backtop


Print 36 comment(s) - last by maverick85wd.. on Jan 28 at 7:05 PM

Blames human error in commissioned 2005 study

In a humbling admission of error, the MPAA revealed that a crucial statistic used in its campaign against file sharing was overstated by almost three times: college-campus movie downloading cut into the organization’s domestic revenues by only 15 percent, as opposed to its previous statement of 44 percent.

The erroneous figure comes from a 2005 study that the MPAA commissioned from business consulting firm LEK. The MPAA called the slip-up an “isolated error” in LEK’s process, attributable to a mistake made during the study’s data entry – which was only uncovered during a review while compiling the study’s 2007 update.

An official statement was posted (PDF) to the MPAA’s website on Tuesday: “We take this error very seriously, and have taken strong and immediate action to both investigate the root cause of this problem as well as to substantiate the accuracy of the latest report,” wrote MPAA exec Seth Oster. “Additionally, the MPAA will retain a third party to validate LEK’s updated numbers.”

The updated figure of 15 percent reduces the MPAA’s claimed losses from over half a billion dollars – a number that MPAA Chairman Dan Glickman used in testimony before congress – to slightly less than a quarter billion.

The admission comes as a relief to the MPAA’s critics, many of whom expressed doubt over the study’s lofty claims of numbers so high that, according to the Wall Street Journal, even studio executives had second thoughts about releasing.

Unfortunately, the admission also means that the MPAA’s overstated figures mislead its lobbying targets, which includes congress, presidential candidates, and university IT staffs. It’s even possible that a number of bills – some of which are still floating through congress – were influenced by the incorrect information. So far, the MPAA has said nothing of how far it will go to make its corrections known; instead it seems unfazed, noting that “the latest data confirms that college campuses are still faced with a significant problem.”

Mark Luker, vice president of the nonprofit advocacy group EDUCAUSE, thinks that the MPAA’s adjusted figures are still too high as they don’t properly account for the 80 percent of college students who live off-campus. With that factor under consideration, says Luker, a more accurate figure might hover somewhere around 3 percent.

“The 44 percent figure was used to show that if college campuses could somehow solve this problem on this campus, then it would make a tremendous difference in the business of the motion picture industry,” said Luker. With the MPAA’s admission, the true numbers prove that “any solution on campus will have only a small impact on the industry itself.”



Comments     Threshold


This article is over a month old, voting and posting comments is disabled

The MPAA overstated
By Orthogonal on 1/24/2008 9:41:59 AM , Rating: 3
I think you got your *AA's mixed up.




RE: The MPAA overstated
By Master Kenobi (blog) on 1/24/2008 9:57:41 AM , Rating: 3
The RIAA would never admit it made a mistake. The MPAA looks like they are willing to, even if they deflect the blame.


RE: The MPAA overstated
By napalmjack on 1/24/2008 11:29:20 AM , Rating: 5
Absolutely right. The RIAA makes the MPAA look like the United Way.

However, the MPAA is a truly despicable group, especially in their ratings(read fascist censorship) board.


RE: The MPAA overstated
By mmntech on 1/24/2008 1:10:55 PM , Rating: 5
Reminds me of that scene in "The Aviator" where Hughs is arguing with the MPAA over "mammaries" in his movie. I'm surprised they let that scene slip buy them
The current state of the entertainment industry also reminds me of 1984, where machines pump out soulless music and movies for the prol class.

I've always suspected that the piracy rates are grossly overstated. Even their updated quarter billion in losses is probably still too much.


RE: The MPAA overstated
By napalmjack on 1/24/2008 3:18:51 PM , Rating: 5
Yeah, that's a good example right there. If you want a real close look at how they operate today, take a look at the movie This Film Is Not Yet Rated.


RE: The MPAA overstated
By MikeO on 1/25/2008 9:19:45 AM , Rating: 4
quote:
I've always suspected that the piracy rates are grossly overstated.


Of course they are and will propably always be, because the likes of RIAA and MPAA start from the assumption that everything that has ever been pirated would otherwise been bought, which of course is absolute bullsh*t.


RE: The MPAA overstated
By Hydrofirex on 1/25/2008 8:06:03 PM , Rating: 2
Bingo!

Supply and Demand: I will take many more things for free than I would pay for. I would absolutely always go see movies I'm into at the theater. It just offers an experience that you just can't get sitting at home on the couch. Even if you have a high-end set up there is something to the communal experience of cinema in my opinion. The same goes for music.

HfX


RE: The MPAA overstated
By maverick85wd on 1/28/2008 7:05:21 PM , Rating: 2
I will definitely agree that music is not even comparable when it comes to a live performance vs. a recorded track. Seeing a good show will often make someone who did not appreciate the recorded work become a fan. IMO, the music industry should make as much or more money from the concerts than they do on records. I can't help but think over-charging for media that's easily accrued for free electronically is just a bad marketing decision that encourages piracy, which then causes them to attack their own customers (yet another smooth move). But hey, that's just me. I have also been boycotting CD purchases since I read this: http://www.dailytech.com/RIAA+CD+Ripping+is+Unauth...

I also agree that the movie experience is excellent, but if you have a 70"+ projection screen that handles 1080p (or even a really nice 50"+ PLasma/LCD), a BD player, a good (think Denon or Harmon Kardon, not Sony or Toshiba) surround system that is properly set up, and everything has been calibrated together correctly, I would have to say that the home theater is actually a better experience... but if you have that kind of set up you also aren't interested in pirating even a good quality movie.

I would also add that, while the RIAA is much worse as an organization, they are also easier to deal with. They make such outrageous statements that no one takes them seriously. The MPAA, on the other hand, at least tries to save face when it makes a huge "mistake" and so looks less greed-driven. Which one is more dangerous?


RE: The MPAA overstated
By onwisconsin on 1/24/2008 11:29:35 AM , Rating: 4
RE: The MPAA overstated
By eye smite on 1/24/2008 2:09:52 PM , Rating: 2
Well with AA at the end, we know they all go to alcoholics anonymous every week.


RE: The MPAA overstated
By darkfoon on 1/24/08, Rating: -1
RE: The MPAA overstated
By eye smite on 1/24/2008 4:18:54 PM , Rating: 1
I'm sorry, would calling them catamites with greed stamped at the top of their drivers licenses make you feel better?


RE: The MPAA overstated
By Spuke on 1/24/08, Rating: -1
RE: The MPAA overstated
By scrapsma54 on 1/26/2008 6:27:13 PM , Rating: 2
MPAA and RIAA is pretty damn lame.


Pure Greatness
By edpsx on 1/24/2008 9:41:54 AM , Rating: 5
That picture had me rolling after I read the title LMAO!!




RE: Pure Greatness
By Polynikes on 1/24/2008 9:54:37 AM , Rating: 2
I got a chuckle out of that, too. :)


RE: Pure Greatness
By Master Kenobi (blog) on 1/24/2008 9:55:20 AM , Rating: 2
Yes, I think this thumbnail might be the best one yet.


RE: Pure Greatness
By Brandon Hill (blog) on 1/24/2008 9:56:35 AM , Rating: 2
**People in elevator holding their noses**

"It was meeeeeeeeeeeeeeeeeeeeeeeeee."


RE: Pure Greatness
By Bioniccrackmonk on 1/24/2008 10:09:19 AM , Rating: 2
Was it good for you?

I've had better <covers mouth ASAP>


RE: Pure Greatness
By Azzr34l on 1/24/2008 12:40:20 PM , Rating: 2
Hands down winner of "Best Thumbnail Ever"! Perfection.


RE: Pure Greatness
By eye smite on 1/24/2008 2:08:21 PM , Rating: 3
All I can say about the MPAA.................phucking morons.


The *REAL* Pirates
By twnorows on 1/24/2008 2:09:59 PM , Rating: 5
When you look at the entertainment industry's true cost to produce a music CD or movie DVD using chin-eeze slave labor, you're really talking about 10 cents per unit - including duplicating, packaging, shrinkwrapping, etc.

Most of these things sell at a retail level of about $20 each. Factoring in 50% for the distribution costs, this means the producers are making about $10 per unit. When they are paying (the top artists) only about 10 cents to 25 cents per unit sold, that means the profit that these GREEDY COMPANIES make is 40 times their cost.

This is FOUR THOUSAND PERCENT PROFIT !

Why shouldn't the energy companies (like Enron) also be able to sell their energy to CALIFORNIA (where the entertainment industry largely resides) for FOUR THOUSAND PERCENT PROFIT with equal impunity? Is there some kind of DISCRIMINATION exercised on giving some GOUGING COMPANIES (the entertainment industry) a free pass when they charge EXCESSIVE PROFITS for something people only want , while excoriating others (energy providers) for their GREED in charging for something people actually need ?

I'm frankly confused about this apparent dual standard - aren't you too? What gives?




RE: The *REAL* Pirates
By napalmjack on 1/24/2008 3:13:56 PM , Rating: 3
I can see what you're saying.

Usually, the value of a product is determined by how much the consumer is willing to pay for it. The consumer has been trying to tell these two industries for years that they won't pay this much for their products; the RIAA and MPAA will not listen . So, the consumer has found other (illegal) avenues to satisfy their entertainment needs. It's stealing, but it doesn't feel like stealing.

The RIAA & MPAA need to revamp their flawed, failed business model.


RE: The *REAL* Pirates
By rcc on 1/25/2008 1:44:16 PM , Rating: 2
The problem is that rampant piracy confirms the "value" of the product. So they keep looking at putting the "stolen" money in their pockets.

Now, if everyone, or just a lot of people, quit buying and didn't steal the product, then the industry would have to recognize the problem and adjust.

However, the meeeeee generations have easy access to the technology to pirate software, music, etc. So they steal it, rather than letting the market heal itself.


RE: The *REAL* Pirates
By Screwballl on 1/24/2008 3:33:14 PM , Rating: 2
Typically if there is a viable option or choice.... what people need versus what they want, what they want is typically cheaper than what is needed.
Case in point: health food versus junk food. Health food is needed to stay healthy but junk food is cheaper so sells more.
In a case where there is no viable alternative, they jack up the price for it. Example: gasoline and entertainment. Sure you can ride a bike to work but how viable is that when you work over an hour away (with an average speed of 40-60mph)? When you want to see a brand new movie, your choice is to pay that $8-14 per person or wait several months until it comes out to rent or buy... or get a new music song, your options are buy the full CD or buy it from a downloading source, both riddled with DRM that limits your "legal" usage.


RE: The *REAL* Pirates
By Spuke on 1/24/2008 5:58:09 PM , Rating: 2
quote:
When you look at the entertainment industry's true cost to produce a music CD or movie DVD using chin-eeze slave labor, you're really talking about 10 cents per unit - including duplicating, packaging, shrinkwrapping, etc.

Most of these things sell at a retail level of about $20 each. Factoring in 50% for the distribution costs, this means the producers are making about $10 per unit. When they are paying (the top artists) only about 10 cents to 25 cents per unit sold, that means the profit that these GREEDY COMPANIES make is 40 times their cost.

This is FOUR THOUSAND PERCENT PROFIT !

Why shouldn't the energy companies (like Enron) also be able to sell their energy to CALIFORNIA (where the entertainment industry largely resides) for FOUR THOUSAND PERCENT PROFIT with equal impunity? Is there some kind of DISCRIMINATION exercised on giving some GOUGING COMPANIES (the entertainment industry) a free pass when they charge EXCESSIVE PROFITS for something people only want , while excoriating others (energy providers) for their GREED in charging for something people actually need ?

I'm frankly confused about this apparent dual standard - aren't you too? What gives?
Why did you get rated down? Good post.


RE: The *REAL* Pirates
By darkpaw on 1/24/2008 9:09:41 PM , Rating: 3
Maybe because the cost of printing and distributing the cd doesn't mean anything to the final value of the product?

I hate it when people use that excuse with software, oh its just a $0.25 CD, why does it cost so much?

People have no idea what it actually costs to produce whats contained on that CD.

Music cost less to produce then software, but there are still costs involved and when it comes down to it they own the rights and get to decide what to charge for it. If you don't want to pay it, then don't buy it, but don't pirate it either. Only by not buying it or not pirating it will the companies actually get the point that people won't buy $15-20 CDs.


Come on
By themadmilkman on 1/24/2008 9:45:50 AM , Rating: 5
Haven't they used this study as evidence in one or more cases? Come on court sanctions!




RE: Come on
By elpresidente2075 on 1/24/2008 10:09:36 AM , Rating: 5
Absolutely!!! They should be fined 1 Billion dollars for what they've done. Then that money should be used to find any other "errors" that may have been made on the RIAA side. Deal the finishing blow once and for all on those *expletive deleted*!


RE: Come on
By Mitch101 on 1/24/2008 11:13:16 AM , Rating: 5
Absolutely if they overstated the piracy rate then they are overstating the piracy losses.


haha...idiots
By Coca Cola on 1/24/2008 2:56:49 PM , Rating: 2
with all that money they should at least hire someone to triple check every crucial st..st...statistic before releasing some study, maybe they'll hire Dick Harper to take the blame for this.




RE: haha...idiots
By billybob24 on 1/24/2008 6:14:02 PM , Rating: 2
Haha Dailytech, the biggest piracy promoters on the web.

I recommend everybody using firefox download adblock, and set it to block all ads on Dailytech.


By xphile on 1/25/2008 4:52:15 AM , Rating: 2
You do not EVER, in any kind of statistics, look at a result as being true that ever later turns out to be inaccurate by more than 10 or so percent and EVER have ANYONE believe you EVER knew ANYTHING about the subject you were talking about.

In short this proves beyond doubt that the MPAA knows NOTHING, and have no idea whatsoever WHO to turn to to gain information or HOW to really measure it.

In the course of legal scenarios in the future as a lawyer I'd be referring to this ad infinitum as the backstop of all that could ever be required to raise doubt to get a client off. Just the sheer massive nature of the variance raises more doubt about any understanding or accuracy than could ever be needed in a court of law.

Failing that they can no longer ever push any kind of number over 15% without everyone laughing at them as being ridiculous. I think this is a huge win for reality and a much bigger set-back for both the MPAA and RIAA than they would ever care to admit.




By mindless1 on 1/25/2008 5:26:57 AM , Rating: 2
The interesting part is that nobody questioned this figure enough until now. It's just plainly obvious college kids, a segment of legal adults with the least disposible income, could not possibly come close to causing even 20% of the losses. I think the 15% figure is still way overstated based on their antiquated theory that if they illegally shared a movie it would've otherwise been a sale.


By Staples on 1/25/2008 4:40:35 PM , Rating: 2
Still does not justify piracy as some of the comments above seem to believe.




By HighWing on 1/25/2008 1:16:41 PM , Rating: 1
"Hey Billy-Bob, what number did the dart hit?"

"44"

"ok 44% sounds good enough send that to the press"

Two years later

"Sir people think that 44% is too high"

Throws a dart

"hmm 15... yeah thats a good number. Tell them there was an error somewhere and the real number is 15%"




"We basically took a look at this situation and said, this is bullshit." -- Newegg Chief Legal Officer Lee Cheng's take on patent troll Soverain














botimage
Copyright 2014 DailyTech LLC. - RSS Feed | Advertise | About Us | Ethics | FAQ | Terms, Conditions & Privacy Information | Kristopher Kubicki