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April 6, 2013

WSJ's Numbers Guy Takes a Closer Look at the Impact of IPI's Film Piracy Study

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Wall Street Journal columnist Carl Bialik takes a closer look at IPI’s film piracy study from 2006, which assessed the damages to the U.S. economy from worldwide motion picture piracy.

Bialik writes:

From their publication in 2006 through the debate over the Stop Online Piracy Act that ended early last year, the film industry frequently has cited the findings of a study by the Institute for Policy Innovation, a Lewisville, Texas-based think tank that found film piracy was costing the U.S. economy $20.5 billion annually.

Bialik asked for IPI president Tom Giovanetti’s take on criticism of the publication and its findings.

Giovanetti said that the IPI study was an early attempt to answer a tough question, and an improvement on the status quo, in which economic-impact statistics — such as that 5% to 7% of all goods were pirated — were cited without any basis other than vague industry estimates. “There were so many numbers being bandied about, and any time we looked into it, people were quoting each other,” Giovanetti said.

“When you do something like this, you’re not going to come out and say, this is the accurate number,” Giovanetti added. “We know there is more art than science.”

Some writers and economists criticized the IPI study’s use of multipliers to estimate the effect of piracy on the broader economy…

Giovanetti rejected the argument that theft, of intellectual property or anything else, freed up money for the thieves to spend elsewhere. “You could use that argument about any act of theft,” such as of automobiles, Giovanetti said. He added that piracy is “skewing the economy” by reducing investment in products people want but some aren’t paying for.

To read the full blog, visit the Wall Street Journal online.

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