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Piracy takes broader toll

Study: Homevid retailing lost $874 mil last year

Movie piracy costs the U.S. economy more than $20 billion annually, along with 141,000 new jobs, $5.4 billion in lost employee earnings and $837 million in lost tax revenue, according to a new study by the Institute for Policy Innovation, a Texas-based think tank.

“The true cost of motion picture piracy far exceeds its impact on the movie producers themselves and harms not only the owners of intellectual property but also all U.S. consumers and taxpayers,” wrote study author Stephen E. Siwek. “As policymakers seek to maintain the health and vitality of the U.S. economy and preserve our global competitiveness, it is imperative that government and industry work together to combat this growing problem. It is no longer acceptable to consider counterfeiting and piracy just another cost of doing business.”

The institute bills itself as a nonpartisan think tank advocating limited government.

“Because popular motion pictures are expensive to produce but cost almost nothing to illegally reproduce, they are a favorite target for pirates,” Siwek noted.

The IPI used data from LEK Consulting’s report for the MPAA showing that major U.S. studios lost $6.1 billion last year to pirates. The new study calculated that piracy cost U.S. exhibitors $377 million last year while the homevid retailing and rental biz lost $874 million.

That led to the IPI’s estimate of a $20.5 billion loss due to the “multiplier” effects on other industries such as suppliers and media outlets that depend on production of features and TV. Siwek noted that only a third of projected losses and earnings came from the motion picture biz while the rest came from related industries.

IPI’s report was released at a news conference Friday in conjunction with the U.S. Chamber of Commerce’s third annual anti-piracy and counterfeiting summit.

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