To hear organizations like the Recording Industry Association of America (RIAA), the Motion Picture Association of America (MPAA) and various software companies tell it, they are losing untold billions of dollars to digital piracy. This is, in the words of a certain MSNBC personality, bull-pucky.
Let's look at the numbers being tossed about on this. The MPAA touts on their website a study by The Institute for Policy Innovation. I poked around their site and found a movie industry report that claimed "U.S. movie companies lost $6.1 billion in 2005 to piracy . . . [which] translates into total lost output among all industries of $20.5 billion annually. It also finds that lost earnings for all U.S. workers amounts to $5.5 billion annually, and 141,030 jobs that would otherwise have been created are lost. In addition, as a result of piracy, governments at the federal, state, and local levels are deprived of $837 million in tax revenues each year."
Look, I'm no statistician, but that sounds like guesswork multiplied by wild assumptions and divided by the square root of any random Senator's IQ. I'm not saying that piracy doesn't cost these industries a pretty penny, but it's nowhere near the apocalyptic levels they regularly regurgitate into any open microphone. You see, they are basing these ludicrous numbers on the fantastical assumption that every song, movie or computer program that is obtained by 'piracy' would otherwise have been purchased at the suggested retail price. This is wildly optimistic. Many people download pirate copies as much because they can, as from any desire to own them.
For example, say I find myself with access to a pirate copy of Adobe Photoshop. I play around and use it now and then, but does that mean without illicit access that I would otherwise have plunked down $500 for a legal copy? Not in a million years! Photoshop is a cool program to diddle with, but unless you really must have the high end features it offers, there are any number of alternatives that are far easier to use and far cheaper. Some even free! So Adobe wouldn't have lost a sale to me because I never would have actually bought it! It's the same with songs or movies. Sure some guy might download every movie ever made featuring Kate Beckinsale from a file sharing site, but how many would he have realistically ordered from Amazon if he didn't have access to the pirated copies? Very few, I'll wager. In fact, probably just the ones where she's dressed in leather or spandex!
I'd be surprised if these numbers were even in the same time zone as reality. None of these industries are being bled to death by piracy, despite their piteous cries. They suffer far more from their inability to adapt to changes in content delivery than to the loss of a few sales of the latest Justin Bieber album. Repeatedly these analog industries have had to be dragged kicking and screaming into the digital age. First it was music, then movies and now publishing. Each time it was the same story and each time the industry in question wasted, and in some cases continues to waste, years and gobs of money fighting what they should have been rushing to embrace. The real losses from piracy come from places like China and Thailand and are of the old school variety; guys selling cell phone quality DVD copies of Avatar from a back alley in Bangkok! No argument that piracy in general is wrong, but current attempts to address it by threatening entire websites due to one piece of unauthorized content are of the 'killing an ant with a shotgun' variety. I don't think we need to shut down YouTube because someone posts a funny cat video with an unauthorized Lady Gaga soundtrack, do you?
More information and links regarding SOPA and PIPA anti piracy bills can be found HERE