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Editorial

How much do piracy and counterfeiting hurt the industry? This question is extremely valuable. Depending on whom you are listening to, the figures vary widely.

Are there any reliable figures? The United States Government Accountability Office (GAO) tried to answer it in its 41-page report¹.

According to the GAO, it is impossible to have reliable data. Nevertheless, the report makes an exhaustive review and analysis of the numerous reports proposing data. Each time, the GAO explains the weaknesses in the methodology. Therefore, the report offers an interesting exhaustive bibliography of existing reports on piracy.

The GAO never does state if the reports are under estimating or over estimating the real figures. The report only states that no reliable method exists to estimate it. This conclusion is totally logical. How can you estimate something that you cannot measure? Are the observed profits of pirates enough to properly estimate the losses, or what other factors need to be considered? If the institutions had precise knowledge of piracy activities, they would then have capacity to stop it.

The report gives a good qualitative analysis of the consequences of piracy. The described “positive” effect is rather anecdotic. The negative effects of piracy are clear.

Piracy is real and undoubtedly on a huge scale. Counterfeited DVDs are easy to find, even in Western countries. Peer-to-peer networks are offering a staggering amount of illegitimate content. A new generation of piracy is coming with even more striking power. Our guest, Chris Carey, will shed some light on the new types of piracy and the business models of this new generation of pirates.

E. DIEHL,
Technical Editor

1 Loren Yager, Intellectual Property: Observations on Efforts to Quantify the Economic Effects of Counterfeit and Pirated Goods (GAO, April 12, 2010), http://www.gao.gov/new.items/d10423.pdf