Measures could reduce bootlegging by 10%

New antipiracy measures in a bill a House subcommittee will consider today could reduce overall bootlegging by 10% or more over three years and bring at least a fourfold return on every taxpayer dollar required to fund the bill, according to an economic analysis by economic and financial consulting firm LECG.

With its authors calling the overall package of measures “a sound investment for the federal government,” the analysis will be used by a group of businesses and industries — including showbiz — as evidence the bill should be passed and enacted.

According to an advance copy of his prepared testimony to the House Subcommittee on Courts, the Internet and Intellectual Property today, NBC U exec veep Rick Cotton, who is also chairman of the Coalition Against Counterfeiting and Piracy, characterizes the report as “powerful” and says it “confirms what we all know — we must tackle the problem of intellectual property theft to safeguard our economic security, to create jobs, to protect our health and safety, to defend against organized crime and to make the United States a model for our trading partners of how to address this issue.”

The subcommittee will review the Prioritizing Resources and Organization for Intellectual Property Act of 2007, or PRO IP Act, which was introduced last week (Daily Variety, Dec. 6). The bill would create a supervisory position inside the White House for intellectual property issues, establish a permanent IP division within the Justice Dept., up penalties for IP theft and increase personnel for combating piracy domestically and abroad.

The coalition — led by the U.S. Chamber of Commerce and comprising more than 400 business entities, including entertainment and media companies — engaged consulting firm LECG to perform a cost-benefit analysis of the above measures and others.

At a press briefing Wednesday, former Clinton administration economics adviser Laura Tyson, who oversaw the LECG analysis, said that immediate benefits of implementing the PRO IP Act would be increased productivity and employment for IP-intensive industries.

Tyson emphasized that she and her colleagues adopted “a very conservative” take on evaluating estimated economic gains and costs that the PRO IP Act might entail.

Bottom line: “Every $1 spent by the government on this will get at least $4-$5 back in tax revenues,” Tyson said.

The authors of the analysis also concluded that the measures could cut the estimated $225 billion annual losses to piracy across all sectors by $18.4 billion in the first year and by $36.8 billion in the first three years. Annual output would increase by $27 billion, and 174,000 new jobs would be created.

While the bill focuses only on deterrence, Cotton, the Peacock’s point man on IP protection, said “the big contribution this makes is that the issue will get senior government attention and leadership, and I can’t conceive that that would not include a major public education effort” to inform consumers about the dangers as well illegality of buying bootlegs of any kind.

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