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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.”





"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







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