Movie piracy’s harm felt beyond industry

Movie piracy is exacting a major economic toll beyond the film industry, hurting businesses from advertising agencies and video retailers to corn growers who supply popcorn in movie theaters, according to a study released yesterday.

Costs to the U.S. economy, according to "The True Cost of Motion Picture Piracy to the U.S. Economy," include total lost output among U.S. industries of $20.5 billion a year, annual lost earnings for U.S. workers of $5.5 billion, 141,030 new jobs that would have been created and $837 million in lost tax revenue.

Significant portions of the losses cited in the report are outside the movie industry. Of the $5.5 billion in lost earnings, according to the report by the Institute for Policy Innovation, $3.6 billion would have been outside the industry as would two-thirds of the lost jobs.

The institute advocates lower taxes, fewer regulations and smaller government.

"While the movie industry is clearly harmed by movie piracy, the greater story is the harm to U.S. citizens," according to Bartlett Cleland, director of the Institute for Policy Innovation's Center for Technology Freedom.

The increased movie industry revenue that would flow from decreased piracy, according to the study, would allow the companies to make more movies or invest more in activities such as marketing, which would help companies ranging from advertising agencies promoting the movies to video retailers and corn growers.

"We all know the movie industry is harmed when creative works are pirated and sold by others," according to Motion Picture Association of America Chairman and Chief Executive Dan Glickman.

"This research illustrates for the first time that motion picture piracy hurts not only the movie business, but triggers a harmful domino effect that results in lost jobs and wages for American workers inside and outside the industry, and lost tax revenue for all levels of government," he said.

The study said its figures suggest the real costs of copyright privacy are "enormous" and harming "all U.S. consumers and taxpayers."

"It is no longer acceptable to consider counterfeiting and piracy just another cost of doing business," the study said.