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."

Comments

Coming soon to a head near you

[aztektum]

Eye implants, ala Minority Report. Only instead of just targeting you with advertising when you go somewhere, they also dictate what digital media, books, magazines and lazer light shows you can view. If you paid your fee you can see for the day.

The entire movie industry

[Tweekster]

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

Re:The entire movie industry

[DamnStupidElf]

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.

Ah, but things like "the economy as a whole" don't actually exist, and the government certainly does not consider the good of "the economy" when it makes decisions. What the government really wants is low inflation rates, high tax rates, and high net income to apply the tax rate to. It's much more efficient for the government if money is shoveled through a few rich hands who pay their taxes on it and/or have it for lobbying purposes than if the money circulates in small local economies with little tax revenue skimmed off the top. Black markets and tax evaders have always been the bane of governments despite their obvious market efficiencies. You also have to remember that the government is composed primarily of upper middle class to filthy rich individuals who have a vested interest in the status quo of money flowing up the economy to the top.

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.

The music and movie industries are basically acting like drug lords whose customers have suddenly figured out how to grow their own drugs safely and cheaply, even to the point of harassing and threatening their own customers and fighting anyone else who tries to sell on their turf. They've spent decades hooking everyone on their product, and they're used to the cushy income. It's a rather apt analogy, if I do say so myself. The only difference is that what they're doing is technically legal.

Re:More on the Study

[TubeSteak]

"According to the L.E.K. study, 38 percent of all movie piracy occurs on the Internet, with counterfeit DVDs accounting for the rest."

Caption of the picture:
Pirated-movie distribution operations such as this one in New York mean a loss to industry of about $20.5 billion per year, lost opportunities for about 140,000 new jobs and $800 million in lost tax revenue, the study says. (Recording Industry Association Of America Via Associated Press)

60% of piracy has NOTHING to do with the internet
XYZ x 60% = ~$20.5 billion

Despite that, the MPAA does exactly what the RIAA has been doing with its plethora of lawsuits aimed at filesharing instead of targeting counterfeiters.

Champions of morality...

[CrazedWalrus]

...now that immorality is hurting them. Is this the same Hollywood that has been overtly hostile to people who insist that there is such a thing as right and wrong? Piracy is just one of the many effects that Hollywood's fuzzy morality is having on society, and it happens to be the one that's directly biting them in the ass. I don't feel a bit sorry for them. In the various ways they've attacked traditional values over the years, I can't help but wonder how they didn't have the foresight to expect their current predicament.

-Walrus

Commercial copyright falling in value ?

[quiberon2]

Now that anyone can record a song (that they wrote themselves) in their own home and distribute it over the Internet, isn't that going to reduce the value of the commercially-produced ones that the 'labels' make ? In effect, the 'control of the distribution channel' is gone, and we will be flooded with potentially-brilliant music for free (as advertising for band concerts, or as hobby).

To a lesser extent, it must be true of films, too. I don't think many individuals are capable of producing 'Star Wars' at home; but maybe some collaborations are.

Who Wants to Copy this Stuff??

[mrs clear plastic]

There has been nothing worth copying! The stuff they put out is so pathetic that I would not want to waste bandwith copying.

I have not been to a first run flick for over 1 year. I have been seeing only 70's and 80's classics such as Blade Runner and Xanadu and James Bond.

Hollywood's product has really be very dissapointing to say the least. Perhaps Congress shall pass laws that dictate minimum quality to this stuff.

Luv

Hollywood Lies!

[pfz]

Any study that is backed by "Hollywood" (whomever that is), is nothing more than the movie studios and the guilds getting together to figure out yet another way to control technology. These are some of the most greedy corporate tools on earth! I was once told by a union executive that all the new technology is great because they can digitally superimpose products into scenes (that were not originally in the scene) and get more money from advertising. Forget art! We can sell more Doritos!!!

My hero and friend, Richard Stallman has a lot to say on the topic of piracy and "Hollywood" in the new documentary ALTERNATIVE FREEDOM. It also features Lawrence Lessig, Danger Mouse (of Gnarls Barkley and the illegal Grey Album) and and others...

Buy a copy to support the folks out there who are trying to spread better information than "Hollywood."

http://alternativefreedom.org/

Being from a 3rd world country...

[Metroid72]

I can see the effects of a mini economy around Piracy.

The Hollywood leakers, plus the illegal dubbers in South America combined with the rouge servers provide an avenue for people with burners at home that can go and sell this pirated content in flea markets and feed their families. It happens with books, music and other stuff....

Is it illegal and bad? YES....

So is WAR... (and it seems to fuel economies too...)
Read: http://www.amazon.com/Political-Economy-Recent-Eco nomic-Thought/dp/0792383109/sr=8-2/qid=1159566373/ ref=sr_1_2/104-5959278-4596701?ie=UTF8&s=books

Oh well...

Re:It's still a loss

[Sarisar]

But perhaps someone else will work that extra shift. I'm assuming that company isn't just letting people work for the hell of it, there must be the extra work available and someone else will probably do it (and lets not go down the whole 'but if everyone thinks someone else will do it' route). They will then get the extra cash to spend on something, which props the enconomy up by the same amount.

However if a foreign worker does it and sends the money 'back home' then that money is lost out of the countries economy. Although of course it props up the other country.

On a (semi-)related note. My father was reading Henry Fords biography and he (Ford, that is) said in it, if companies pay a good wage, then the employees have more cash to buy more stuff and that helps the economy out. In his case, his car workers spend more in other shops, which then hire more workers / pay more shifts which allow more of them to buy a new car which helps out the car manufacturers.

I still think the whole world is too obsessed over money, but I can't think of a good way around it. If we end money then you end up back in a feudal farming world... anyone got any good ideas on how to sort that out?

Re:Read the study?

[Kjella]

It's not so much what it actually says, but the whole point is misleading. If I stop buying chocolate, I'm not only hurting the retailer, but the distributor, importer, producer and right down to the guy picking the cocoa beans and the local pub where he goes to take a beer. On the other hand, if I buy mints instead, I not only help the retailer, but the distributor, importer, producer and right down to the guy on the factory floor and the local pub where he goes to take a beer. Almost every cent except those who go into directly consumed goods like fertilizer for the crops or fuel for the transport is being put back into the economy.

Now, for their claims that the movie industry would be so much bigger without piracy that there are in fact actual circular effects of significance, it relies on their entirely flawed claim that piracy == lost sales. One of the most basic economic concepts is the price-quantity curve, which is a down-sloping curve that says what you can sell at a given price. Every economist agrees you can't sell outside the curve, it's impossible. So you'll have a point (p_retail, q_retail) and (p_piracy, q_piracy) which is (high, low) and (low, high) respectively. Now, MPAA/RIAA love to claim it's possible to sell at (high, high) even though it's not. It's impossible even for a monopoly, it's impossible with perfect price gouging - there's simply no way to extract more money out of a market than it's willing to pay. It's as stupid as Coca-Cola making a huge promo giving away a million bottles of free soda, and then making sales predictions that it'll sell at the same speed at retail price in stores. In theory you could make a market like that which is perfectly price insensitive, in reality there's not a single market in the world that works that way.

In short, one of their claims it pretty much bogus, and the other is claiming an effect on the general economy that will be offset by an equal and opposite positive effect on the general economy. They're overinflating their importance both what they are to the economy, and what they could be to the economy. But I'm sure the debunking arguments will never reach the ones that need to hear them.

Re:Sorry, but there is a problem with this reasoni

[Al Dimond]

For everyone to really win the interest the bank pays you must also beat inflation. Typical flexible savings/checking accounts don't have very good interest rates. You still win over stuffing it under your bed, of course, but typically if you really want to get a good return rate on savings you have to have enough money to make it worth it to pay the fees necessary for the kind of accounts/investments that will yield you a good return. Otherwise it's a big win for the bank and nothing for you. Takes money to make money, blah, blah, blah.