Yesterday, one of the agents of “Big Content” (the MPAA) released the news that they had lost over six billion dollars in 2005, due to piracy worldwide. Yet again, they seem to be failing to take a number of factors into consideration.
Let me say upfront that piracy is a real issue. I do not dispute that. I think Big Content is losing some real money here. But I also believe that they are overstating their case in an effort to make it easy for the politicians they’ve bought to get whatever shenanigan-laden copyright legislation they think up made into law.
I’d like to draw your attention to one paragraph in particular:
“Bootlegging,” which the study defines as buying illegally copied movies, DVDS or Video CDs, accounted for $2.4 billion. “Illegal copying,” making copies for yourself or getting them from friends, made up $1.4 billion. Finally, illegal downloads cost the studios $2.3 billion in lost revenues.
There is a fundamental problem with that line of reasoning, namely that they are assuming that every download/copy/whatever directly translates to a lost sale.
Let’s assume for the sake of argument that the Internet doesn’t exist and there is no easy mechanism for downloading or copying movies. Now, take a pool of one hundred people, chosen at random, and see how many people are going to buy “Cabin Fever” (in my opinion, the worst movie ever made) at $19.95. You might get 2-3 people willing to buy it, for a total gross of $59.85. Come back to reality now, and ask the same group of people who would be willing to make a copy of it. Even if 100% of the group is willing to make a copy of the movie, you’ve only lost $59.85. Big Content, on the other hand, would seem to have you believe that they’ve lost $1995. Big difference.
Truth number one – Just because someone pirates a movie, it does not directly correlate to a lost sale. It’s an opportunity cost, at worst.
More likely, it’s revenue you would never have seen anyway.