Piracy plunders
By Marcy Magiera -- Video Business, 2/16/2007
FEB. 16 | Just a couple of weeks after the International Intellectual Property Alliance, led by the MPAA, made its case in Washington about the importance of copyright industries (representing $819 billion in “core” businesses and $1,388 billion more broadly when activities like retail are factored in) to the U.S. economy, Los Angeles has made the issue a local story.
The Los Angeles County Economic Development Corp. last week released a study making the case that piracy of movies, music, prescription drugs and other products in nine “at risk” categories cost the county more than 100,000 jobs and the companies that manufacture those products about $5.2 billion in lost sales in 2005. (The figures represent the loss to companies in Los Angeles, irrespective of where the piracy takes place.)
Pirated motion pictures represented more than half the loss, at $2.7 billion, followed by music at $851 million.
Further, LAEDC said the black market in pirated goods diverted $2 billion from legitimate retailers in L.A.—an amount equal, by the agency’s estimates, to the average annual sales of about 39 Wal-Marts or 54 Target stores.
There is an overlap between the $5.2 billion lost by manufacturers and the $2 billion retail loss, with LAEDC using pirated Disney DVDs as an example of a product that caused losses to both a local product supplier and local retailers.
Mayor Antonio Villaraigosa himself lamented “wages lost for the hardworking families that make the Los Angeles entertainment industry the envy of the world.”
(Hardworking families are not the image most associate with the business of Hollywood, but I can attest that the mayor paints a fair picture, living as I do, in a middle-class neighborhood with its share of writers, grips, animators, production managers, effects creators, film editors and others who make a living in entertainment.)
Ironically, the day after the LAEDC report was released, a story appeared in the Wall Street Journal about Hollywood’s thinking on copyright protection in the aftermath of Apple CEO Steve Jobs’ recent open letter urging that digital music be distributed free of copy protection.
Some Hollywood execs believe it’s only a matter of time before the debate moves to removing copyright protection on digital copies of movies as well, according to the Journal.
At issue are the studios’ desire for strong digital rights management to defeat piracy and protect profits and the growing consumer demand to access entertainment when and where they want to—including being able to move the content to multiple and various devices.
One line of thinking goes that consumers should be able to do what they want with digital copies—including burning unlimited DVD copies, because by the time the movie appears in the DVD/download window, it has already been widely pirated from its theatrical release.
Likely sad, but true, as the LAEDC has chronicled. More importantly, in the long run, is that the lines between counterfeit and legitimate may continue to blur.
