US gov cries foul on MPAA piracy claims
A Mickey Mouse operation
That massive amount of money that business groups such as the Business Software Alliance (BSA) and the Motion Picture Association of America (MPAA) claim is being lost due to piracy and copyright infringement? Well, fuggedaboutit.
Such is the conclusion of a 37-page report (pdf) by the US Government Accountability Office (GAO), the independent, nonpartisan agency that, as its mission statement explains, provides the US Congress "with timely information that is objective, fact-based, nonpartisan, nonideological, fair, and balanced".
The GAO report, entitled "Intellectual Property: Observations on Efforts to Quantify the Economic Effects of Counterfeit and Pirated Goods," was commissioned by the US Congress in October 2008 with the passage of a bill with a convoluted title that reveals the viewpoint of the bill's sponsors: the Prioritizing Resources and Organization for Intellectual Property Act of 2008, or the PRO-IP Act - a bit of acronymage that follows the great American tradition of crafting legislative acronyms that carry not-so-subtle messages (cf. the USA PATRIOT Act).
The report acknowledges that the protection of intellectual property is a good thing: "The importance of patents and other mechanisms to enable inventors to capture some of the benefits of their innovations has long been recognized in the United States as a tool to encourage innovation."
It also goes out of its way to recognize that piracy and copyright infringement do, indeed, have negative effects upon US companies and citizens. However, the report does take issue with the damage figures being bandied about by business groups that seek to tighten intellectual-property enforcement.
Specifically, according to the GAO: "Three widely cited U.S. government estimates of economic losses resulting from counterfeiting cannot be substantiated due to the absence of underlying studies." It's worth citing the GAO's comments on those three studies in full:
First, a number of industry, media, and government publications have cited an FBI estimate that U.S. businesses lose $200-$250 billion to counterfeiting on an annual basis. This estimate was contained in a 2002 FBI press release, but FBI officials told us that it has no record of source data or methodology for generating the estimate and that it cannot be corroborated.
Second, a 2002 [US Customs and Border Protection (CBP)] press release contained an estimate that U.S. businesses and industries lose $200 billion a year in revenue and 750,000 jobs due to counterfeits of merchandise. However, a CBP official stated that these figures are of uncertain origin, have been discredited, and are no longer used by CBP. A March 2009 CBP internal memo was circulated to inform staff not to use the figures. However, another entity within DHS continues to use them.
Third, the Motor and Equipment Manufacturers Association reported an estimate that the U.S. automotive parts industry has lost $3 billion in sales due to counterfeit goods and attributed the figure to the Federal Trade Commission (FTC). The [Organisation for Economic Co-operation and Development (OECD)] has also referenced this estimate in its report on counterfeiting and piracy, citing the association report that is sourced to the FTC. However, when we contacted FTC officials to substantiate the estimate, they were unable to locate any record or source of this estimate within its reports or archives, and officials could not recall the agency ever developing or using this estimate.
Simply put, the GAO's fair and balanced investigation into these claims of damages discovered that they were - not to put too fine a point on it - indefensible.
Next page: A Mickey Mouse operation
Surprised that a branch of the U.S. government has displayed some common sense, and actually publicly admitted what we've known all along? Why yes, as it happens, I'm very surprised indeed.
After Battlestar Galactica finsihed its run, I really wanted to get the soundtrack to season 4. So I looked around for months after it finished airing to find it would come out on a specific date - January last year IIRC.
When the date came, I searched on Amazon and found it - I could pre-order it - it was $16.99. $16.99, i thought? That can't be right - I live in the UK. Oops, I'm on .com instead of .co.uk. Silly me!
So I went to amazon .co.uk and searched for it. Sure enough, it was there - albeit with a release date 1 month later and the price was £27.99.
Nearly 3 times the price (once currency conversion was taken in to consideration plus the conversion fee of course), and released a month late?
So I went to .com again and tried to order it from the US. But I wasn't allowed to because "this content is not available in your region" and gave me a helpful link back to the UK websites.
So I downloaded it for free v0v
I was quite willing and prepared to buy the damn music with real money - money that'd go to the studios - that's why I was on amazon to begin with.
But then I thought fuck you, when I thought about it.
If they hadn't tried to fuck me over with the pricing and the wait, they'd have got some money, but now they don't, and I have the music.
They do this to themselves.
Every side shouts from their own standpoint of motivated self interest
I buy CD's/DVD's/Games etc, where I believe they represent good value for my hard earned money and where I have an understanding of the content and of it meeting my tastes.
I use many factors in determining what meets my taste, and one of these is the opinion of friends. Some of those slate some products and I will as a result avoid them, others recommend and I may therefore spend.
In my opinion, most of the above products when first released are rarely worth the price they are marketed at: £12.99 for a CD; £17.99 for a DVD; £45 for a game. So I often wait just 3 months and see prices plummet. If you wait 12 months, the prices plummet further.
The record industry often said since the 1970's things such as: home taping is killing the industry/CD's are expensive to produce/We change a fair price that the market is prepared to pay. All of these are untrue. Home taping has gone and the record industry is still here; CD's earned the industry both more as a % of sale price and more in terms of £ per copy that either records or tapes ever did; the advent of torrents has simply served to more openly demonstrate that the market is not prepared to pay the prices being charged. Only a small percentage of the market is content with the existing price structures.
What we appear to have is a series of industries which managed a long time ago to create a cash cow: Little effort and a lot of profit. I suspect that the majority of creative people by their nature are not structured thinkers in terms of contract negotiations and long term market views. The industries that are supposed to however are. The result is that with an exception of a few creatives, the majority are screwed over and receive a far smaller percentage of sale revenue that in my opinion they should.
I think that like many people, I would love to be able to pay the artist directly in order to receive the product of their creativity. Slowly (far too slowly) this is starting to be possible, however the Music/Film industries are railing against this and unfortunately have the money/power to influence people to support their continued existence.
At present an average artist (music) I believe gets around 11% of the sale value of a CD/song/mp3 or whatever. If they could receive let's may 50% for example, with the seller and a middle man making up the rest, then to get the same earning as they do now, they could in theory reduce the selling price from99p per track to 20p. I'm guessing that if the cost of music changed that dramatically, they'd sell one hell of a lot more and a great number of those currently obtaining music for free would be encouraged to pay for at least some music.
I don't think we can address this overnight, but we must beat down the entrenched and out of date positions of scared industry middle-men in order to both support creatives and ensure the market if offered products which genuinely represent value for money.