p2pnet view Movies:- According to Hollywood’s AFACT, Australians are robbing the movie industry blind, said a p2pnet post yesterday.

But the figures about job losses and economic impact are just plain wrong, said Glyn Moody in an email.

Here’s his Open post in the subject >>>

I’ve noted elsewhere that there is a major piece of FUD being put about by content producers: that piracy causes massive damage to a country’s economy. But as that post explained with regard to the BSA’s claims about the harm of software piracy, here’s the reality:

Reducing software piracy will not magically conjure up those hundreds of billions of dollars of economic growth that the BSA invokes, or create huge numbers of new jobs: it will simply move the money around – in fact, it will send more of it outside local economies to the US, and reduce the local employment.

The basic idea is really pretty simple to understand. When people make unauthorised copies of content or software, they save money. But that doesn’t mean they put it in a bank: human nature being what it is, that money is generally spent elsewhere in the local economy.

And yet despite the simplicity of this crucial idea, report after report seems to have difficulty grasping it. Here’s another [.pdf], this time on film piracy, put together by UK Ipsos MediaCT and Oxford Economics for AFACT (the Australian Federation Against Copyright Theft). The top-line “results”:

6,100 Full Time Equivalent (FTE) jobs were forgone across the entire economy (equivalent to more than six times the number of job cuts announced by Telstra in October 2010) including nearly 2,300 forgone directly by the movie industry and retailers. These impacts of piracy on employment persist as long as piracy persists.

Allowing for effects on other industries, some A$1,370m in Gross Output (Sales) was lost across the entire Australian economy.

This was equivalent to a loss of GDP of A$551m across the Australian economy – reducing national economic growth and Australia’s ability to invest in its future.

Tax losses are A$193m, representing money that government could employ for other social uses in areas such as education and healthcare.

What’s sad is that the report does try to make reasonable assumptions about piracy:

We do not assume that every pirate version equates to a lost sale.

We do allow for ‘sampling’ – those who see an authorised version subsequent to the pirate version are not treated as contributing to lost revenue. In fact, we make the very cautious assumption that no lost revenue results from piracy if any authorised version is seen subsequently.

We do allow for ‘over-claim’ – we apply a ‘downweight’ to those claiming they would have paid for an authorised version (had the pirate version not been available).

But this laudable attempt at rigour is completely undermined by the fact that nowhere in the report is there any recognition that all this “lost” money does *not* disappear, but is simply channelled elsewhere in the Australian economy, where it might actually create more jobs than it would if spent on films (because of revenue outflows to the US, and the fact that local money would be spent on more labour-intensive industries like retailing or catering.) Similarly, it *does* produce tax revenue for the Australian government, just from different sources.

“It would be far more conducive to producing an honest debate about the *real* effects of unauthorised copies on national economies if these key facts were included for a change; by continuing to ignore them, these misleading and one-sided reports amount to little more than industry propaganda”, Moody adds on Open.

And on BSA reports, if it “sounds too bad to be true” it “might not be true”, p2pnet has quoted Britain’s The Economist as saying, referring to numbers from another ‘piracy study‘ commissioned by the Business Software Alliance (BSA).

“The association’s figures rely on sample data that may not be representative, assumptions about the average amount of software on PCs and, for some countries, guesses rather than hard data,” it said.

“Moreover, the figures are presented in an exaggerated way by the BSA and International Data Corporation (IDC), a research firm that conducts the study. They dubiously presume that each piece of software pirated equals a direct loss of revenue to software firms.”

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p2pnet – Australians are robbing Hollywood blind, February 17, 2011
Open – The Economic Consequences of Piracy, February 17, 2011
p2pnet – Spain ‘ravaged’ by piracy!, June 1, 2010
piracy study – The Economist angers BSA, June 15, 2005

First they ignore you, then they laugh at you, then they fight you, then you win ~ Mahatma Gandhi

World War III will be a global information war with no division between civilian & military participation ~ Marshall McLuhan

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This entry was posted on Friday, February 18th, 2011 at 9:30 am and is filed under Movies. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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