OPINION
MPAA Raid Becomes Media Circus

A recent "operation" of the Motion Picture Association of America, whose "Keystone Kops" unit is run by ex-U.S. Department of Justice deputy assistant attorney general John G. Malcolm, was a media circus.

Helped by the Southern California High Tech Task Force, Malcolm and his crew raided New Century Media, a legitimate Los Angeles duplicating business, which, Malcolm charged, was an "illegal DVD/CD replicating plant," he said as he and his unit seized what they claimed would be "US$30 million in illegal stampers and DVDs."

Getting Real

However, in reality the $30 million figure turned out to be pure Hollywood fiction. No "pirate" product was seized and Jennifer Yu, New Century Media's owner, said false allegations have "damaged the business that my husband and I spent 14 years to build."

Yu is now accusing the MPAA of slander, saying she's in the duplicating business, and that's it. No connection to "pirates" on land or at sea. Now, the MPAA "stamped-out" claims notwithstanding, New Century Media is still very much open and doing business.

So how did the cartel-pseudo-cop unit arrive at its "$30 million in illegal stampers and DVDs" figure, widely quoted as hard fact by the mainstream media?

Easy, says the MPAA. All it had to do was estimate the value of the DVDs seized during the raid, "as well as the value of DVDs that could be produced using the equipment."

Jennifer Yu says the $30 million (based on DVDs seized and not any criminal activity) was inflated by 2,000 percent.

Fuzzy Math

This kind of calculation is child's play for the entertainment cartels. And it's routine for the mainstream press to parrot their puff pieces as though they come from credible sources.

Similarly, MPAA brother organization the RIAA (Recording Industry Association of America) instigated, and took part in, a New York Police Department raid which, RIAA spokeswoman Amy Weiss "estimated," resulted in the seizure of "the equivalent" of 421 CD burners.

How can you have "the equivalent" of 421 CD burners, wondered Internet activist Bill Evans. He asked Weiss, and it turned out the raiders had actually seized 156, and not 421, burners.

"We stated that the raid was the equivalent of 421 burners, as we need to put these operations in perspective based on burning capacity and output, not the number of physical slots for the discs," Weiss explained. "Since they burn 4x burners -- it is roughly 4xs the numbers of burners."

The movies and studios are not unique for their tendency to turn out spurious statistics.

The major software makers join their entertainment industry colleagues in claiming they're being ruined by "pirates" and the BSA (Business Software Alliance), of which Microsoft (Nasdaq: MSFT) is a staunch member, claims "piracy"- [read "counterfeiting"-] related losses have increased from $29 billion to $33 billion. How did the BSA arrive at this so-very-precise number?

Mystery Solved

Britain's The Economist figured it out. It was those creative accountants again. The BSA (or is it just BS?) piece says: "The association's figures rely on sample data that may not be representative, assumptions about the average amount of software on PCs and, for some countries, guesses rather than hard data. Moreover, the figures are presented in an exaggerated way by the BSA and International Data Corporation (IDC), a research firm that conducts the study. They dubiously presume that each piece of software pirated equals a direct loss of revenue to software firms.

"To derive its piracy rate, IDC estimates the average amount of software that is installed on a PC per country, using data from surveys, interviews and other studies. That figure is then reduced by the known quantity of software sold per country-a calculation in which IDC specializes. The result: a (supposed) amount of piracy per country. Multiplying that figure by the revenue from legitimate sales thus yields the retail value of the unpaid-for software. This, IDC and BSA claim, equals the amount of lost revenue."