In yet another attempt to win public opinion the Motion Picture Association of America Inc. hired LEK Consulting to conduct a study on what DVD and Internet piracy is allegedly costing the industry. According to their study it costs the moview studios $6.1 billion last year alone.
The study estimated that losses from Internet piracy at $2.3 billion, about $2.4 billion to bootlegging, and $1.4 to illegal copying. The MPAA commissioned the study 18 months ago to quantify the scope of the movie theft in the digital age and to provide ammunition to nudge governments in the United States and internationally to take action.
I have a number of issues with these types of studies:
1. There is an underlying assumption that everyone that participated in this behavior would have bought the material if it wasn't received free. There is no way in the world that this could be true, which makes the numbers thrown around from the study suspect at the very least.
2. The MPAA is giving the impression that this is something new. When all of us watched VHS movies, how many times did we copy movies from TV to watch at another time? How many times did we borrow that same movie to a neighbor, friend or family member? How much money was lost as a result of that through the years? What makes it different from now? I know that in general it is easier because of the digital aspect and thus more viral, but it was still huge in the VHS days and I didn't hear too much complaining about he effect on the bottom line.
3. The consumer has changed in the last decade, and loves to get a sampling of the product before purchasing. For example, in the case of the above example of the VHS years, didn't you watch some of the movies for free and when you liked it, went out and bought your own, higher-quality movie? I've seen that happen over and over again through the years. This is part of the new model that is here today and will stay.
4. None of the demographics have changed as far as the age group that partakes more in this. Because there are more contacts in a persons's life in general when you're in high school and college, it is easier to share what you get with others that you see on a daily basis. This is why the MPAA is targeting and making moves against universities that have students using the LAN of the university to download content.
The point in all of this is that it is nothing new. In my opinion it isn't this that is causing the industry to lose sales at all. They have been slow to respond to the changing technologies and business models needed to embrace these changes. They can threaten, sue and intimidate all they want, but they still need to offer a product and platforms that their customer base is demanding.
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