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Study Claims To Reveal Massive Losses From Music Piracy

LEWISVILLE, TX (CelebrityAccess MediaWire) — A new study from the Institute for Policy Innovation reports that "bootlegged" music costs the U.S. $12.5 billion and 71,000 new jobs each year.

The report, entitled "The True Cost of Sound Recording Piracy to the U.S. Economy" was compiled using a similar methodology to that developed by the motion picture industry in their efforts in grappling with the piracy, using data culled primarily from the International Federation of the Phonogram Industry study "2006 Global Recording Industry in Numbers."

According to the study, analysis results in these key findings:

a. As a consequence of global and U.S.-based piracy of sound recordings, the U.S. economy loses $12.5 billion in total output annually. Output includes revenue and related measures of economic performance.

b. As a result of sound recording piracy, the U.S. economy loses 71,060 jobs. Of this amount, 26,860 jobs would have been added in the sound recording industry or in downstream retail industries, while 44,200 jobs would have been added in other U.S. industries.

c. Because of sound recording piracy, U.S. workers lose $2.7 billion in earnings annually. Of this total, $1.1 billion would have been earned by workers in the sound recording industry or in downstream retail industries while $1.6 billion would have been earned by workers in other U.S. industries.

d. As a consequence of piracy, U.S. federal, state and local governments lose a minimum of $422 million in tax revenues annually. Of this amount, $291 million represents lost personal income taxes while $131 million is lost corporate income and production taxes.

The report however, does not venture far away from data provided by an industry trade association and little apparent effort was made in finding neutral sources of data. A "confidential" survey was referenced in the endnotes of the report but no additional information is provided about the results of the survey or who conducted it.

The Institute for Policy Innovation describes itself thus "The Institute for Policy Innovation (IPI) is a non-profit, non-partisan public policy "think tank" based in Lewisville, Texas." Founded in 1987 by former congressman Dick Armey, the IPI "concentrates on such issues as taxation and government spending, economic growth initiatives, and government regulation. Current areas of focus include tax cuts and tax reform, intellectual property, Internet taxes and regulation, pharmaceutical issues, Social Security privatization, and educational choice." A brief review of their publications suggests a strong "free market" slant to their analysis as evidenced by their mission statement: "Advocating lower taxes, fewer regulations, and a smaller, less-intrusive government."

This begs the question of how reliable a purportedly academic study that appears to have been designed to support a particular ideology can be. Additionally, the study made no effort at assessing how the changing landscape of music delivery, the increasingly apparent obsolescence of compact disks and the continued insistence by the major labels in using intrusive DRM technology affected the findings, instead placing the entire onus on "bootleggers" – CelebrityAccess Staff Writers