Jun 18, 2019 - 1:00pm

Quick Take: Your Primer on Digital Piracy and Its Impact on the U.S. Economy

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Video streaming is one of the most popular forms of content consumption, with more than 500 licensed online video portals and more streaming subscribers than paid-TV subscribers. Recent research indicates that 80% of digital piracy is now due to streaming, largely encouraged by the widespread proliferation of piracy devices and apps that make pirated content easier to access. 

While piracy remains a problem in the U.S., our research indicates that the vast majority of these losses are due to digital video piracy of U.S. content by non-U.S. residents. Overall, approximately 26.6 billion viewings of U.S.-produced movies and 126.7 billion viewings of U.S.-produced television episodes are digitally pirated each year, mostly from outside the U.S.

Why does it matter: 

The U.S. movie and television production industry is a crucial pillar supporting our economy. In 2017, the industry accounted for about $229 billion in domestic revenues and supported 2.6 million jobs in the U.S. The proliferation of streaming services provides consumers with significantly more choice and convenient ways to consume all of the newly produced content. However, digital piracy deprives the industry and the hard-working Americans who power it of revenue and eliminates additional opportunities to generate content. This illegal activity threatens to stifle creativity and innovation in the entertainment production industry—a leading driver of cultural and economic development.

What’s the latest: 

The U.S. Chamber’s Global Innovation Policy Center (GIPC), in partnership with NERA Economic Consulting, released new research, “Impacts of Digital Piracy on the U.S. Economy,” which explores how digital video piracy results in significant losses to the U.S. economy as a whole. The study uses macroeconomic modeling to measure the projected financial impact of digital video piracy and demonstrates substantial job loss for the content production industry.

Numbers to know:

$29.2 billion. Digital video piracy deprives the U.S. economy of a minimum of $29.2 billion in reduced revenue each year.  

Our take: 

“The recent proliferation of streaming services and content exemplifies what happens when innovative technologies rapidly transform an industry. This transformation within the content industry creates ease for the consumer and adds countless opportunities for content creators and innovators. Now, you can watch your favorite team live on your smart device anywhere in the world. However, because there is such rapid change to the industry, it presents an opportunity to those who aim to take advantage of these ubiquitous new technologies. Digital piracy is now a serious problem that significantly harms the U.S. economy and the innovators who drive it. The findings from this study highlight the urgent need to coordinate enforcement efforts against illegal streaming and strengthen IP protections both in the U.S. and abroad. GIPC will continue to champion strong IP protections to promote creativity and protect content online.” – Jonathan Weinberger, Senior Vice President, Global Innovation Policy Center

What’s next: 

Although there is no single tactic to combat digital piracy, any solution will require global collaboration among industries and governments to educate consumers and strengthen law enforcement efforts against illegal streaming. The study points to the need to expand legal options for creators in cases of infringement, a reform that could decrease the frequency of online piracy.

Read the full study here.

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