The bizarre science of copyright math

Don't you just love RIAA statistics? co-founder Rob Reid took a look at the math behind some of those crazy losses projections during a TED talk, and the results are pretty interesting.

To start with, Reid takes a look at the projected loss from every song that gets pirated, per the Copyright Damages Improvement Act of 1999 - that totals in at $150,000.00 for every single pirated song. Industry leaders feel that this number is a little low, since it doesn't account for inflation. But assuming that someone fills up an iPod Classic with pirated content, which would end up being somewhere around 40,000 songs, then they're carrying around $8 billion worth of stolen goods in the palm of their hand! Isn't that awesome?

The job losses are even more staggering. Each iPod accounts for about 75,000 lost jobs! Sadly, this means that the music industry is no longer employing anyone, since they only employ around 45,000 people. Another industry fallen to the scourge of digital piracy.

And what about the MPAA's statistics? They're looking at $58 billion in losses and have been forced to cut 370,000 jobs from the hardworking American labor force. Interestingly, though, movie and TV revenues are actually up from their 2000 statistics. In fact, the only losses that Reid was able to find happened to the music industry, amounting to about $8 billion of losses (one iPod classic). The rest of these losses must therefore be due to industries that didn't exist in 2000, such as ringtone piracy.

Oh, and $58b? Yeah, that's the size of the entire US agricultural industry:

Reid concludes his talk by pointing out that even though this math is a little bit hard to understand to us mere mortals, it's a field best left to experts who get the science behind it. For his next talk, he'll be taking a look at the real problem facing the US entertainment industry: alien music piracy.

In the meantime, you can take a look at the video of his talk, courtesy of TED. Pretty neat stuff, even if it makes no sense whatsoever.

Images via TED

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HA ROFL I liked that video it's probably the most accurate piece of media regarding this "Piracy" issue out there today

also I'd like to take this opportunity to wholly blame all the losses on Apple iPod owning aliens everywhere

Wow, while drinking coffee all day 4 blocks away from this in Long Beach at a café and not being there hearing it in person makes me feel dumb. I see Ted conventions every year.

Do they even count in the people who would never buy the music if it were not for free? These are the people that ask us (The purchasers) to make a copy for them. Some of these people also rather record it from the radio than to just go in to the store and buy it. These people in my book take up about 75% of all the freeloaders. My point is, is that the RIAA is not losing but a small percent of their stupid predicted losses..

Would anyone happen to have any stats on how many jobs were created by the piracy industry? For example, all the IP lawyers, programmers who create IP security software like DRM crap, fraud, counterfeiting detectives, people at RIAA,, MPAA, etc, Also kind of funny how all these people are trying to eliminate piracy, but it is because of piracy that is keeping some of them employed. So if piracy was ever successfully eliminated a lot of other jobs, wages would be lost as well.

Merely justification for when they approach their pay-rolled politicians for new laws and for the idiot public that believes everything the TV talking heads tell them when reading off the prompters. They should be treated like the Mafia instead of an industry.

RIAA and MPAA formula for the industry's economic lost:

$ cost of privacy = # of internet user * $ they think each item is worth * 2
$ of profit = $ actual profit - $ actual profit
$ of econ lost to the industry = $ of profit - $ cost of privacy

so yea, about right

So, wait, you mean that the RIAA and MPAA might not be telling the entire truth? Well, you could knock me over with a feather.

Slugsie said,
So, wait, you mean that the RIAA and MPAA might not be telling the entire truth? Well, you could knock me over with a feather.

Slugsie said,
So, wait, you mean that the RIAA and MPAA might not be telling the entire truth? Well, you could knock me over with a feather.