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MPAA Piracy Stats Pulled Apart - Every Pirate Would Buy 100 DVDs

Posted by: , 14:32 AEST, Thu September 8, 2011

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The MPAA says that every pirate that stops downloading would otherwise spend $1,000 per year buying legal stuff, and that 13% of all American adults are movie/TV pirates

The MPAA has released an infographic that highlights the problem of piracy in the US, including the headline grabbing stats of $58 billion lost per year due to copyright theft (and this is in the US only), and that 29 million adults have downloaded or watched pirated films and TV show. But as with most information and statistics released by the MPAA, a high degree of estimation is expected, and the estimation usually errs on the high side, just so the lobby group can make their point to non tech savvy politicians. 

But then there's the danger of providing too much information to the Internet crowd, and for some smart aleck to pull apart the numbers and highlight the exaggeration and assumptions being made, and that's exactly what has happened.

Here's the infographic in question:

Conveniently, the huge $58 billion the graphics refers to is not the economic loss figure for the movie industry, but for all industries combined, including the music industry, gaming, software, and possibly including counterfeiting as well. The figure appears to be well sourced, referring to this particular report from 2007. However, this report by Stephen E. Siwek appears to use data from "Internal estimates of piracy losses compiled by each of the copyright industries" and several other sources which all link back to estimates by industry lobby groups, such as the MPAA. So, in effect, the MPAA has sourced themselves, and other industry lobby groups, as the source of the $58 billion claim.

But even assuming this figure is true, and it really cannot ever be "true" or "false", as it is an estimate based on unquantifiable data (such as how much money would a pirate spend if they didn't pirate), then when combined with the other figures, there are some startling revelations.

Starting with the figure of 29 million Americans who have either downloaded or watched a pirated movie of TV show (again, the source if "iffy", in that the study in which this number comes from was paid for by the MPAA, but again, let's just assume it is correct) - while this number is for movies and TV shows only, and so cannot be directly compared to the $58 billion claim. 

What one can extrapolate though, based on common sense, is that out of all the piracy activities, TV (and movie) piracy is probably the most popular, second only to music piracy perhaps. One can also assume that some of the people who pirate TV shows and movies are also actively engaged in music piracy, software piracy, and other forms of Internet piracy. And with pirated movies and TV shows being easily available online on streaming websites, without the need to even download anything, it's certainly a fair assumption that TV/movie piracy is probably the least technical form of piracy, another way of saying that "almost anybody can do it", as opposed to Torrenting or LimeWiring (before it went extinct, that is).

With 240 million Internet users in the US (according to ITU estimates), this means that 12% of the Internet population are conducting in movie/TV piracy (let's forget about the fact that some of these people are on dialup). Let's be generous and *double* this to 24%, 58 million people, to account for all types of piracy - that's almost 1 in 5 of *all* Americans (from babies to porn downloading grandmas), that are pirating freely on the Internet right now. 

So we now have 58 million pirates (of all kinds of stuff) and $58 billion in losses due to said piracy. That's exactly $1,000 per man, woman and child that these "bad people" would have otherwise spent on buying legal stuff, if they did not pirate (assuming teenagers and college students, a large percentage of the pirating demographic according to the MPAA, even have access to $1,000 per year to spend on movie/music/software entertainment). 

To put this further into context, $1,000 is about 100 DVDs, or 50 new releases on Blu-ray+DVD combos (that's 1 per week!), or 775 songs at iTunes' highest pricing tier. $58 billion is 25 times the existing US revenue of the entire Blu-ray format (source: DEG), 1.8 times the record breaking movie box office numbers for 2010 (source: MPAA), and nearly 10 times that of the entire US music industry (source: RIAA).

Amongst other figures highlighted by the MPAA infographic are the claim that 25% of all Internet traffic are related to piracy, conveniently forgetting to mention that legal streaming services such as Netflix now account for 40% of Internet traffic, according to recent studies. And with pirated downloads usually quite large compared to your usual legal download (pirated downloads typically range from 175MB to 1GB+ for TV shows and movies, and often 4GB+ for game downloads), is 25% really a lot, even when just Netflix alone is accounting for 40% of all US evening traffic?

Lies, damned lies and ...