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Hollywood Says Piracy Has Ripple Effect

Posted by Zonk on Fri Sep 29, 2006 03:25 PM
from the truly-important-research dept.
ColinPL writes to mention a Washington Post article about a new study backed by Hollywood on intellectual piracy. The study, which they're presenting to lawmakers today, claims that piracy has a ripple effect on the economy. According to the study, lost revenues may have as much as three times the impact previously imagined. From the article: "Lawmakers and federal agencies such as the Justice and State departments have helped Hollywood battle physical piracy -- specifically, counterfeit DVDs. But now the stakes are especially high for entertainment companies as they sell more of their products online in the form of digital songs, movies and other intellectual property. Internet piracy may be tougher for lawmakers to conceptualize, entertainment companies fear."
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  • Wrong word... (Score:3, Insightful)

    by WickedLogic (314155) on Friday September 29 2006, @03:27PM (#16250949) Journal
    I think the word Hollywood is looking for is *hoodwink*.
  • by aztektum (170569) on Friday September 29 2006, @03:27PM (#16250953)
    Eye implants, ala Minority Report. Only instead of just targeting you with advertising when you go somewhere, they also dictate what digital media, books, magazines and lazer light shows you can view. If you paid your fee you can see for the day.
  • by Tweekster (949766) on Friday September 29 2006, @03:28PM (#16250963)
    is sooo small economically wise it is rather pathetic they have as much pull as they do...the candy industry is about 10 times the size
    • by TubeSteak (669689) on Friday September 29 2006, @03:34PM (#16251109) Journal
      The entire movie industry is sooo small economically wise it is rather pathetic they have as much pull as they do...the candy industry is about 10 times the size
      FTFA:
      "It's important to remember, however, that even though piracy prevents money from reaching the movie industry, those dollars probably stay in the economy, one intellectual property expert said."

      Translation: It doesn't really matter if they take their made up number and multiply it by three. The economy wasn't hurt.
      • by khasim (1285) <brandioch.conner@gmail.com> on Friday September 29 2006, @03:48PM (#16251363)
        "It's important to remember, however, that even though piracy prevents money from reaching the movie industry, those dollars probably stay in the economy, one intellectual property expert said."

        I'm pretty sure that pirates bury their loot on tropical islands.
      • by Znork (31774) on Friday September 29 2006, @04:02PM (#16251625)
        "The economy wasn't hurt."

        Actually, quite the opposite. Considering that the IP industries are particularly inefficient in their production as protected entities, the economy as a whole _gains_ from the failure to enforce their monopoly priviliges.

        Piracy means the economy as a whole gains _both_ the wealth inherent in an extra copy of a certain material for the particular consumer _plus_ the wealth inherent in whatever else the money is spent on.

        Translation: The numbers made up by the industries are completely irrelvant, IP is merely a method of redistributing wealth to achieve a specific purpose, similar to taxes, and as such the only interesting measure is wether a) the money actually goes to it's intended recipient and b) wether it's an efficient use of resources.
        • by Sathias (884801) on Friday September 29 2006, @06:49PM (#16253965)
          The more money the movie studios get, the more money that gets given to actors. More disposable income in an actors hand's means they will snort more coke. Buying more coke means drug dealers get more money, which means the cash goes into the black market. And if the government is to be believed, it will end up in the hands of terrorists.

          Do your part for the War on Terror now, download some .avi files!
          • Re: (Score:3, Interesting)

            For everyone to really win the interest the bank pays you must also beat inflation. Typical flexible savings/checking accounts don't have very good interest rates. You still win over stuffing it under your bed, of course, but typically if you really want to get a good return rate on savings you have to have enough money to make it worth it to pay the fees necessary for the kind of accounts/investments that will yield you a good return. Otherwise it's a big win for the bank and nothing for you. Takes mon
    • by patrixmyth (167599) on Friday September 29 2006, @03:34PM (#16251111)
      Shh!! Don't give them any ideas, or we'll have CRM (Candy Rights Management), and I won't be able to share my skittles. Oh wait, that would actually be a good idea. Get your own damn skittles, hippie, these are mine! Proceed.
    • It is enough of an impact to get the attention of Congress. What the entertainment industry is failing to account for is the economic impact that their government given monopoly is making on the economy.
    • by tddoog (900095) on Friday September 29 2006, @03:39PM (#16251201)
      Hollywood props up the monstrous candy industry. Just think of that $10 box of raisinets you buy at the theatre. This is exactly the kind of ripple effect they are talking about. No movie patrons in the theatre => no candy sales => no $2000 root canals. Won't someone think of the dentists?
  • by eldavojohn (898314) * <my/.username@@@gmail.com> on Friday September 29 2006, @03:28PM (#16250967) Homepage Journal
    The study, which they're presenting to lawmakers today, claims that piracy has a ripple effect on the economy.
    The study also claims that piracy is on the rise to become America's number one killer by the end of the year. It claims that piracy is capable of running rampant down the street and reeking havoc everywhere.

    They interviewed a crew hand from Waterworld and, aside from forcing him out of a job, the unnamed victim reported that piracy forcefully entered his home and raped him in front of his youngest son. Piracy has taken not only his source of income but also the joy that he and his son once shared.

    The report concludes with piracy being at large and dangerous. Piracy is capable of flipping bits in a pattern that resembles music and is also known to cause cancer.

    The study, which they're presenting to lawmakers today...
    So when are lawmakers presented with the Piracy Is Actually Pretty Bitching for Consumers report? What about the Economics Research is Bullshit & Baseless report? Oh, that's right, the other side of the issue never gets to hear it's voice heard and no alternatives will ever be explored. Silly me.
    • Re:More on the Study (Score:5, Interesting)

      by TubeSteak (669689) on Friday September 29 2006, @03:38PM (#16251181) Journal
      "According to the L.E.K. study, 38 percent of all movie piracy occurs on the Internet, with counterfeit DVDs accounting for the rest."

      Caption of the picture:
      Pirated-movie distribution operations such as this one in New York mean a loss to industry of about $20.5 billion per year, lost opportunities for about 140,000 new jobs and $800 million in lost tax revenue, the study says. (Recording Industry Association Of America Via Associated Press)

      60% of piracy has NOTHING to do with the internet
      XYZ x 60% = ~$20.5 billion

      Despite that, the MPAA does exactly what the RIAA has been doing with its plethora of lawsuits aimed at filesharing instead of targeting counterfeiters.
      • Despite that, the MPAA does exactly what the RIAA has been doing with its plethora of lawsuits aimed at filesharing instead of targeting counterfeiters.

        Easier to crea... collect evidence and pursue... heck, none of them have to leave their offices to do it, whereas somebody selling physical disks, ya gotta actually catch 'em at it, get 'em to sell you a disk or 3, and so on. File sharers, ya just gotta show some screenshot of your computer with some names of songs on it, point your finger, and yell real l

  • by Gadgetfreak (97865) on Friday September 29 2006, @03:29PM (#16251001)
    *Everything* has a ripple effect on the economy. That's why it's called "the economy" as a whole. You can't expect a noticeable shift in traditional cash flow to not have at least some sort of chain reaction or reactions elsewhere.

    • by mlmitton (610008) on Friday September 29 2006, @03:49PM (#16251379)
      It's sillier than that. The money that would have paid for all the popcorn and ushers doesn't disappear; it just doesn't go into the entertainment industry. Consider the extreme case: everyone pirates all movies. Here, the entertainment industry will disappear, but the video game industry (or tourism, or books, or whatever you want to put here) *grows*. These "ripple effects" are straw men designed to get society to think it impacts them. There would be a negligible impact on GDP or taxes.

      The more technical detail: it's the difference between a partial equilibrium and a general equilibrium model of the economy. In the partial model (the supply and demand curves we all know and love), you assume that you've completely modeled all relevant aspects of the economy, or rather, you assume nothing else matters. It's an incredibly useful approximation in many cases, but an approximation all the same. In general equilibrium, everything (theoretically) gets modeled--all the goods remotely related to entertainment, income, where income changes get spent, and so on.

      The idiocy of these "ripple effect" arguments is that they're using partial equilibrium to derive general equilibria effects! In other words, they're using a model that assumes nothing else matters to draw conclusions about the very things the model says doesn't matter.

    • by Technician (215283) on Friday September 29 2006, @04:00PM (#16251587)
      *Everything* has a ripple effect on the economy. That's why it's called "the economy" as a whole. You can't expect a noticeable shift in traditional cash flow to not have at least some sort of chain reaction or reactions elsewhere.

      Entirely true. The money spent on CD's, DVD's, Video Games, Movie tickets is not spent at Applebees, Disneyworld, Six Flags, US Forest Service, etc. The consumer has a limited income. It is either saved for retirement, spent on the requirements such as shelter, food, clothing, or entertainment. The expendible portion and it's ripple effect is a two way street. It makes a diffrence where the consumer spends the money. It is not a one way street of if the consumer spends the money or not.

      If the percieved value for the money is not there and there is a piracy way to acquire the music, Then the money will be spent on someting of tangible value such as a concert ticket or an I-Pod.
  • by krell (896769) on Friday September 29 2006, @03:29PM (#16251007) Journal
    All Hollywood has to do is change the language so words like "theft" apply to non-applicable situations such as copyright infringement. After they succeed at this, they can transmute the words arson, rape, and murder to describe it. Make sure "think of the children" is mentioned occasionally.
  • by Demon-Xanth (100910) on Friday September 29 2006, @03:29PM (#16251009)
    Making crappy movies.
    Sueing your audience.
    Making your customers go through crap that people who don't pay don't have to go through.
  • Um... (Score:5, Insightful)

    by Pancake Bandit (987571) on Friday September 29 2006, @03:30PM (#16251021)
    This study recieved funding from NBC Universal and the MPAA. Why am I having a hard time taking it seriously?
  • by creimer (824291) on Friday September 29 2006, @03:31PM (#16251045) Homepage
    I stopped buying DVDs since I'm never certain if the version out today won't be replaced by a extended version in six month and/or a gift box set next year. I want to spend my money only once. Not twice or thrice for the same product with extra features that should've been there in the first place.
    • I stopped buying DVDs since I'm never certain if the version out today won't be replaced by a extended version in six month and/or a gift box set next year. I want to spend my money only once.

      Then only spend it once - don't blame Hollywood for your own lack of self control.
    • by ShibaInu (694434) on Friday September 29 2006, @03:42PM (#16251257)
      So, when the new version comes out, your old version suddenly becomes unwatchable? Seems to be that whatever content you had is still there. The problem isn't that Hollywood does this, the problem is that people reward them by buying the stuff.
  • Ripple? (Score:5, Funny)

    by misleb (129952) on Friday September 29 2006, @03:33PM (#16251089)
    Ripple effect is fine. I just don't want to see a butterfly effect. One person pirates, and the next thing you know we have a chimpanzee for president and our rights are being eroded every day... Oh damn.

    -matthew

  • by DittoBox (978894) on Friday September 29 2006, @03:34PM (#16251115) Homepage
    lost revenues may have as much as three times the impact previously imagined.

    Need they say more?

  • Is this anything like the ripple effect [wikipedia.org] in the 4400? Is the future of the world at stake? ARE WE ALL GOING TO DIE?!?

    lost revenues may have as much as three times the impact previously imagined

    I see a bright future for cdr and dvdr sales. And Ipods. Eat it, Hollywood.
  • Piracy (Score:4, Funny)

    by Led Nudd (1004881) on Friday September 29 2006, @03:35PM (#16251123)
    It's important to remember, however, that even though piracy prevents money from reaching the movie industry, those dollars probably stay in the economy, one intellectual property expert said. Ridiculous! Doesn't everybody do what I do? That is, sink every penny I save through downloading pirated films into doubloons I keep buried in a chest in my back yard. Pieces of eight! Pieces of eight!
  • by Colin Smith (2679) on Friday September 29 2006, @03:35PM (#16251135)
    Hmm, perhaps the memories of the members of parliament, senators, congressmen and women should have their memories refreshed.

    In fact, it's the pirates who benefit the economy most, they produce the goods at a far lower cost, the benefit is far and wide, what is saved on music and videos can be spent on more important items.

     
  • by sinij (911942) on Friday September 29 2006, @03:36PM (#16251139) Journal
    Hollywood study finds that Hollywood deserves more money. Big surprise?
  • by Joe the Lesser (533425) on Friday September 29 2006, @03:36PM (#16251141) Homepage Journal
    What about the study about how only three movies this summer were bearable to watch?

    (Pirates, Sunshine, Superman)
  • Which has a worse effect on the economy? Think about it for a sec... It increases costs of R&D of consumer electronics, it delays to market consumer electronics. It makes so only a select few can market products that will play the content. It makes the hardware more expensive. It decreases the size market that might buy the content.
  • by CrazedWalrus (901897) on Friday September 29 2006, @03:39PM (#16251217) Journal
    ...now that immorality is hurting them. Is this the same Hollywood that has been overtly hostile to people who insist that there is such a thing as right and wrong? Piracy is just one of the many effects that Hollywood's fuzzy morality is having on society, and it happens to be the one that's directly biting them in the ass. I don't feel a bit sorry for them. In the various ways they've attacked traditional values over the years, I can't help but wonder how they didn't have the foresight to expect their current predicament.

    -Walrus
      • by Travoltus (110240) on Friday September 29 2006, @05:04PM (#16252701) Journal
        They've undermined the authority of parents by luring their children into their culture of natural born deviancy (and now complete and utter stagnation), and especially, they've been encouraging kids to be rebellious.

        Now that rebellion has returned home.

        Hollywood can boo hoo hoo all they want to, but the truth is, you always reap what you sow.
  • RIAA: Those danm Pirates are attacking our economy with their Voodoo Economics!!

    Pirate: Arrr!! But 'tis naught to the voodoo that you do so well!! Ye scurvy dogs!
  • There has been nothing worth copying! The stuff they put out is so pathetic that I would not want to waste bandwith copying.

    I have not been to a first run flick for over 1 year. I have been seeing only 70's and 80's classics such as Blade Runner and Xanadu and James Bond.

    Hollywood's product has really be very dissapointing to say the least. Perhaps Congress shall pass laws that dictate minimum quality to this stuff.

    Luv
  • Read the study? (Score:5, Insightful)

    by Americano (920576) on Friday September 29 2006, @04:25PM (#16252033)
    I'm sure that everybody was far too busy thinking up cute "+5 Funny" comments to go out and actually take a look at the actual study... but for anybody who's perhaps interested in formulating a defensible position on the matter based on facts rather than groupthink, the actual publication is available here [ipi.org].

    For a bunch of geeks, I'd think that doing a bit of research & gathering the facts before reaching a conclusion would be the *first* thing you'd do when trying to combat what you decry as a campaign of FUD & misinformation. Sarcasm isn't going to win the case in a courtroom, or in Congress. Deconstruct their argument & their methods. Show their assumptions & conclusions to be faulty.
    • Re: (Score:3, Insightful)

      The study is really thin on facts. The methodology of computing the the losses are computed is NEVER discussed. As I posted above, these studies almost always make the assumption that if piracy were stopped, those who pirated copies would be willing to buy the content at the prevailing legal price. That assumption alone which is absurd means the study is best used for toilet paper.

      The study mentions that restrictions of on the number of foreign made films (20 per year) in China drives piracy but then has
    • Re: (Score:3, Interesting)

      It's not so much what it actually says, but the whole point is misleading. If I stop buying chocolate, I'm not only hurting the retailer, but the distributor, importer, producer and right down to the guy picking the cocoa beans and the local pub where he goes to take a beer. On the other hand, if I buy mints instead, I not only help the retailer, but the distributor, importer, producer and right down to the guy on the factory floor and the local pub where he goes to take a beer. Almost every cent except tho
  • by Metroid72 (654017) on Friday September 29 2006, @04:48PM (#16252387)
    I can see the effects of a mini economy around Piracy.

    The Hollywood leakers, plus the illegal dubbers in South America combined with the rouge servers provide an avenue for people with burners at home that can go and sell this pirated content in flea markets and feed their families. It happens with books, music and other stuff....

    Is it illegal and bad? YES....

    So is WAR... (and it seems to fuel economies too...)
    Read: http://www.amazon.com/Political-Economy-Recent-Eco nomic-Thought/dp/0792383109/sr=8-2/qid=1159566373/ ref=sr_1_2/104-5959278-4596701?ie=UTF8&s=books [amazon.com]

    Oh well...
  • by Eil (82413) on Friday September 29 2006, @05:00PM (#16252623) Homepage Journal
    Internet piracy may be tougher for lawmakers to conceptualize, entertainment companies fear.

    Feh! Like's that's ever been an obstacle in the past...

    MPAA: Mr. Lawmaker, Internet Piracy of our copyrighted works is bad. When everyday people decide that they can download movies illegally without fear of repercussion, we find that sales plummet, the industry suffers, and the culture as a whole is significantly damaged.

    Lawmaker: Eh?

    MPAA: We're hemorrhaging money thanks to Intarwebs!

    Lawmaker. Oh.

    MPAA: And you see, accounting has this weird thing where our profits are directly linked to the campaign contributions that we make to you.

    Lawmaker: And what would you like your new law called?
  • by erroneus (253617) on Friday September 29 2006, @05:20PM (#16252891) Homepage
    According to the study, lost revenues may have as much as three times the impact previously imagined.

    If nothing proves they are imagining things more than this, I haven't seen it. Doesn't this statement indicate their losses are imaginary and that these new estimations are three times as imaginary?

    I hate to say that it's time for another law but I think there should be "rules and ethics of evidence" introduced into law. Such a law would state that any studies submitted to the senate or congress must have, at the very least, an impartial study to balance out the claims of special interests. We all know how stats and studies can be twisted into outrageous lies and exaggerations. It's time we start disallowing such crap on a regular basis. If these special interests are willing to fund their own studies as evidence for a need for legislation, then they should also be willing to have another study made as ordered by the legislative commission that will be reviewing the information. It would seem like a natural extension of our other fair and balanced matters of law such as in the case of evidence presented in a court.

    I'm sure I'm not the only one who's tired of the lies, damned lies and statistics given as evidence to write new laws. And while we're at it, let's stop the dairy companies from recommending our RDA of milk that seems to go up at every opportunity. Talk about conflicting interests.... and oil companies denying global warming? Enough already!
  • Back in the 20es when they were stamping on hollywood's "liberties" about making socially controversial films.

    See, today the opressed became the opressor, and this time the opression is not for what is right or wrong, but for MONEY.

    Just when are you going to die out, 55+ generation ?
  • by Sir Holo (531007) * on Saturday September 30 2006, @04:40AM (#16256875)
    So, they extrapolated from their initial made up number, eh?

    This type of false logic is called the Broken Window Fallacy [wikipedia.org]. Read it.
    • by Luscious868 (679143) on Friday September 29 2006, @03:51PM (#16251429)
      UNDERSTAND THIS YOU ARROGANT, GREEDY BASTARDS, /no one/ wants to fucking download your DRM'ed/non-DRM'ed bullshit movies and music.

      Is that so? From a recent press release [go.com]:

      The iTunes Store also features the world's largest catalog of online music with over 3.5 million songs and has sold a stunning 1.5 billion songs, making it the world's most popular digital music store.

      Just because the Slashdot crowd doesn't like something doesn't mean that average consumers have the same view. Get over yourself and UNDERTAND THIS, the RIAA and MPAA don't give a flying fuck about what you think. You are not their target customer.