Stilgherrian » copyright

Crikey: The inflated cost of illegally copied DVDs

Stilgherrian — Tue, 11 Nov 2008 20:28:01 +0000

[This article was first published in Crikey on Monday. I've also added the comment and additional material which were published yesterday.]

Hurrah! The War on Terror is over! Well, at least it seems we’re no longer afraid of terrorists, because when Home Affairs Minister Bob Debus warned that illegally copying DVDs costs the industry $1.7 billion, for a change terrorism didn’t get a mention.

Major distributors have been trying to scare us off illegal copying for years. Australia’s laws were “harmonised” under the US Free Trade Agreement so copyright infringement became a crime. Gloomy doom-music-laden messages play before every movie. Serious people tell us that “piracy funds terrorism”.

“The Abu Sayyaf — blamed for the worst terrorist attacks in the South-East Asian country — are likely behind the illegal copying of movies onto DVDs,” reckons Edu Manzano, chairman of the Philippines’ Optical Media Board.

“The Yakuza are behind them in Japan and the Hezbollah are involved in the Middle East,” though he admits they lack “documentary evidence”.

Bob Debus’ weekend media release omits the “piracy funds terrorism” trope, saying instead that it funds “a range of criminal activity like drug trafficking and money laundering”. (Hang on, isn’t money laundering self-funding?) But by the time the story hit the ABC the government’s current bogeyman had been added to the list: child pornography. Ooh err.

Terrorism is insufficiently scary. Neither are the actual dollar costs.

$1.7 billion? Where’s that come from? We asked the minster’s office but they didn’t reply before deadline. US “estimates” on that scale have been thoroughly debunked.

Screen Australia says DVD sales boomed in 2007, up around 20% over the previous year. The entire net worth of the DVD sales industry is “only” $1.2 billion, which makes a “piracy cost” of $1.7 billion sound unlikely. They quote LEK Consulting’s estimate that 47 million illegal DVDs were in circulation, compared with 52 million legitimate sales — at a cost to the industry of $231 million, not $1.7 billion.

Of course “the industry” wants things to sound bad. But with record US box office receipts and booming DVD sales, could it be that there’s simply too many hangers-on between producer and consumer? After all, the $29 retail price of a music CD only delivers a dollar or two to the actual musicians. Apple’s iTunes and other online distributors take a far smaller cut, and the punters are starting to realise that.

If they’d rather slip a disc into their PC and burn Dark Knight for a mate rather than pay full retail, it means they don’t think the price is right.

The Industry Response

[This "industry response" was published in Crikey yesterday, as was my additional comment about the source of the statistics which follows it.]

Simon Bush, CEO of The Australian Visual Software Distributors Association, writes: Re. “The inflated cost of illegally copied DVDs“. The Australian Visual Software Distributors Association (AVSDA), representing the home entertainment film distributors, is certainly impacted by lost sales due to film piracy. I would not suggest it is the $1.7 billion as quoted but is large enough for the industry to put their hand in their pockets to fund million dollar consumer education initiatives. We would not do this if we did not think it important.

In terms of the links between DVD film piracy and organised crime, I believe the AFP and Interpol have confirmed this. As for this comment by Stilgherrian: “If they’d rather slip a disc into their PC and burn Dark Knight for a mate rather than pay full retail, it means they don’t think the price is right” this is irresponsible at worst and ignorant at best. If you don’t like the cinema ticket price for a film do you sneak in for free? If you don’t like the cost of a product do you steal it? If you wanted to watch the $185 million cost to produce Dark Knight on DVD and you thought buying it for $25 too steep then rent it for $5.

Don’t promote stealing and why is intellectual property seemingly worthless — or is it only Hollywood that is fair game?

Where the numbers came from

Stilgherrian writes: Minister Bob Debus’ office has told us the $1.77 billion cost to the industry quoted in the media release about illegal DVD copying came from Australian Institute of Criminology report “Intellectual property crime and enforcement in Australia“. The report’s Executive Summary says:

The negative impact of IP [intellectual property] crime includes adverse effects on business, the national economy, and consumer health and safety. For example, the software industry has argued that a 10-point drop in piracy globally could create 2.4 million jobs, $400b in economic growth and $67b in additional taxes.

Estimates of the loss to various sectors in Australia include the following:

$233m per year due to the piracy and counterfeiting of films (LEK 2006);

$677m of lost sales, in 2002, in the Australian toy, software and video games industry. This includes $445.7m lost sales in the business software industry (Allen 2003);

$515m in absolute losses in software piracy in 2006 (BSA & IDC 2006);

$45m per year as the cost to Australian subscription television industry (ASTRA 2006a);

$300m per year in breaches of trade mark as losses to the textile, clothing and footwear industry (ACAG 2000).

So, only $233 million was about copying films, which matches Screen Australia’s analysis. The remaining $1.5 billion has nothing to do with DVDs. I reckon that’s a tad misleading. The numbers are also sourced from “industry estimates” without any sign of critical analysis, but being requoted by the AIC gives them the air of officialdom. Screen Australia provides some lovely graphs which show a DVD industry that’s positively booming.

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Links for 17 June 2008 through 19 June 2008

del.icio.us — Thu, 19 Jun 2008 20:59:26 +0000

Stilgherrian’s links for 17 June 2008 through 19 June 2008. gathered automatically:

Receiver rejects call to release home plan | smh.com.au: Bizarre copyright claim? Building firm Beechwood Homes goes broke, but 580 customer can't get their homes built by someone else because Beechwood's receiver claims copyright on the plans!
Revoke Copyright for Poorly Paid Authors? | Brendan Scott’s Weblog: Counter view: "If the practical effect of 200 years of copyright protection for my industry body was that its members were 'the most poorly paid in Australia' I wouldn?t be asking for the regime to be extended! I?d be calling for it to be abandoned."
The Future of Copyright | Cato Unbound: Fascinating essay.
5 Influential Books All Bloggers Should Know | ProBlogger: Yes, by reading the same five books as every other blogger on the planet, you will suddenly provide a unique view on the world. Sigh. Good books, presumably, but "the usual suspects". Be original.

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Stilgherrian Live Alpha: episode 1 tonight!

Stilgherrian — Wed, 07 May 2008 22:51:35 +0000

I’ve just organised by first guest(s) for tonight’s inaugural episode of Stilgherrian Live Alpha. And, as you can see, we’ve spent half the night playing with graphics too.

I’ll be speaking with Adam Purcell and/or Jared Madden from Emerge.tv about tune-out.com campaign — their counter-campaign to the music industry’s propaganda film, Australian Music In Tune, which I wrote about the other day.

How can the music industry respond to the dramatic changed happening around them? Is it actually too late for them to change? And it’s interesting to note that the film on their website right now isn’t quite the same as the one originally released…

Since it’s the first program, I’ll probably tell you a bit about myself and what’s been on my radar this week. If there’s anything you’ve wanted to ask me, now’s the time.

Stilgherrian Live Alpha is recorded live at stilgherrian.com/live at 9.30pm Sydney time (1130 UTC), and I’ll be talking “talkback” via audio and video.

If you turn up early, you’ll probably see us doing some last-minute technical tests. And once the program is recorded, I’ll turn it in a podcast — details later.

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What you can do with copyrighted works

Stilgherrian — Sat, 26 Apr 2008 22:04:59 +0000

I’ve just been reminded that the best Australian source for information on copyright is the Australian Copyright Council, especially their information sheets on permissions, compliance and infringement and websites, the internet and software.

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Optimal copyright only 14 years

Stilgherrian — Sat, 14 Jul 2007 23:24:35 +0000

In most countries, copyright in creative works lasts for 50 years after the death of the creator. In the US, the Copyright Term Extension Act of 1998 extended that protection to 70 years for works created by individuals and 120 years for corporations. But a new paper by Cambridge University PhD candidate Rufus Pollock reckons copyright terms should be reduced, not extended [PDF file, 256k] — to just 14 years.

The US copyright extension was widely criticised as the Mickey Mouse Protection Act. Walt Disney’s Micky Mouse would have otherwise entered the public domain in 2003 — depriving the Disney corporation of income. Critics said the Act was nothing but more corporate welfare from the Bush II government.

Pollock’s paper argues that the optimal duration of copyright falls as the cost of producing and distributing creative works goes down. But since copyright laws are created through political lobbying rather than “a benevolent and rational policy-maker”, copyright terms steadily increased through the 20th century.

Politically it’s hard to remove rights which have already been granted — unless, of course you can pretend there’s some terrible threat such as terrorists or black paedophiles — so Pollock notes:

It is prudent for policy-makers to err on the low side rather than the high side when setting the strength of copyright.

Somehow, given the media industry’s current terror (!) of falling revenues thanks to that very process of falling distribution costs, and their close connection to political power, I just don’t see Pollock’s arguments winning any time soon.

Thanks to Ars Technica for the pointer.