How much do music and movie piracy really hurt the U.S. economy?

Freakonomics:

Supporters of stronger intellectual property enforcement argue online piracy is a huge problem, one which costs the U.S. economy between $200 and $250 billion per year, and is responsible for the loss of 750,000 American jobs.

These numbers seem truly dire: a $250 billion per year loss would be almost $800 for every man, woman, and child in America. And 750,000 jobs – that’s twice the number of those employed in the entire motion picture industry in 2010.

The good news is that the numbers are wrong.

Read the article to see why the Freakonomics guys believe that.



3 thoughts on “How much do music and movie piracy really hurt the U.S. economy?”

  1. The issue is really that we can’t know the numbers. Because we have no clue how many sales have been lost. And generally the numbers are still okay so the pirates don’t really care about the notion of IP because they can’t see what they are stealing from anyone. 

    But ticket sales do affect people. Many lower levels in movie production get a cut of the profit and fewer sales means less coming to those folks, most of whom aren’t as lucky as the Tom Cruises and Brad Pitts who get their $30 million just to show up. 

    That said, and this is coming from someone who works in the industry, these laws aren’t going about it the right way. yes cutting off things like paypal and adsense are appropriate, why should these folks make money off of giving out others IP. Yes it is appropriate to make it harder to find such sources by cutting them out of the major search engines. But the wording of the bills and the lack of 3rd party oversight and due process sets up a system that doesn’t care about fair use rights etc. There may be totally legit reasons why a site has posted something that isn’t their IP and yet they could be cut off as pirates. 

    Also, the studios etc haven’t really been supporting legit downloading. They fall to recognize that downloads and streaming are the new thing and physical disks are on a slow way out (especially DVDs). They need to stop with stunts like telling Netflix they can’t stream a movie until 3 months after the DVD is on sale. They need to stop holding back Hulu, iTunes and Amazon TV until the DVDs for the season are out. They need to stop having temper tantrums over VOD rentals being starting a month after the theatre release (when most titles aren’t making noticeable ticket sales anyway). they need to make those iTunes Extras match the disks and make the quality of the video better (720p should be the start these days) for all movies and TV. put in the CC etc. And rethink their prices. And the networks would do well to announce that they will start counting things like hulu as viewers and iTunes etc sales into the budget make good along side the ratings. Then those that pirate tv shows they could be viewing through such means might think twice because they could count towards the show actually continuing

  2. Advocates of protection for copyrighted works have been done a terrible disservice by the ridiculous numbers routinely trotted out by the vested interests. Yes. The age of digital information requires stronger protection for IP, but the loss claims made by the likes of the RIAA and MPAA are simply insane.

  3. Ben Goldacre covered this kind of thing nearly three years ago WRT the UK equivalent numbers.
    http://www.guardian.co.uk/commentisfree/2009/jun/05/ben-goldacre-bad-science-music-downloads

    Which was around the time we had a key politician smooching time with billionaire record exec and film producer David Geffen 
    http://www.dailymail.co.uk/news/article-1205280/Peter-Mandelson-demanded-Deputy-s-title–But-thwarted-Britains-civil-servant.html 

    Coincidence no?

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