Internet rights advocacy groups have savaged a report that lists the dire economic consequences of Internet piracy.
The Age had based a report on the then mysterious anti-piracy paper earlier this month. The article claimed piracy has cost the content industry in Australia, including the film and video games sector, $900 million last year with the figure to hit $5.2 billion by 2016 when factoring in potential impacts of the National Broadband Network (NBN).
The full paper, titled The Impact of Internet Piracy on the Australian Economy was commissioned by the Australian Content Industry Group (ACIG) and compiled by Sphere Analysis.
It was released by the Business Software Alliance (BSA), a member of ACIG, today.
Over 40,000 jobs could be lost in the content sector by 2016, according to the report.
The Pirate Party has questioned the validity of the report. Upon analysis of the paper, the group claimed most of the frightening figures and estimations attributed to content piracy in Australia are based on European statistics.
“It’s not really science; it’s just extrapolation on estimation,” Pirate Party representative, Brendan Molloy, said.
Prior to the report being released, Pirate Party had attempted to contact Sphere Analysis but was unsuccessful. The group also noted the company had ties with the real estate industry and raised concerns over the legitimacy of the analyst group.
“It seems to be a shell company for pushing the interest of lobby groups when they need it so this is all a bit suspicious,” Molloy said.
While Sphere Analysis is indeed the trading name for Sphere Property Incorporation, a company with a 20 year history in financial and economic modelling, it is now delving into areas of public policy, according to Emilio Ferrer who wrote the report.
“There is nothing mysterious about this whole thing,” he said. “We now have particular sets of skills and we are applying them to different areas.”
He addressed the questions around the European figures used in the anti-piracy report.
“We are very fortunate Tera Consultants (a Paris-based analyst firm) did a comprehensive study of five European countries comparable to Australia in terms of economy, how the internet has grown and structure of their content industry,” Ferrer said. “This presents an opportunity to apply the findings to the Australian context using Australian data.
“I don’t accept the criticism at all.”
Ferrer has maintained the Sphere Analysis report is perfectly legitimate, but Electronic Frontiers Australia (EFA) doubted it would “pass muster in a first-year economics class".
“The methodology is flawed since it treats a download as money simply lost to the economy,” EFA chair, Colin Jacobs, said. “We cant’ see how that is a defensible conclusion, yet [Sphere Analysis] uses it to make precise estimates of thousands of lost jobs and drops in government revenue.”
Ferrer was undeterred by the report’s detractors.
“I can understand why people that may not want anything done about Internet piracy will be upset when a report attempts to list the economic impact,” he said. “But the reality is the impact is very significant.”
“Inevitably the government will have to do something about this in the future because local jobs are at stake here.”
The content industry has been locking horns with ISPs over Internet copyright infringement issues.
The Australian Federation Against Copyright Theft (AFACT), representing a number of high-profile movie studios, took iiNet to the Federal Court over alleged film piracy activities by the ISP’s subscribers.
This culminated to a two-year legal battle which has led the Internet Industry Association (IIA) to develop an .
Yesterday, iiNet released a paper of its own which suggests forming an independent regulation body to be a mediator between content holders, ISPs and consumers.
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