For years, the concept of "Hollywood accounting" had the same level respect as that old oxymoron "military intelligence." It didn't take an Art Buchwald or James Garner years ago, or even the writer's strike now, to show that playing with numbers in Hollywood is less a science than an exercise in corporate creativity.
That's why it shouldn't be a much of a shock when the Motion Picture Association of America (MPAA) finally admitted that its much-touted study from 2005 about the effects of "piracy" on its industry were a tad overstated. In claiming a loss of $6.1 billion, MPAA said college students were responsible for 44 percent of the total.
That figure is the cornerstone for the MPAA's assault on the rights of consumers over the last couple of years. They waved it around during Congressional hearings and Washington events. Legislators cited it as evidence that tough new laws were needed to crack down on "piracy" by limiting the legal rights of consumers to use lawfully acquired material in a legal way. There is a bill in Congress that could threaten the accreditation of colleges and universities if the educational community doesn't do its share to crack down on those student "pirates." Today, AT&T is talking about filtering the Internet for copyrighted content in order to forge a closer working relationship with Hollywood.
Not so fast. In the last couple of days, MPAA made a quiet call to some people in the educational technology community. Seems in the course of updating their 2005 study they found a teeny, tiny little mistake. Instead of college kids being responsible for 44 percent of those supposed losses, they were responsible for, say, 15 percent. If you factor in that most college students live off-campus, that number could go as low as three percent.
Unfortunately, we have to take MPAA's word for it, much as we do for their entire study. The LEK study, named for the firm which conducted it, has never been made public. Ever since its introduction, questions about the study have been raised and its conclusions have been challenged, but the public has not seen the study in order to assess its methodology. Then-Senate Judiciary Committee Chairman Arlen Specter (R-PA) asked for it in 2006. MPAA President Dan Glickman, during a June, 2006 hearing on legislation to make it difficult to record analog content, promised he would provide the data to the committee. The committee is still waiting. If there is an updated report to be done later this year, there is no guarantee the public will see that one, either.
What is truly unfortunate, however, is that Congress took MPAA's word for it in drafting such onerous legislation. Members of Congress disposed to agree with the entertainment industry went ahead with bills like the Pro-IP Act to increase penalties for copyright violations in the spirit of preventing 'piracy' without even questioning how much of said 'piracy' really exists, much less take a closer look at the causes of the industry's "losses." They took Hollywood's word without so much as a smidgen of a doubt. As part of a higher education bill, Congress is threatening accreditations of colleges and universities that don't, in their view, do enough about the "problem" -- which now appears to be a much smaller problem.
For a first step, Hollywood should apologize to the educational community, which is working hard to keep their networks free from pirated material. Then is should apologize to Congress for keeping its data secret, and then Hollywood should come clean with the public and put its numbers out there for everyone to see. Maybe then we can have some realistic debate about the size of the problem and potential solutions before we let legislators and private companies go around trampling the rights of American citizens in the name of protecting one industry that has a host of internal problems. Maybe then we can see some honest numbers, not Hollywood numbers.