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The Movie Industry’s 200% Error

January 29, 2008

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A week ago today, the Motion Picture Association of America (MPAA) issued what had to be a hugely embarrassing news release acknowledging that an aggressively promoted and widely cited research report commissioned by the MPAA in 2005 significantly overstated the Internet-based peer-to-peer piracy of college students: "The 2005 study had incorrectly concluded that 44 percent of the motion picture industry’s domestic losses were attributable to piracy by college students. The 2007 study will report that number to be approximately 15 percent." The MPAA release attributes the bad data to an “isolated error,” adding that it takes the error seriously and plans to hire an independent reviewer “to validate” the numbers in a forthcoming edition of an updated report.

We should applaud the MPAA for going public with a painful press release about what some have tagged the “200 percent error.” ( Note: Here and elsewhere in this article, this percentage has been fixed from an earlier version -- our own little mathematical error.) Unfortunately, the MPAA has yet to release the actual reports that generated either the 44 percent or 15 percent claims about the role of college students in digital piracy; the public data are limited to PowerPoint graphics in PDF format on the association’s web site. Perhaps as part of its efforts to validate the numbers in the new report the MPAA will also make public the complete document, not just the summary graphics. (Academics do know something about peer review.)

We also have to admire the MPAA’s arrogance. The MPAA now asserts that college students account for 15 percent rather than 44 percent of the P2P piracy affecting the motion picture industry. However the press release says nothing -- not a word -- about the source of the other "85 percent" of the P2P piracy that affects the industry’s revenues, the activities of "civilians" who use consumer broadband services.

Consistent with past practice, the January 22nd MPAA statement continues to blast college students (and by extension campus officials) about the (now much reduced) levels of P2P piracy linked to college students: “Although college students make up three percent of the population, they are responsible for a disproportionate amount of stolen movie products in this country.” Additionally, the news release closes with a terse pledge that the MPAA “will continue to aggressively fight piracy on all fronts including working to forge alliances with other copyright organizations [and] deploying technologies that help combat piracy…”

The new (corrected) MPAA data affirm what many of us who follow this issue have said for several years: P2P piracy is primarily a consumer market issue. The enabling technology is not a campus network but the consumer broadband service provided by cable and telcom firms such as AT&T, Comcast, Earthlink, TimeWarner, and Verizon, among others. Of course you would never know this from last week’s news release.

The MPAA’s statement is also laden with errors and misrepresentations. Let’s begin with some basic facts and simple math. The MPAA’s release says that “college students make up three percent of the [U.S.] population.” In fact, “college students” ages 16-67, account for almost 6 percent of the US population. The Department of Education reports the projected number of full- and part-time college students in two and four-year degree-granting institutions for the 2007-08 academic year totals some 18 million students; the U.S. Census Bureau reports that the U.S. population as of December 2007 totals some 303,579,509 individuals. Do the math and you’ll find that 5.9 percent of the nation’s population could be classified as “college students,” a population that includes full-time undergraduate and graduate students, part-time students in undergraduate and graduate programs, commuter students in community colleges, and adults enrolled in online degree programs, among others.

But the population of college students that most concerns the MPAA are the undergraduates who live in campus dorms and who have 24/7 access to high speed campus networks: these are typically college freshmen and some sophomores in large public universities and the majority of undergraduates in small, private liberal arts colleges. The dorm residents total some two million students and account for 11 percent of the much larger population of 18 million college students, ages 16-67.

I and others continue to provide evidence that colleges have policies and impose sanctions on students who engage in illegal P2P activity using campus networks. Unfortunately, the MPAA and the Recording Association of America continue to press for costly “technology solutions” that campus IT experts have deemed both expensive and ineffective.

Now let’s turn the MPAA’s claim that college students account for a “disproportionate amount of stolen movie products.” The real metric for assessing “proportionality” should not be college students as a proportion of the total U.S. population, which includes millions of infants and the elderly who don’t go the movies or rent DVDs, but college students as a proportion of the movie-going population. Although the MPAA does not publish separate data for college students as a proportion of the U.S. movie-going audience, it does report that individuals aged 12-24 account for 28 percent of the “movie going” public. (Interestingly, the MPAA data seem to ignore all the “moviegoers” under age 12: this makes you wonder about Hollywood’s infamous accounting practices and suggests that no one under age 12 goes to the movies. But what about millions of kids under age 12 who went to see Pirates of the Caribbean, Cars, Night at the Museum, Superman Returns, Ice Age, Happy Feet, and Over the Hedge -- seven of the top 10 grossing films in 2006?)

Extrapolating from the MPAA’s public data on paid admissions (i.e., the number of purchased movie tickets) we see that individuals aged 18-24 accounted for 19 percent of the 1.332 billion movie tickets sold in 2006. Admittedly, a significant number, but not all, of the 18-24 year olds going to movies in 2006 were college students. But without condoning illegal P2P piracy, these numbers suggest that the proportion of downloading that the MPAA now attributes to college students (15 percent) may be roughly proportionate (or possibly even “under-proportionate”) to college students as a segment of the movie going public. (Perhaps the MPAA will offer up a grant for an independent study of the movie-going behaviors of college students, plus additional funds to find the millions of “missing” children under age 12 who are not included in their numbers about movie attendance.)

Then there is the news release’s closing statement about “deploying technologies that will help combat piracy,” which ignores the June 2007 Congressional testimony of both campus information technology officials and an IT industry executive that technology will never provide a comprehensive solution to stem P2P piracy.

At one time seemingly infallible in its continuing efforts to portray college students as digital pirates and campus officials as unengaged and unconcerned about digital piracy on campus networks, the MPAA now seems like the “association that can’t shoot straight,” a reference to Jimmy Breslin’s 1970 mob farce about a bungling Mafia gang. The January 22 press release is the second significant screwup for the MPAA on the P2P front in the past few months: in fall 2007, the MPAA released a software toolkit it said would help monitor illegal P2P activity on campus networks. Unfortunately, as reported by Brian Krebs of The Washington Post, the MPAA’s monitoring application posed a major risk to network security. In sum, it appears that the MPAA can’t count and also can’t do code.

But the MPAA’s press release also raises other interesting questions, some involving the backstory about the press release, some involving public policy questions now before Congress. With regard to the backstory, Inside Higher Ed's coverage of the MPAA press release reveals that members and staff of some key Congressional Committees knew about the errors in the MPAA data almost a week before the press release. Why did it take five days for the MPAA to acknowledge publicly the misleading data?

And then there are the issues involving public policy (and public posturing). Drawing on the MPAA’s widely publicized claims that college students accounted for 44 percent of the industry’s domestic loses due digital piracy, members of Congress have made public statements blasting P2P activity on college networks and by college students. Rep. Howard Berman (D-Calif.) who chairs the House Subcommittee on the Internet and Rep. Bart Gordon (D-Tenn.), chairman of the House Committee on Science and Technology each convened congressional hearings about P2P piracy on campuses in 2007. These hearings, coupled with the continuing efforts of the RIAA and the MPAA, led to Congressional mandates intended to address illegal P2P piracy as part of the College Opportunity and Affordability Act of 2007.

Provisions of the College Opportunity and Affordability Act of 2007 intended to address P2P piracy on campus include reporting requirements and an implied mandate to acquire a “technology solution” to stem P2P piracy. Both will involve significant costs for campuses: at the Congressional hearing on P2P convened by Gordon last June, Arizona State University CIO Adrian Sannier testified that his institution had spent approximately $450,000 on P2P technology deterrent software over the past six years; Mr. Sannier also described illegal P2P activity as an “arms race” that neither side will win, an assessment affirmed by other campus CIOs testifying at the June hearing.

Congressional mandates to stem P2P come at an interesting time for nation’s colleges and universities. In the wake of the recent, tragic events at Virginia Tech and at other institutions, colleges and universities have been scrambling to develop emergency notification plans and acquire notification technologies – some that are simple such as alarms and sirens and others that are complex such as notification and messaging systems that send email, text messages, and voice mail. Concurrently, given the downturn in the economy in recent months, many institutions now confront both mid-year budget recissions and impending budget cuts for the coming year. In many cases, colleges and universities had little or no money in their budgets this year for either notification systems or P2P monitoring technology.

Will college leaders receive a formal apology from the MPAA for the consequences of its “200 percent error.” Will Berman and Gordon issue new statements in the coming weeks, toning down their prior criticism and also admonishing the MPAA for providing bad data that led to ill-conceived legislation - the costly P2P reporting and enforcement mandates in the College Opportunity and Affordability Act?

And what about the source of the “other 85 percent” of the P2P piracy that affects the movie industry? Much as the RIAA and MPAA have named the campuses where they allege P2P piracy occurs, will the two associations now go public with (hopefully accurate) data about the level of P2P piracy that occurs on consumer broadband services? (Are AT&T broadband customers more likely to engage in P2P piracy than Earthlink, TimeWarner, or Verizon customers?) Much as the MPAA and RIAA leadership has criticized campus officials for not engaging on P2P issues, will the MPAA and RIAA’s leaders now take cable and telcom industry executives to task for their benign efforts to educate their customers about copyright and to address P2P activity on consumer broadband services?

Let me affirm (yet again) that the campus community does not condone digital piracy and that I am not condoning the behaviors of either college students or “civilians” who engage in digital piracy . As I stated in a November commentary published by Inside Higher Ed, "illegal P2P downloading is a messy issue. But the swiftboating efforts of the RIAA and the MPAA to portray college students as the primary source of digital piracy will not resolve this problem, in either the campus or the consumer markets. Neither will federal mandates that ultimately will mean pass-through costs for students."

Next steps? Perhaps the MPAA’s press release acknowledging its “200 percent error” will set the stage for new, less rancorous private and public discussions about P2P piracy. Colleges and universities respect copyright; colleges and universities are engaged in serious efforts to inform and educate students about the importance of copyright. And MPAA and RIAA officials, beginning with MPAA President Dan Glickman and RIAA President Cary Sherman, should acknowledge, respect and strongly support the continuing efforts of campus officials to address copyright issues, in part by ending the public posturing that portrays colleges and universities as dens of digital piracy.

Kenneth C. Green, a visiting scholar at the Claremont Graduate University, is the founding director of the Campus Computing Project.

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Comments on The Movie Industry’s 200% Error

  • New - or old - math
  • Posted by Abbott Katz on January 29, 2008 at 6:45am EST
  • I was only a soc major, but wasn't the error really closer to 200%? If the piracy rate had been 30% - that is, a doubling of the actual 15% - one would declare an increment of 100%. Add another 15% to attain the orginally-reported 45% or so, and you get 200%. I think.

  • Math
  • Posted by Sandema on January 29, 2008 at 9:55am EST
  • Ah, math. I was only an English major (egads!), but here's how I understand ratios. A 3:1 ratio can be expresses several different ways:

    1. Times. "Forty-five is THREE TIMES 15."
    2. Percent of. "Forty-five is 300 PERCENT OF 15."
    3. Percent larger than. "Forty-five is 200 PERCENT LARGER THAN 15."
    4. Triple. "Forty-five is triple 15."

    The consilience between Nos. 1, 2, and 4 above show that we have usually attributed some sort of threeness to the 1:3 ratio. But if Abbott wants to see it like No. 3, he's free to do so, if he can get past his apparent support for the RIAA/MPAA's silly and dangerous bullying.

  • Multiple approaches
  • Posted by Abbott Katz on January 29, 2008 at 10:40am EST
  • Truth to be told, I hadn't taken any position on the industry's position - just doing the math in my own, idiosyncratic way. It seems to me that doubling a number increases it by - 100%. So tripling it...

  • P2P generation anyone?
  • Posted by Peter White V , College Student on January 29, 2008 at 12:00pm EST
  • It's not unbelievable that a good bit of the movies downloaded are from college students. I'd bet 90% of the not mentioned 85% are between the ages of 15-25 and what's right in the middle? Hmm college age individuals.

  • going after college students 'cause...
  • Posted by R Halloran on January 29, 2008 at 1:00pm EST
  • going after the youngsters is bad PR (the case of one of their investigators calling up pretending to be a grandparent?). Also, the parents are more likely to have the resources to put up a fight. The "starving-student" crowd are easy pickings.

  • The Answer isn't in the Title
  • Posted by Dave on January 29, 2008 at 1:00pm EST
  • The answer the math issue isn't math. It's English.

    The title doesn't say "300% Incremental Error," so it's open to interpretation.

    All arguments above are correct in their conclusion, but the title doesn't take a side in this.

  • Number and what they mean
  • Posted by Paul Jones at UNC - Chapel Hill on January 29, 2008 at 3:20pm EST
  • The numbers mean nothing unless and until the means by which they were collected is fully disclosed and that data is then made available for independent review -- just like real social science and *less* like propaganda.

  • Percent Error and other musings
  • Posted by C. Templeton at Georgia Institute of Technology on January 29, 2008 at 3:55pm EST
  • Abbot is right, the MPAA's error is (just about) 200%. Percent error is calculated as (measured result - actual number)/actual number. In this case, it's (44-15)/15, which is about 200%. Regardless, that's an egregious error by the MPAA. I know if I got a 200% error on one of my labs... I'd probably get a zero.

  • Posted by Darrell on January 29, 2008 at 3:55pm EST
  • The MPAA representing movie downloading as lost profits is a gross misrepresentation of reality. It assumes that downloaders would purchase their products, if downloading was not an option. This is simply dishonest on their part. If the internet disappeared tomorrow, I submit that their profits would change very little. Downloaders either can't or won't spend what they either don't have or would prefer spending elsewhere. Since Americans seem to be spending everything they make on a regular basis and are spending record amounts on entertainment-related activities, the industry, as a whole, is getting their more than their fair share of the earnings of average downloading Americans. They should stop wasting their time and money on failed downloading deterrence strategies and use the savings to improve the quality of what they are selling. That would most assuredly have a better chance of increasing their profits.

  • Posted by FooBear on January 29, 2008 at 4:00pm EST
  • You might want to be careful with your adjectives when you talk about RIAA and MPAA "swiftboating" of college students.

    Keep in mind, the swiftboat ads were true, while the RIAA/MPAA campaigns are largely misinformation.

    Kerry might have hated what the swiftboat ads said about him, but he was never able to debunk them, because they represented a classic case of speaking truth to power.

    The record and film industries, on the other hand, use inflated statistics and outright lies in an attempt to prop up an increasingly obsolete industry.

  • Class Action
  • Posted by JohnMc on January 29, 2008 at 4:50pm EST
  • Mr. Green,

    Might I suggest that a class action be instituted for restitution of the various educational institutions that have spent the millions trying to comply? In fact I would be so bold as to suggest that Harvard be contacted to act as prime council. Seeing as how both the RIAA and MPAA has left both Harvard and Yale out of any ongoing suits. Harvard must scare them -- billions in endowments and an army of 4L's to unleash.

    Chance of success? 60/40 in my book. If the Ivy's are leading the charge maybe 80/20. That would be pretty good odds. By bringing suit the MPAA would have to comply with court disclosure of the underlying documentation. Then the whole sordid affair would be out in the open.

  • Don't get wrapped around the axle
  • Posted by SMSgt Mac on January 29, 2008 at 8:30pm EST
  • OK this thread is now downright FUNNY. I hope does not reflect on the state of higher education today. I guess we'll find out from the comments to follow.
    As an old engineer, I have no problem with the use of the 300% figure. Since the original and erroneous estimate of impact IS approximately 300% of the estimate now asserted by the industry, and the relative percentages were provided, the intended interpretation of the comparison is explicit. I wish my contractual performance specifications I work with were half as clear in their meanings.

    For the admittedly non-math inclined, quibbling over the expression of the error, while missing the point that the recording industry is going after the colleges and universities as easy pickings, and that the students are NOT the major problem claimed earlierby the industry(even IF they fudged the numbers)is called 'caviling'.

    This effort is part of a broader one whereby the industry associations are not only going after piracy, but in fact are seeking to redefine the very concept of 'fair use'.

    Guard your wallets.

  • A (late) Correction
  • Posted by Kenneth Green at The Campus Computing Project on January 30, 2008 at 4:40am EST
  • My apologies to those of you who took me to task for the "300 percent" error in the original title of this commentary. The "300 percent" number originated in the subject line of a listserv post regarding last week's MPAA press release. Clearly it was my error for not checking and correcting the math. However, the error was corrected in a "late update" of this article.

  • Foobear...Stop the propoganda
  • Posted by Warren McGovern on January 30, 2008 at 2:05pm EST
  • "Keep in mind, the swiftboat ads were true, while the RIAA/MPAA campaigns are largely misinformation."

    Why? This thread had nothing to do with John Kerry.

    What you wrote is worse than a lie; it is propaganda. From this point I will not take anything you say seriously.

    The Swiftboat Ads were filled with lies. Check the Navy records and affidavits. If you continue to say these things you slander our Navy and the freedom they fight for.

    If you wrote this in jest then hopefully you realize you have just played your part in the propaganda machine. Now please step off. If not then I am willing to bet a $1 that you also believe all those propaganda emails that say Barack Obama is a Muslim. Just stop it.

    Full Disclosure: I did not vote for J. F. Kerry in the last presidential election. And no I won't include any citations if you ask for them. If you really want to learn look it up yourself. Otherwise you are one of those who will continue your stupid game of refuting everything that is said and then when you can no longer do that you switch topics.

  • Posted by j on January 30, 2008 at 4:55pm EST
  • 300 was a great movie!!! I think I will download it!!1