15
Jul 2009

The Math of the War on Piracy

It seems now that no one can escape hearing about how piracy is bad, it hurts our economy, and puts movie workers out of jobs. Two numbers are usually quoted, 750,000 jobs lost and 250,000,000 dollars lost in the US economy. These are very interesting (and inaccurate) numbers.

First of all, lets look at the jobs lost. The advertising you hear never says if the jobs lost is an annual or cumulative total which destroys its integrity. It also fails the common sense test. Can you imagine that three quarters of the population of Manitoba is unemployed due to piracy? I can't.

Secondly, the dollar value bears examination. You can't say that 250,000,000 has vanished from the US economy - no, people are just spending or saving it elsewhere. While the entertainment industry may be losing money, the food or automotive industries may be getting that extra income.

ARS Technica has a great article entitled 750,000 lost jobs? The dodgy digits behind the war on piracy that goes into depth actually trying to find the sources of these numbers. Generally, the numbers date from wild predictions made in the 1980's which have been brought forward and indexed for inflation - not exactly accurate.

Comments

As much as I hate the term

As much as I hate the term "intellectual property" and all this copyright hullabaloo, there is something to be said about the negative effects of piracy. Movies do cost a lot to make (I used to work in a visual effects shop and it takes a lot of man hours to do even the simplest things) and when people don't pay for that, things could suffer. However, I think that actors are highly over paid considering the amount of work they do (voice actors for video games are starting to demand higher wages now too (see lead actor for GTA4), which is saddening) and movie tickets are more expensive than I'd like. Also, they technically aren't losing money through piracy, they simply aren't making money off of views, which is a subtle, but significant difference. In fact, it is entirely possible that they are making MORE money due to piracy as word of mouth spreads faster with these illegal viewings (case in point, the new X-Men: Wolverine movie or the Battlestar Galactica TV series). Also, there is not a chance that anyone could afford to pay for all the movies they see illegally, so there is no way that the movie makers would be able to make the kind of revenue they claim they have lost due to piracy. The only way that piracy can truly negatively affect the industry is when people bootleg the film (download, cam, whatever) and then resell it to individuals, whether they know they are buying a fake or not. These sales put money in the pockets of the pirates instead of the movie makers, which I do agree is a bad thing. In North America, this tends to not be that big of a problem, but I think overseas there are a lot more bootleg movies being sold. This could account for the dent in the US economy as the goods (ie movies) are being received by the foreign country but the payment is going to the foreign pirates instead of being returned to the US.

The people who purchase these kind of movies, as far as I can figure, must either have no idea how to download the content they want, have no means to download the content, or are just wanting to avoid the small effort required but don't want to pay sticker price (or some combination). I think a different pricing scheme or delivery method might be able to combat this, but it is really hard to say.

I would keep rambling about this stuff, but I think I have monopolized this blog entry enough as it is. There is so much that could be added when you add in music and software piracy to the equation, but a lot of these key points overlap. Bottom line: I don't think piracy is that big of a problem (and back in high school I was a bit of a piracy advocate). Having said that, I try to minimize the amount of content I obtain through shady means and try to focus on the free (and often better) music and software available all over the place. Beyond that, if you can afford to support those who are putting their time and effort into producing things that you enjoy, support them financially so that they have incentive to keep providing the world with more quality work.

[...] year I mentioned an

[...] year I mentioned an article that debunks some of the outrageous statistics used by lobbyists fighting for stronger piracy [...]

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