MPAA's Data Oops: How Will Congress React?

By Cameron
January 23, 2008

This morning the Associated Press reported that a high-profile study the Motion Picture Association of America issued in 2005 is significantly flawed. Specifically, the study said that 44 percent of the industry’s domestic losses came from students’ illegal downloading at universities. Today MPAA says that due to “human error” that figure is more like 15 percent. Some are even arguing that it is more like three percent because of further flaws with the study.

That’s quite a difference and calls into question the credibility of the entire report. The report also found that the studios lost $6.1 billion to piracy in 2005. Is that figure correct? Unfortunately, we aren’t quite sure because the authors never released the full study including the methodology.

One might point out that quibbling over the numbers isn’t a big deal because the figure didn’t go from 44 percent to zero. Setting aside whether the new data are accurate, errors like this are a big deal because they misinform the critical policy debates that often surround studies like this. In fact, this report helped drive recent Congressional proposals to either require universities to install technology filters or strong-arm them to do so.

In 2006 the House Judiciary Committee held a hearing titled An Update: Piracy on University Networks. The letter announcing the hearing leads with the 44 percent statistic, which is used to frame the hearing. That hearing was used as a platform for a legislative proposal Congress is likely to consider next month (see story #6 of newsletter) dealing with campus-based filtering.

We haven’t discussed filtering proposals; it will be a topic for future posts. In general, we find them troubling. Filters can’t distinguish between bad actors transmitting copyrighted works illegally and people exercising their fair use rights. The point here is that advocates, think tanks and policymakers have used the 44 percent figure to justify legislative action in this area. So the question is will Congress change course now that it is clear the data is flawed?

Regardless of the outcome of the proposed legislation, it is hard to have a rational debate about controversial issues when advocates are throwing around deeply flawed data whose collection and analysis aren’t transparent.