Unexpectedly Intriguing!
June 29, 2012

Can anyone trust the U.S. entertainment industry to be honest with the business numbers they make public?

We've all heard of Hollywood's accounting frauds, where even those small movies with tiny production budgets that unexpectedly go on to become huge blockbusters making millions and millions of dollars at the box office somehow never generate a profit.

But what about the other things the moguls of the entertainment industry say about their business? Things like the number of jobs and the amount of money they say are lost every year in their industry because of the damage done by copyright piracy?

Rob Reid takes on the entertainment industry's "©opyright Math™" in the following TED presentation (HT: Barry Ritholtz):

Some quick notes:

  • The diameter of a penny is 0.750 inches (19.05 mm). It takes a lot of pennies to get to Mars!
  • If Hollywood and the music industry are hurting in their pocketbooks from copyright piracy, it isn't showing up in the amount of GDP they generate in the U.S. every year. See the Congressional Research Service report below....
  • Wyden Memo from CRS on Movie Industry
  • Nor does it seem to be affecting the government's count of the number of people who work in the motion picture and sound recording industry in the U.S. each year in any meaningful way.

All in all, it appears that the answer to the question we asked at the beginning of this article is simply "No."


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