Hollywood’s major movie studios lost $6.1 billion (3.3 billion pounds) in revenues in 2005 to illegal videos, DVDs and Internet downloads. Well statistics don’t lie.
In a recent study, the Motion Picture Association of America (MPAA), which represents the major studios in government affairs, said that this report was the first to measure losses from Web downloading.
For years the MPAA has said it believed the studios lost about $3.5 billion in annual revenues from the sale of illegal videos and DVDS, and it never estimated lost sales on the Web. The new research was conducted in 28 countries and took over 18 months. “This study will help us better analyze and focus our efforts to fight movie theft,” MPAA CEO Dan Glickman said in a statement.
The study, conducted by LEK Consulting LLC and commissioned by the MPAA, showed losses in the United States alone totaling almost $1.3 billion. Mexico was No. 2 on the list, accounting for $483 million in lost sales. The research dispelled a common belief Asian countries such as China had the most offenders. That country was No. 5 on the list with a total of $244 million in lost sales. Russia was No. 3 at $266 million, followed by Spain No. 4 with $253 million.
Of the $4.8 billion in lost revenues in international territories, nearly half of that came in Europe. “Bootlegging,” which the study defines as buying illegally copied movies, DVDS or Video CDs, accounted for $2.4 billion. “Illegal copying,” making copies for yourself or getting them from friends, made up $1.4 billion. Finally, illegal downloads cost the studios $2.3 billion in lost revenues.
The study showed piracy in Asia is less a problem than in North America and Europe. It also showed that losses stemmed not only from fewer ticket sales but also from fewer DVD sales which has been one of the growing business arenas in recent years. In the United States, illegal copying is the most prominent way to get pirated movies, whereas in other countries, downloads and bootlegging are more commonly used. The average offending person is male, between 16 and 24 years-old and living in urban areas, according to the study.
