MPAA Talks Turkey; Pirating Costs Based on Futuristic Fantasy

June 20, 2008
by David Kravets

If ever there was a time to question the Motion Picture Association of America's accounting of lost income to piracy, the time is now.

Consider two MPAA announcements Wednesday in which 88 burners and 200,000 pirated DVDs were seized in Australia and four men were arrested with various pirating equipment in Hong Kong, with 6,200 unauthorized DVDs found.

The association said the Hong Kong haul was worth a "potential" $20 million. The Australian catch was worth "an estimated street value" of about $16.6 million.

That's a lot of money per disc. Scratch that forehead. Break out the calculator. THREAT LEVEL, however, suggests peering into the crystal ball.

Let's start with the Australian haul, where 200,000 DVDs were discovered. That's $16.6 million divided by 200,000 dics, equaling $83 per movie disc. Or is it?

The math changes, however, perhaps to the new futuristic math.

The MPAA says it's really 2.2 million DVDs (per year) that were discovered in Australia, because the burner lab found has "the potential of running 10 hours per day, seven days per week," and capable of producing "over 2.2 million DVDs a year with an estimated street value of over $16.6 million."

So $16.6 million in street value, divided by 2.2 million discs, equals $7.54 per non-manufactured disc, per an annualized basis.

Let's move to the Hong Kong cache. Some 6,200 pirated discs were found, and the value was affixed at $20 million, meaning each disc is valued at $3,225.80. Or is it?

The announcement emphasized that the replicating and the printing machines discovered at a Hong Kong factory "were capable of producing over seven million pirated optical discs per year generating a potential value of US $20 million."

Assuming that the $20 million is annual revenue, the seven million imaginary, pirated discs are each worth $2.85 -- again per an annualized basis. That's $2.85 lost per each Hong Kong disc that wasn't even produced yet and $7.54 for each unproduced disc in Australia.

The MPAA says that in 2005, the latest year for which data was available, the industry lost $6.1 billion to illegal copying and internet piracy.

Who's talking turkey?

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