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Copyright Industries Add Nearly $800 Billion to U.S. Economy in 2001

23 Apr, 2002 By: Tamara Coniff

Motion pictures, music and television are among the copyright industries that contributed a total of $791.2 billion to the U.S. economy last year, according to a study released Monday by the International Intellectual Property Alliance.

Moreover, these copyright industries —which also include computer software, DVDs and print media — have created jobs at a much faster rate than such leading industries as aircraft, car and steel manufacturing. In 2001, 8 million people, or about 6 percent of all U.S. employment, were working in copyright-related fields.

The report comes at a volatile time for the music and film industries as they struggle to find legal and legislative solutions to protect their copyrights with the advent of Internet and technological piracy. During a Senate Commerce Committee hearing in Washington last month, Walt Disney Co. president and CEO Michael Eisner accused computer manufacturers of profiting from copyright piracy. Disney and News Corp., with the support of a bill introduced Sen. Ernest Hollings, D-S.C., are pushing for legislation to ensure copyright protection on digital devices (HR 3/22).

The music industry is facing the same problem as record companies have been ensnared in a legal battle with file-swapping service Napster Inc. for the past two years. Napster and similar peer-to-peer online services allow users to download music at will for free. Labels also are sorting out the legal ramifications of introducing copy-protected CDs into the marketplace.

The report's sponsors, which include the MPAA and the Recording Industry Association of America, hope to use the growing economic clout of Hollywood and other creative industries to press the government for expanded legal protections for copyright-holders.

According to the report, core copyright-based industries represented 5.24 percent, or $535.1 billion, of the U.S. gross domestic product, which is the total sum of all goods and services produced within the nation's borders. During the past 24 years, the copyright industries' share of the GDP has grown more than twice as fast as the rest of the American economy.

This growth is largely attributed to the United States' strong copyright laws and the enforcement of these laws -- which, with the advent of Internet piracy, has the film and music businesses clamoring for solutions and means of protecting their intellectual property rights going forward.

"Robust copyright protection and enforcement, in traditional markets and in the world of the Internet, have become even more indispensable to strong economic growth, both here and abroad," IIPA president Eric Smith said. "Yet this continued growth is in danger."

Smith pointed to last year's 5 percent drop is music sales as an example. In fact, shipments of music products declined 10 percent last year, a drop the RIAA largely attributes to Internet piracy and illegal CD burning.

MPAA chief Jack Valenti echoed Smith's statement.

"Protection of our intellectual property from all forms of theft -- in particular online thievery and optical disc piracy -- must take precedent if the United States is to continue to lead the world's economy," Valenti said. "The copyright industries are this nation's most treasured assets."

The IIPA report, "Copyright Industries in the U.S Economy: The 2002 Report," was written by Stephen Siwek of Economists Incorporated.

Tamara Conniff reported from Los Angeles; Craig Linder is a reporter for States News Service in Washington.

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