How Much Do Music and Movie Piracy Really Hurt the U.S. Economy?
Kal Raustiala and Chris Sprigman of Freakonomics discuss the claims that piracy leads to $250 billion a year in loses and 750,000 American jobs lost:
The good news is that the numbers are wrong — as this post by the Cato Institute’s Julian Sanchez explains. In 2010, the Government Accountability Office released a report noting that these figures “cannot be substantiated or traced back to an underlying data source or methodology,” which is polite government-speak for “these figures were made up out of thin air.”
And:
So what’s the real number? At this point, we simply don’t know. And this leads us to a second problem: one which is not so much about data, as about actual economic effects. There are certainly a lot of people who download music and movies without paying. It’s clear that, at least in some cases, piracy substitutes for a legitimate transaction — for example, a person who would have bought the DVD of the new Kate Beckinsale vampire film (who is that, actually?) but instead downloads it for free on Bit Torrent. In other cases, the person pirating the movie or song would never have bought it. This is especially true if the consumer lives in a relatively poor country, like China, and is simply unable to afford to pay for the films and music he downloads.
Do we count this latter category of downloads as “lost sales”? Not if we’re honest.
Instead of offering any sort of constructive ideas on how to curb piracy, Sopa’s opponents say the music industry should move with the times, not hold on to an old business model. Yet, despite many of them declaring themselves entrepreneurs, they can’t offer any valid suggestions of what that business model might be. Quality content is not cheap to make, hence why online ad-funding has not managed to save some of the world’s best newspapers from running at a loss and cutting staff. We may not see the repercussions of it now, but a Wikipedia-style blackout of all music, television and film would give a taste of what’s to come if we do nothing. Maybe then these technology companies would realise there is something to lose, even for them. Believe it or not, there’s a limit to how many cute animal videos one can watch on YouTube.
Seriously? You’re going to Atlas Shrugged us? (or should that be Atlas Shrug us?)
Let me put it this way. When a kid singing a Justin Bieber song in his bedroom on YouTube risks jail time, the bill is flawed… Actually, I do advocate imprisonment for anyone singing Justin Bieber songs, so that’s a bad example.
