Carl Horowitz

Few things grate against one's sensibilities than the image of someone getting something for nothing. Unless it's a gift, "theft" is a word that often comes to mind.

The subterranean world of film piracy is about getting something for nothing. These pirates, mainly operating in cyberspace, not the Caribbean, impose a major cost on the film industry and the U.S. economy as a whole. The true long-term cost, however, is far harder to discern, in light of a 30-year-old statute known as "fair use," and the near-impossibility of fully enforcing it.

The film industry trade group, the Motion Picture Association of America (MPAA), for at least five years has been urging Congress to pass anti-piracy legislation. It's now got ammunition in the form of two recent reports.

The first, done by L.E.K. Consulting for the MPAA, concludes that major U.S. movie studios lost $6.1 billion in 2005 to piracy. About 80 percent of that figure resulted from piracy outside the U.S., with Far East Asian countries leading the way. Some $3.8 billion was lost through hard copy, and another $2.3 billion through the Internet.

Another report, released by the Lewisville, Tex.-based Institute for Policy Innovation (IPI), concludes this estimate is actually on the low side, taking economic ripple effects into account. The author, Washington, D.C. consultant Stephen Siwek, puts the annual cost of movie piracy to the U.S. economy at $5.5 billion in earnings, $837 million in tax revenues, $20.5 billion in industrial output, and 141,030 lost jobs. Of the $5.5 billion in lost earnings, Siwek estimates, $1.9 billion would have been earned by workers in the motion picture industry.

Organizations favoring unlimited downloading, such as the Electronic Frontier Foundation (EFF) and Public Knowledge, by contrast, see film pirates as guerrilla-capitalist innovators, latter-day Davids with personal computers and camcorders doing battle with the Hollywood Goliath. The EFF website doesn't mince words: "You should be able to make personal use of your media...whenever, and wherever you want. Great gizmos make that possible..."

Kaiser Kuo, writing for the Chinese media blog site, opines, "All those Hollywood movies and all those CDs flooding the streets of Chinese cities have provided unprecedented exposure for young Chinese to the cultural output of the West."

In a way, the rationale is flattering. Piracy, like it or not, does provide exposure. Two of the most successful Hollywood filmmakers of the last 20 years, Ang Lee (Taiwan) and John Woo (Hong Kong), come from that part of the world.

Carl Horowitz

Carl F. Horowitz is director of the Organized Labor Accountability Project of the National Legal and Policy Center, a Gold Partner organization dedicated to promoting ethics in American public life.
TOWNHALL DAILY: Be the first to read Carl Horowitz' column. Sign up today and receive daily lineup delivered each morning to your inbox.