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The Progressive Economics Forum

The Download Decade and the Declining Reputation of the Conference Board

The Globe’s Download Decade started out well but by the end turned into a propaganda arm for big corporate rights holders. Surprise, surprise. This issue is all about who gets what in the digital age, and for the most part it is the already super-rich pressing the case to maintain and increase their revenue streams in the future.

To do that they engage in a wide range of misleading and distorted statistics. In a recent, high-profile case, the Conference Board of Canada was hired to make their case for them, to provide a veneer of independent analysis. But it all backfired on them when Michael Geist blogged that the Conference Board had plagiarized reporting done by the industry associations behind the study. The Conference Board is holding steady in spite of a number of critical articles in the mainstream media about this “piracy” (the whole debacle is summarized nicely in this article).

That the Conference Board is a hired gun is not new, though they still seem to have some prestige capital left in the tank. It is worth remembering the hatchet job done by the Conference Board for the BC government to provide big numbers in support of the BC-Alberta Trade, Investment and Labour Mobility Agreement (critiqued by Erin Weir and myself; see here and here, and for the full CCPA/CLC paper here). I have also been critical of the Conference Board for its excessively rosy views on the state of the economy that led to the Fall 2007 Harper tax cuts (the missing story behind the latest deficit numbers, by the way), and its prolonged delusion on this deep into 2008.

The Download Decade, in its final installments, is hardly better than the Conference Board. There is a lot of loaded information that is heavily biased in favour of vested interests. For example, let’s unpack the following barrage of statistics from the most recent article in the series:

Now, some in the cultural industries worry that a lack of political will coupled with a trend of successive minority governments will make it difficult for Canada to pass contentious legislation. And, they say, Canada’s failure to ratify piracy-prevention legislation is hurting consumers by keeping legitimate digital dollars out of the country.

“It’s even worse than having a bad reputation,” said John Kennedy, chairman of the International Federation of the Phonographic Industry (IFPI), a trade group responsible for more than 15,000 record labels around the world. “It’s become a place where as far as I can see, people don’t want to invest their digital dollars, Euros or pounds because they just don’t think it’s the right environment in which to do it.”

What is this supposed to mean? Since when have investments not been made in Canada of this?. No examples are cited. The reality is that Canada runs a massive trade deficit in cultural services. Changing the law as the IFPI would like it will surely benefit foreign copyright holders, and will make our trade deficit worse, but it is not clear that it would create any useful investment in Canada that would provide jobs that were not going to be there anyway. And yet the journalist on this article just let that sail by completely unquestioned. More:

In Canada, where the cultural industries account for an $84.6-billion (Canadian), or 7.4 per cent of GDP according to the Conference Board of Canada, piracy is beginning to affect the bottom line, the entertainment industries say.

About 32 per cent of the computer software in Canada is pirated, contributing to losses of $1.2-billion (U.S.) in 2008 alone, according to a report from the Business Software Alliance (BSA). If Canada were to crack down and get its piracy rate to around 23 per cent – close to the U.S. rate of 20 per cent – it could result in 5,200 new jobs and contribute $2.7-billion to the country’s economy by 2011, according to a 2008 report from market research firm IDC.

And this number is based on what? Not much, as Geist points out. So then, what has super-strong copyright has done for the US — 10% less downloading! If only we really could get those jobs because according to the numbers each of those jobs pulls down more than half a million per year.

A recent study found a “small tail” for downloading (summary from Wired here, full report here), meaning what gets traded is what is already popular. If you want Madonna or Metallica you can find it easily, and this means less money for super-rich rock stars, or movie stars for that matter. But if you want smaller artists they are hard to find because, well, they are smaller artists. Others the next tier up can be found but are most likely in a position of wanting to be found. Downloading allows those medium sized acts to expand their fan base and that means more money not less, in touring revenues, t-shirts, and CDs.

At the end of the day, we have to ask what problem all this fuss over copyright is trying to solve. Declining monopoly profits for mega-corporations is not a good reason.

Enjoy and share:

Comments

Comment from Darwin O’Connor
Time: May 28, 2009, 11:36 am

The Conference Board has admitted the plagiarism.

Comment from Adam Bishop
Time: May 31, 2009, 8:04 am

There’s a huge problem any time the movie, music, or game industries claim that X number of jobs or dollars would be produced if copyright laws were strengthened – they seem to be based on the completely illogical notion that any time someone downloads a CD/movie/game, the money that would have been spent on that product disappears.

But that’s not what happens. If I decide that I’m going to download an album instead of paying $15 for it, what happens to that $15? Does it vanish? No, I’m going to spend it instead on going to the movies, or getting lunch with a friend, or going to see a concert at the local club. The exact same amount of money is going into the economy whether I download or purchase that CD. Downloading may cost one particular industry some jobs (though I’m not convinced that’s the case either), but it costs the economy on the whole absolutely nothing. The money will just go somewhere else.

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