January 24, 2008 / 5:00 AM / in 10 years

Studios admit error in piracy study

WASHINGTON (Hollywood Reporter) - The major motion picture studios had egg on their faces Wednesday as they tried to explain to Congress and educators why a key number in a highly touted study of on-campus piracy was wrong.

A 2005 study commissioned by the Motion Picture Association of America “incorrectly concluded that 44 percent of the motion picture industry’s domestic losses were attributable to piracy by college students,” MPAA spokesman Seth Oster said Wednesday.

It turns out that only 15 percent of the industry’s domestic losses were caused by college students, he said.

LEK, the firm that the MPAA had hired to do the survey, discovered the error when it was computing losses for the MPAA’s 2007 study.

“We take this error very seriously and have taken strong and immediate action to both investigate the root cause of this problem as well as substantiate the accuracy of the latest report,” Oster said.

The mistake, which MPAA sources said LEK attributed to a “data entry” error, has left the association scrambling to contain any damage it might cause to the studios’ battle against piracy.

MPAA president and chairman Dan Glickman and other executives have used the 44 percent number in their arguments to get lawmakers to enact sanctions against an education community that has at times been reluctant to aid moviemakers’ anti-piracy crusade.

When told of the mistake, Glickman was said to be apoplectic and began a review of the association’s “relationship” with LEK. The MPAA also hired a third party to review LEK’s numbers for the nearly finished 2007 report.

MPAA officials pointed out that even though the number is about one-third of the one it had been using, the piracy problem on campuses remains huge, with the 15 percent figure translating to losses of nearly $250 million.

Reuters/Hollywood Reporter

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