Report minimizes online piracy impact

Overall industry revenue and household spending on entertainment have grown steadily in recent years in spite of the entrainment industry's claims that online piracy is sapping its profits, according to a new report commissioned by the Computer and Communications Industry Association (CCIA).

“The numbers paint a quite a contrast from the vision of doom and gloom the entertainment industry has pointed to lately,” said CCIA President & CEO Ed Black.

"Having a more clear picture of the economic successes and challenges of the content industry will help lawmakers around the world as they consider policies like increased copyright enforcement," he said.

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The report notes box office revenues grew 25 percent from 2006 to 2010, increasing from $25.5 billion to $31.8 billion. Meanwhile, spending on entertainment as a percentage of household income rose 15 percent from 2000 to 2008, and entertainment-sector employment grew 20 percent during that same decade.

The report says growth in employment for independent artists was especially strong during the last decade, at 43 percent, suggesting the Internet has actually made it easier for content creators to support themselves.

"This may be a strong hint as to why you hear reports of industry 'demise' from certain legacy players: because new technologies and services have made it much easier for content creators to find success without going through the traditional gatekeepers," the report states.

"It also raises questions for those who claim that the changing marketplace has been most difficult for independent artists. The data simply does not back that up."

Report author and TechDirt blogger Mike Masnick said the findings prove the Internet has provided more choice, resources and opportunities than ever before for content creators.

“By any measure, it appears that we are living in a true Renaissance era for content. More money is being spent overall. Households are spending more on entertainment. And a lot more works are being created,” wrote Masnick.

Both Masnick and CCIA were strong critics of the Stop Online Piracy Act and Protect IP Act, which were championed by the entertainment industry as vital cures for the epidemic of online piracy.

Both bills were recently shelved after a massive outcry from the the Internet and technology community, which argued the bills would lead to censorship and stifle innovation online.

The Recording Industy Association of America disagreed with the report's conclusions.

"We appreciate the optimistic view presented in the paper and we are as bullish about the future of the music business as anyone, but we don’t think this presents an accurate view of what has been really occurring in the United States in recent years," said RIAA vice president for strategic data analysis Joshua Friedlander.

"Trends in the United States have been clear, with a market less than half as large as it was 10 years ago and 60% fewer employees in the music business.  Virtually every neutral academic study has concluded that there is real harm to the music community when people download music illegally," Friedlander said.

The Motion Pictures Association of America remained firm for some sort of online protection.

“Strong intellectual property laws have resulted in an explosion of innovation and economic growth on the Internet," said Michael O’Leary, MPAA senior executive vice president for Global Policy and External Affairs. "Yet critics of copyright laws are trying to argue that the entertainment industry should not enjoy the same intellectual property protections as other industries.  What other industry is asked to accept theft of their products as part of their business model?  This is akin to the entertainment industry claiming a technology company has been so wildly successful that its software or product designs should be up for grabs for anyone who can figure out how to steal it.  Technology companies vigorously protect their intellectual property—usually patents—all the time in court.   Without strong patent protection, these companies would have little incentive to invest their creativity or capital in new products.  The bottom line is that every industry in America thrives when we create and protect intellectual property.”   

Updated at 2:05 p.m.


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