As I mentioned in a previous post, I kept a satire blog a while back that I plan on retiring. Here is another post from that blog that I really enjoyed writing.
A recent study conducted by the MPAA found that movie piracy (theft) caused $6.1 billion in annual lost revenue for the movie industry, a notable 75% increase over previous estimates. Today, we released the results of a new study that investigated the effects of movie piracy (theft) and indicates that losses to piracy (theft) are greater by two or three orders of magnitude of the MPAA’s most conservative estimates.
Our study concluded that piracy (theft) accounted for $704 billion of annual lost revenue for the movie industry and is only increasing. The study looked into who commits this terrible crime, the reasons for file-sharing (theft), and how much of an economic impact it causes.
As a general trend observed in the study, piracy (theft) was found most rampant among college students that were:
- Male
- Cheap
- Sexually dissatisfied
- Justifiably stupid
- Attended the University of Southern California (USC)
In the study, several strict scientific surveys were conducted to determine why thieves were so inclined to steal from the movie studios. Below is a sample of one of the surveys that addressed the motivation behind stealing:
From the choices below, pick the top reason you steal high-quality movies from the innocent and helpless motion picture industry:
- 75.34% chose:
I am a conscientious person, but there’s just not enough laws that indicate if file “sharing” (stealing) is illegal. Perhaps the DMCA should be revised to make this clearer. I would welcome clearer laws on file-sharing.- 24.5% chose:
The problem is that there is too much technology that makes it easy for thieves to come over and steal the excellent Hollywood movies from my computer. Unfortunately, my immoral younger sibling keeps installing the file-sharing programs while I’m at work. I would never share movies if illegal applications like BitTorrent were erased from the Internet forever.- 0.16% chose:
Movie tickets are expensive and the quality of films are decreasing. I am a reckless, violent thief, and I steal from the benevolent studios. I hate black people.It is assumed the survey had a margin of error of +0.16%.
The results of this question very clearly show the need for stricter laws against file-sharing and the obvious need to criminalize file-sharing programs. The results also indicate consumer support for such legislation, and also dispelled the notion that the quality or price of the films have anything to due with declining box office sales.
File-sharing over networks such as BitTorrent and Kazaa accounted for most of the losses. The studios lost an estimated $7340 per file sharer. This loss was estimated using the following breakdown:
- $12 movie ticket for the thief.
- $12 movie ticket of the thief’s date.
- $384 in movie ticket sales of the thief’s friends because the thief will share the file instead of recommending them to pay for the movie.
- $204 in movie rentals for each person mentioned above.
- $1190 in DVD sales from each person mentioned above.
- $5538 legal costs to prosecute the thief.
Note: The study did not take take into consideration the further economic damage the thief causes by clogging up the legal system and further crowding jails.
Since it is commonly known that Kazaa had users in the tens of millions, after complex statistical and economic analysis, it was determined that losses from file-sharing easily exceeded $100 billion. The final losses of $704 billion (in 2005 alone) were calculated by adjusting for inflation, adding interest, accounting for the growing number of households with Internet access, and applying the most probable and most widely assumed growth pattern for piracy — an exponential growth function.
The study predicted that losses due to piracy will easily exceed $2.5 trillion in 2006, and, if not quickly contained through prosecution of thieves and passing amendments to the DMCA, losses will spiral out of control in 10 years and will likely surpass the GDP.
The study recommends that to fight piracy, the following steps are made:
- Create a new secret law enforcement arm to deal specifically with copyright violators
- Create news laws to allow movie studios to monitor Internet traffic of suspected copyright thieves
- Further develop DRM technology to be even more secure and restrictive
- Launch a more aggressive anti-pirating campaign that helps label it as “uncool” (see the anti-smoking ads of the 90’s)
- Set jail time for file-sharing to 25 years to life
- File even more lawsuits against file-sharing thieves and demand even higher settlement payments
Due to potential revenue lost to piracy, most details and methodologies used in the study are confidential. This study is available at $7340 for a 14-day limited license. Each copy will be passworded, infused with DRM technology, and contain digital watermarks that will later be used to track and prosecute customers who violate the license by sharing the contents of this study with others. A new study on the effects of such types of piracy is currently under way.