Funny Numbers in Hollywood? We Are Shocked! Shocked!

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.

Comments

[Grulg]

Biggest pirates in entertainment are/were/have always been/always will be the Lew Wasserman's of the industry, they basically have the patent for all that Enron style accounting, from wayy back in the twenties on thru now. I don't feel even a smidge of sympathy for them.

[Aaror]

Piracy is a code word.
When the music industry decided to hire a bunch of pretty people to record canned music, and started the Disco age, music sales dropped. They blamed "pirates," with tape recorders.
MTV started the "British invasion," and suddenly people had new, interesting music, so they started buying. Even though the tape recorders still existed, and people still made backups of their music tapes, music sales went back to normal.
A few years back the music industry decided to ignore history and try canned music again, and amazingly the same thing happened. Obviously it was because of mp3 "pirates." After Aerosmith (I think) cussed out pirates, their sales dropped 33%. The musicians learned their lesson, and the music industry has slowly figured it out too.
Now the film industry has discovered that people don't want a good story, they want bigger explosions, artifical boobs, and moronic comedy. Oddly enough, sales have dropped off. It must be the "pirates."

[LeftRight]

Once again I'm reminded of Robert Heinlein's classic Past Through Tomorrow. When a man figured out a scientific way to predict death the insurance companies were losing money, so they sued him, and the judge said something like, "Just because your companies have made money off the people of this country for years doesn't mean that you are entitled to continue making that money in perpetuity." Course that was a different circumstance, they weren't making anything, and the MPAA companies ARE. That doesn't mean that the MPAA has a right to continue their bogus accounting, or has a right to sue everybody under the sun for *GASP* copying a movie, which they paid for!

[Libsrule]

And the fact that the Hollywood industry lies about facts and figures surprises....who?

Perhaps the best case showing how they lie like rugs is the one involving the movie Alien. After ten years, the studio was still claiming the movie was in the red even though it was a financial success upon release and even more so on video tape.

When the studio was sued for profits owed to the parties suing, the judge finally had enough after the studios kept giving BS reasons why it was still in the red, ordered the studio to show ALL the books and accounting of the movie.

Later he called it the biggest accounting fraud he had ever seen and ruled in favor of the plaintiffs, and of course the studio immediately appealed.

Don't know how that turned out but it gave a real good look into some of the accounting scams the studios use to keep from paying writers, actors, and others. That is of course another reason why these same people now insist on money BEFORE so called expenses.

Studios are just plain dishonest. It's their nature.

[fpie]

Figures don't lie but liars figure.