Copyright industries growing part of GDP

Report aimed at educating lawmakers about importance of protection

By Paul Sweeting -- Video Business, 1/30/2007

JAN. 30 | WASHINGTON—The core U.S. copyright industries accounted for an estimated 6.56% of U.S. gross domestic product in 2005, or $819.06 billion, up from 6.48% of GDP, or $760.49 billion, in 2004, according to a report issued Tuesday by the International Intellectual Property Alliance.

Those same core industries, the report said, were responsible for slightly less than 13% of the overall growth in the U.S. economy from 2004 to 2005.

Written by Stephen E. Siwek of Economists Inc., based on U.S. government economic data and other sources, the report is the eleventh in a series issued by IIPA dating back to 1990.

IIPA is a consortium of trade associations including the Motion Picture Assn. of America, the Recording Industry Assn. of America, the Entertainment Software Assn., and groups representing book, music and software publishers.

The group defines “core” copyright industries as those directly involved in the creation and distribution of copyrighted content, such as movie studios, record companies and book publishers.

The broader category of “total” copyright industries, which includes hardware makers, retailers, distributors and other operators whose products and services are related to copyrighted content, as well as partially intellectual-property-based manufacturers such as fabric, jewelry and toy makers, accounted for 11.2% of U.S. GDP in 2005, or $1,388.13 billion, according to the report. That was up from 11.09% in 2004, or $1,300.77 billion, in 2004.

The totals include only the estimated portion of the overall GDP contribution of those related industries that can be attributed to their involvement with copyrighted content, according to Siwek.

At a news conference here that served as the report’s formal unveiling, MPAA chairman/CEO Dan Glickman said the report was not intended to support any particular legislative agenda but was part of the group’s ongoing efforts to educate U.S. lawmakers and other public officials about the importance of promoting and protecting copyright-related industries.

“When I was a member of Congress, this is the sort of information I would use to help me understand an issue,” Glickman said, referring to his years as a Democratic Congressman from Kansas. “When the U.S. Trade Representative sits down to negotiate with China about IP issues, this is the sort of information she draws on. That’s why we do this.”

Apart from their contribution to the domestic economy, the core copyright industries contributed at least $110.8 billion to U.S. foreign sales, the report said, outpacing other export industries such as aerospace, auto sales and pharmaceuticals.

The news conference attracted several members of the House subcommittee on intellectual property, as well as Rep. John Conyers (D-Mich.), the chairman of the House Judiciary Committee, which oversees the IP panel.

Conyers said the popularity of U.S. copyrighted content overseas could play a “huge role” in framing U.S. relations with China and other emerging powers over the coming decades.

“One way or another, China is in our future, and we’re in theirs,” Conyers said. “The things that our copyright industries create is one way that people in other countries come to know us.”

With an eye toward domestic politics, the report notes that core copyright industries employed 5.38 million workers in the U.S. in 2005, up from 5.34 million in 2004. Total copyright industries employed 11.3 million workers in 2005.

“If we could see just a 10 percentage point drop in software piracy between now and 2010—just in the U.S.—it would add 100,000 jobs to the economy,” Business Software Alliance president/CEO Robert Holleyman said. “And that’s just for software. Imagine what we could do if we saw that kind of reduction across all of our industries.”

Holleyman and the other association heads brushed aside questions about whether efforts to protect copyright industries could impose costs and limit growth in other industry sectors, such as information technology.

Many in those industries complain that imposing excessive restrictions on the use of copyrighted programming inhibits innovation in their business, which ultimately harms the U.S. economy.

“In my 12½ years representing the interactive entertainment industry, I’ve been constantly amazed by the efforts of copyright Troglodytes who think we need to completely rewrite copyright law in this country,” outgoing Entertainment Software Assn. president Doug Lowenstein said. “It’s the same battle year after year, as if somehow the growth and the jobs that we’re creating are not a good thing, and we need to change the law to provide less protection. It just defies logic.”

Lowenstein said later he was not referring to particular individuals as “copyright Troglodytes,” but rather to “a class of people” who argue that copyright law is too restrictive and needs to be changed.