David Levine and Michele Boldrin: Economical analysys of MPAA ads

[muxec]

Read this! It's very interesting short academical research on MPAA anti-piracy advertisement. It's about the way USA industry lies to americans.

Now reading Levine and Boldrin's theory of IP. Looks interesting although I disagree at some points.

[Provost Harrison]

They really struggle with the word 'Propaganda' though, seen it spelt every way in this article except the correct way

It's a bit of a 'no sh*t Sherlock' scenario though...we all know that these organisations and their confederations are defending their position by whatever means possible. Hell, I've even seen adverts here that state 'by buying pirated films you are supporting terrorism'. I mean, WTF, they are getting a little bit out of control. And the RIAA is like an out of control, rabid dog. The whole situation here even has undertones of McCarthyism...

[JohnT]

A good example is the mailworker in a different MPAA propoganda video: if the Matthew were to lose his job working for the studio delivering the mail to Clint Eastwood, he would have little difficulty finding work in another one of the many mailrooms around. Perhaps he would not like this as much as delivering Clint Eastwood's mail, but then again, since he wouldn't get to see Clint Eastwood, perhaps he would make a few more dollars. Either way, working in a different mailroom in a different industry (his opportunity cost) wouldn't find him much worse off.

This is such bull**** I am ashamed that you brought it in here as a serious argument, muxec.

To lose a single mailroom job impacts the entire class of mailroom workers as well as the original employee. Perhaps Mr. Mailroom would be able to find another job - that does not change the fact that there's one less job, that there's one less person who can be employed in the mailroom "industry."

We ought to destroy all jobs - that way, there'll be jobs for all!

[JohnT]

The economic consequence of the monopoly power granted through copyright is that it drives up the economic rent of scarce resources. That is, copyright raises the economic rent of big stars - who are scarce - while having little impact on the salaries of ordinary workers - who have many competitors and are not scarce.

Let's look at facts:

This breakdown of the cost of a typical major-label release by the independent market-research firm Almighty Institute of Music Retail shows where the money goes for a new album with a list price of $15.99.

$0.17 Musicians' unions
$0.80 Packaging/manufacturing
$0.82 Publishing royalties
$0.80 Retail profit
$0.90 Distribution
$1.60 Artists' royalties
$1.70 Label profit
$2.40 Marketing/promotion
$2.91 Label overhead
$3.89 Retail overhead

Source: Rolling Stone, posted October 24th, 2004.

So, by destroying copyright, you're going to save a whopping $1.60-$2.42 on the cost of every CD. And for no better reason than jealousy and greed.

[JohnT]

The complete MPAA propoganda video is remarkably also for the extent to which it exagerates the importance of the movie industry: we wouldn't really want to lose all these ordinary jobs would we? In the first and second screen of the video it is claimed that the U.S. motion picture industry employs 580,000 people nationwide, 259,00 of whom work directly in the production and service jobs necessary to create motion picture and television shows; the final screen lets us know that the "U.S. Copyright Industries" contribute more to the economy and employ more American workers than any other single manufacturing industry.

In this case, it is the U.S. Census Bureau that has a somewhat different perspective. The "U.S. Copyright Industries" are what the Census classifies as part of the "Information" industry. According to the 1997 Economic Census, the "Motion picture & sound recording industries" which includes not only motion picture and television production - but also music and sound recording - employs 275,981 paid employees. By way of contrast, IBM alone employs over 300,000 people.

1. 259,000 ~ 275,981.

2. Music and sound recording are actual TV and motion picture functions. Do you think that James Horner is not working for the movie industry?

3. What the article fails to mention is that they are comparing apples to oranges. The "Motion Picture and Sound Recording Industries" classification does not include the Broadcasting or Telecommunications industry (classification 514, 1.4 million employees), many of whom work in the "copyright industries." Many other classifications (including software - classification # 5112 (235,000 employees), publishers - classification #511, 1 million employees (software employees are a sub-category of publishing) not included in those totals. In fact, the census claims that over 3,000,000 people work in the information sector (see page 10 of the following report for a definition of "Information Sector". This is the report the OP's link refers to, btw.)

[Asher]

The main problem is, if you pirate a movie, this does not directly impact fixed-wage employees unless the company becomes unprofitable. It impacts the producers who get a cut of the profits.

Time and time again it has been shown if you make a good movie people like, it is profitable.

Titanic, for example, was absolutely terrible but made a fortune.

[JohnT]

Originally posted by Asher
The main problem is, if you pirate a movie, this does not directly impact fixed-wage employees unless the company becomes unprofitable. It impacts the producers who get a cut of the profits.

Time and time again it has been shown if you make a good movie people like, it is profitable.

Titanic, for example, was absolutely terrible but made a fortune.

1. It's not just when it becomes unprofitable, if it isn't profitable enough, line-worker jobs will get cut. Investors just don't expect companies to earn money, they require them to earn a specific amount of money (usually expressed in terms of EPS, of course.)

2. Though it was just eight years ago, Titanic wasn't released in an age of widely distributed home-broadband networks. Therefore the comparison is moot.

[muxec]

Piracy is profitable for hardware-manufacturing industry. Let's take an example of Xoro DivX player.
Compare the product description at international site that likely to be visited by MPAA agents or law enforcers ( http://xoro.com/product/XOR600941-7.prod ). Local Israeli page was changed some time earlier but previously below the product description it stated “Why pay for costly DVDs? Download pirated copies of movies and watch them with our hardware”

[Asher]

Originally posted by JohnT
1. It's not just when it becomes unprofitable, if it isn't profitable enough, line-worker jobs will get cut. Investors just don't expect companies to earn money, they require them to earn a specific amount of money (usually expressed in terms of EPS, of course.)

How can you cut line-worker jobs? As I see it the cost is fairly negligable to the company (especially compared to other costs, such as overpaid actors), and you can't just go and cut your electricians or whatever...what you can do is pay Tom Cruise $15M/movie instead of $20M/movie, though.

2. Though it was just eight years ago, Titanic wasn't released in an age of widely distributed home-broadband networks. Therefore the comparison is moot.

Lord of the Rings was. It did okay, didn't it?

[JohnT]

Because the very people who would DL other movies felt that they "owed" Peter Jackson something for making the films, while somehow disregarding the fact that they "owe" other people for making other films.

In regards to your other point, what'll happen is that fewer movies will be made with the "sure" stars being able to command even higher prices. Don't think so? That's exactly whats happening to the old broadcast networks - Katie Couric makes more than Jane Pauley (Today show host in the Eighties), though fewer people watch Katie Couric, both in absolute numbers and ratings.

[JohnT]

And the RIAA is like an out of control, rabid dog. The whole situation here even has undertones of McCarthyism...

The Recording Industry of America broadcasts commercials in the UK?

[Asher]

Originally posted by JohnT
Because the very people who would DL other movies felt that they "owed" Peter Jackson something for making the films, while somehow disregarding the fact that they "owe" other people for making other films.

That's nonsense.

I'm one of those people who will DL movies, but I also go to movies. I DL movies I would never pay to go see, because I consider them "too risky". I've been burned too many times in my life paying to see a terrible movie (*cough*Titanic*cough*), so I download movies I have no intention of ever paying insanely high ticket prices for.

Some times this will expand my horizons...for example, I downloaded Kill Bill vol. 1. I liked it, I didn't think I would. So I now have Kill Bill vol. 1 & vol. 2 on DVD, and I also saw Vol. 2 in theatres.

They just made money there, when they otherwise wouldn't have.

Same thing goes for music...

[JohnT]

That's called "rationalizing", Asher. I note the lack of tales of instances where you downloaded a movie, enjoyed it, but decided it wasn't worth purchasing or renting. Something tells me that happens far more than your Kill Bill scenario.

[Asher]

Originally posted by JohnT

And the RIAA is like an out of control, rabid dog. The whole situation here even has undertones of McCarthyism...

The Recording Industry of America broadcasts commercials in the UK?

I wouldn't be surprised, we see the same garbage in Canada before movies.

It's funny they tell us "DON'T PIRATE", after we bought our tickets and are waiting for our movie to start...

[JohnT]

Originally posted by Asher

I wouldn't be surprised, we see the same garbage in Canada before movies.

It's funny they tell us "DON'T PIRATE", after we bought our tickets and are waiting for our movie to start...

Well, why not?