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,
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.”
quote: I've always suspected that the piracy rates are grossly overstated.
quote: I'm sorry, would calling them catamites with greed stamped at the top of their drivers licenses make you feel better?
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?