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Report: DVD Piracy Cost L.A. County $2.7B in 2005

16 Feb, 2007 By: Erik Gruenwedel

Worldwide piracy of entertainment, which includes file sharing on the Internet and illegal copies burned on blank DVDs and CDs, cost Los Angeles County more than $2.7 billion in lost revenue in 2005, according to a new study.

The report by the L.A. County Economic Development Corp. (LAEDC) found that piracy to the motion picture industry represented more than 50% of the county's total $5.2 billion lost, which affected nine separate industries.

Other entertainment industries impacted by piracy included the music industry with $851 million in losses and video games with $355 million.

The LAEDC report focused on L.A. due to the local presence of all major studio corporate headquarters.

The report cited statistics by the Motion Picture Association of America, which tabbed piracy affecting foreign and domestic producers, distributors, theaters, video stores and pay-per-view operators resulted in $18.2 billion in lost revenues in 2005.

The LAEDC said piracy caused the elimination of more than 45,000 entertainment jobs within the county, which resulted in $2.6 billion in lost wages, $110 million in California state income taxes and $52.1 million in sales taxes.

The motion picture and television industries in 2005 employed more than 500,000 in California, including about 152,879 people in L.A. County and 53,445 in the city of Los Angeles.

“The LAEDC report confirms what our industry has been consistently saying: the crime of film piracy doesn't just hurt Hollywood, it damages economies everywhere movies are produced and sold,” said Dan Glickman, chairman and CEO of the MPAA.

Separately, Glickman testified Friday in Washington, D.C., before the House Ways and Means Subcommittee on Trade regarding the need to mandate proper intellectual property rights enforcement in China.

The sale of counterfeit movies in China accounts for more than 90% of all DVDs sold in the country and resulted in $244 million in lost revenues for U.S. studios in 2005.

“China is the most difficult market in the world for the U.S. motion picture industry,” said Glickman. “Regrettably, to coin a phrase, if you did not see a counterfeit DVD, you were not in China.”

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