February 12, 2008

MPAA Overestimated College Downloads

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While the Motion Picture Association of America was eager to point the finger at college students across the nation for causing billions of dollars in damage due to illegal downloading via peer-to-peer (P2P) file sharing, it turns out the MPAA did not double check its homework.
A 2005 study conducted by L.E.K., a consulting firm hired by the MPAA, claimed that 44 percent of the movie industry’s domestic losses were attributable to illegal downloads by college-age individuals. However, as L.E.K. prepared a new version of the study for 2007, it realized that the number was actually 15 percent.
In what many press members have dubbed as the “200 percent error,” the MPAA contends that it still loses $250,000,000 of revenue from that 15 percent of the population. [img_assist|nid=27678|title=S.A. Votes ‘Yes’ on Direct Election of President, V.P.|desc=|link=node|align=left|width=|height=0]
The MPAA admitted in a press release on Jan. 23 that this was an “isolated error” and that in the future, it would take measures to have an independent reviewer verify the data. But the MPAA has come under fire for not publicly releasing either report to be reviewed by an independent source not affiliated with the organization.
Steve Worona ’70, director of policy and networking programs for EDUCAUSE, a nonprofit association that encourages higher education by promoting intelligent use of information technology, said, “We still have not seen the details of the study, and there’s little value in research that isn’t transparent and can’t be independently verified.”
This press release comes on the heels of the MPAA’s and the Recording Industry Association of America’s aggressive campaign to prevent pirating and copyright infringement through P2P services.
Tracy Mitrano grad ’95, director of information technology policy and computer policy and law programs for the Office of Information Technologies, said that it might have been appropriate to target college students 10 to 15 years ago when only institutes of higher education had the “pipes” or high speed broadband connections to access content, but the landscape of digital information sharing has changed so much that it is unfair to target efforts squarely toward college students.
She suspects that the MPAA came forward with this information because it realized that the RIAA’s aggressive stance towards institutions of higher education does not translate to higher profits and recouped costs.
“The MPAA is beginning to recognize that the RIAA’s tactic of alienating customers through intimidation, settlement letters and rancid rhetoric of higher education’s alleged complicity in the copyright infringement question is not a successful business strategy,” Mitrano said.
The MPAA’s admission of error could affect how the House of Representatives votes on the College Opportunity and Affordability Act of 2007, which is set to be voted on sometime in the middle of February.
One part of the bill focuses on helping universities prevent digital theft. However, according to Worona, this piece of legislation is based on the erroneous report.
Worona said that the version of the bill that is circulating through the House stipulates that colleges must do two things. First, they must create a plan to offer commercial services that compete with P2P services such as Kazaa and Limewire. Second, colleges must also develop a plan to implement technical measures that prevent copyright infringement.
Cornell has tried to adopt this plan in the past, first by letting students stream music from Napster from 2004 to 2006 and then by partnering with Ruckus Network Inc. to offer both video and music downloads that can played for free on a computer and be uploaded to a Microsoft-compatible mp3 player, for an additional $20 charge per semester. Users of the site must also renew their right to play a song every 30 days. The content obtained from the website cannot be burned onto a CD.
“EDUCAUSE is strongly against these requirements for the reasons that they are time-consuming and expensive to produce, and ultimately ineffective,” Worona said. “You and your friends already know that the commercial services offered by your school don’t meet your desires. That’s why you didn’t use them, even when they were free. And technology experts have concluded that blocking and filtering systems are disruptive and don’t work.”
Mitrano contends that the problem of P2P file sharing involving copyright infringement stems from a much larger global phenomena, where there is a strong consumer demand for American media.
“In 2008 and for some time now, broadband connections and DSL have changed the picture and the populations of people who engage in P2P file sharing. The U.S. is No.18 in the world of broadband connections,” she said.
In accordance with the Digital Millennium Copyright Act, the University receives DMCA notices. The procedure is to identify who the user is from the Internet Protocol Address and then give that individual the notice. However, the University has not given out any names of students to the RIAA. When a student receives the DCMA notice, he pays for the server costs of $35 and must take a Copyright Education Course, which is designed to inform the student about the complex issues surrounding copyright and Internet technologies in society and higher education as a whole.
One such issue that many students do no understand is what constitutes an illegal copy of media content that could result in a copyright infringement. Many critics cite the current business model for media distribution as the reason why the entertainment industry has cracked down so hard on copyright infringement.
The current model measures the number of copies of a specific work such as a song, but as Worona argues, it is impossible to operate today’s digital networks and devices without making copies. He said, “When you move an mp3 file from your computer to your iPod, you now have two copies.”
However, Prof. Jennifer Gerner, policy analysis management, contends, “Students don’t show up to RIAA seminars anymore because they are becoming irrelevant as alternative ways on how to legally offer services catches on.”
She believes the reason the copyright question has gotten so out of hand originates in the fact that law has not kept up with technology such that the RIAA and MPAA are losing money through distribution, not the content produced by their artists or films.
“It isn’t about the artist at all. Record companies are concerned with distribution and if artists can do that independently on the Internet, who needs these guys? The Internet is becoming the easiest and cheapest form of [distribution]” she said. “It is no coincidence that the RIAA and the MPAA are the ones taking legal action and not the Directors Guild of America or the Screen Actors [Guild].”
In response to the growing desire for the on-demand media content, companies have had to figure out what the best ways are to offer their services while still making a profit.
“Neither EDUCAUSE nor any part of the higher education community condones copyright infringement. We believe songwriters, artists and the other content creators should be compensated for what they do,” Worona said.
There have been attempts at adapting different business models with some success most notably in the television networks and the rental movie industry. NBC, ABC and FOX all offer full episodes of their nightly lineups the morning after they air.