for legislation, then they should also be willing to have another study made as ordered by the legislative commission that will be reviewing the information. It would seem like a natural extension of our other fair and balanced matters of law such as in the case of evidence presented in a court.

    I'm sure I'm not the only one who's tired of the lies, damned lies and statistics given as evidence to write new laws. And while we're at it, let's stop the dairy companies from recommending our RDA of milk that seems to go up at every opportunity. Talk about conflicting interests.... and oil companies denying global warming? Enough already!

  19. Re:Sorry, but there is a problem with this reasoni by TubeSteak · · Score: 2, Insightful
    The dollars "stay in the economy" but are saved. ... Dollars that aren't moving within the economy aren't as useful to economic growth as dollars that do.
    Unless those saved dollars are sitting under your mattress, they are moving within the economy.

    When you put money in the bank, the bank invests it.
    In theory, this generates returns on investment (ROI).
    If ROI > the interest the bank pays you, everybody wins.
    --
    [Fuck Beta]
    o0t!
  20. intellectual piracy? by DragonTHC · · Score: 2, Insightful

    They're continuing to make shit up that suits them. Intellectual piracy is buying an ebook of Dostoevsky from a street bazaar in hong kong. Intellectual property is such that it can only be covered by patent. Copyrightable works are not property, unless you count my DVD collection. Those are my property. But, apparently, a property which I don't have any rights to. If it's intellectual property, then that implies it's not copyrightable. Which is it, a product or a license? If it's a license, I'm going to trade in my 60 or so VHS tapes for the DVDs. I'm tired of buying the White Album again. If it's a product, it's not copyrightable and, therefore, not covered under the bought and paid for laws like the DMCA.

    The **AA wants their cake and your cake and make you watch them devour both.

    --
    They're using their grammar skills there.
  21. They'd had to let Conservatives rip hollywood off by unity100 · · Score: 2, Insightful

    Back in the 20es when they were stamping on hollywood's "liberties" about making socially controversial films.

    See, today the opressed became the opressor, and this time the opression is not for what is right or wrong, but for MONEY.

    Just when are you going to die out, 55+ generation ?

  22. Re:Quite the contrary by Anonymous Coward · · Score: 2, Insightful

    Never mind the fact that employers and the government directly benefit
    from millions pre-trained IT workers competent in 100+ software packages, and you can bet your bottom dollar 99.999% of these have breached copyright to gain decent competency levels. Double standards alive and well.

    Very rich, that black hats are considered used goods, yet the white hats who proclaim experience on X Y and Z - well, they have already stolen and been dishonest, if they really believe black letter law.

    The US ecomony would be cripppled overnight if we arrested and gave criminal records all these experienced people who never actually bought whatever, and who had unlicenced whatever at home.

    As for the ripple effect.. right. Every dollar spent on discs, media, paytv, means people on their asses in front of a TV screens, not working or flipping burgers or selling drugs. Instead the money was spent on health, childcare, education, housing or auto - all with greater GDP and job creation multipliers that hollywood.

    Just take the numbers the RIAA *claim*, divide that by number of households (which would be more than the oil/gas money hike), and you would see if they got their wet dreams, the economy would tank, and malls, auto and housing would suffer even more.

    The politicians do not act, because if the unemployed and low end menials/trash were denied mind numbing TV pacification, they might get see sunshine, up and vote out the shitheads who took away their remote controls.

  23. Re:Exactly. They can't have both. by Anonymous Coward · · Score: 1, Insightful

    I must say I've never ever bought a single DVD,CD or Video in my entire life. Never been to see a single movie or use pay-TV. I really don't see the point so I don't. So now that I'm DLing this stuff, I really don't thing anyone is loosing out on anything from me anyway. Its not like as if they took away my internet tomorrow I'll actually start buy or renting movies.

  24. Study is an example of the BROKEN WINDOW FALLACY by Sir+Holo · · Score: 2, Insightful

    So, they extrapolated from their initial made up number, eh?

    This type of false logic is called the Broken Window Fallacy. Read it.