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Piracy costs Hollywood $6.1bn
04/05/2006 22:38 - (SA)
Los Angeles - Hollywood's major movie studios lost $6.1bn in revenues to illegal videos, DVDs and internet downloads in 2005.
Studio representatives said the amount was 75% higher than previous estimates.
In a study released on Tuesday, the Motion Picture Association of America (MPAA), which represents the major studios in United States government affairs, said the study is the first to measure losses from web downloading.
The study also reported piracy in Asia as less of a problem than in North America and Europe.
It showed that losses stemmed not only from fewer ticket sales but also from fewer DVD sales, which has been one of the growing business arenas in recent years.
MPAA chief executive officer Dan Glickman said: "This study will help us better analyse and focus our efforts to fight movie theft."
For years, the MPAA has said it believed the studios lost about $3.5bn in annual revenues from the sale of illegal videos and DVDS. It had never estimated lost sales from the web.
Losses in US totalled $1.3bn
The study was conducted by LEK Consulting LLC and commissioned by the MPAA.
It showed MPAA-company losses in the US totalled almost $1.3bn.
Mexico was No 2 on the list, accounting for $483m in lost sales. The United Kingdom was No 3 at $406m.
Of the $4.8bn in lost revenues in all international territories, nearly half came in Europe.
The research challenges a common belief that Asian countries, such as China, had the most piracy offenders.
But it did point out that, on a percentage basis relative to overall market size, losses to MPAA-companies were higher in China than anywhere else.
China was behind Russia and Spain on the list of lost sales to MPAA-companies - with a total $244m, compared to $266m for Russia and $253m in Spain.
Illegal copying is $1.4bn lost
But relative to its size, 93% of potential sales in China are lost due to piracy. In No 2 Russia, 81% of sales are lost.
"Bootlegging", which the study defines as buying illegally copied movies, DVDS or video CDs, accounted for $2.4bn in lost sales. "Illegal copying" - making copies for yourself or getting them from friends - made up $1.4bn.
Illegal downloads cost the studios $2.3bn in lost revenues.
In the US, illegal copying is the most prominent way to get pirated movies, found the study. In other countries, downloads and bootlegging are more commonly used.
The study found that the average offending piracy culprit is male, between 16 and 24-years-old, and lives in urban areas.
Research for the study was conducted in 28 countries, over 18 months.
- Reuters
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South Africa
