Dallas, TX (August 23, 2007)–According to a report released by the Institute for Policy Innovation (IPI), rampant global piracy of recorded music has cost the U.S. $12.5 billion in economic output and 71,060 jobs annually. The report, “The True Cost of Sound Recording Piracy to the U.S. Economy,” is described as “the first of its kind to credibly estimate the impact of sound recording piracy not just on the recording industry, but also on the U.S. economy as a whole.”
The Institute for Policy Innovation (IPI) was founded in 1987 by Congressman Dick Armey (R-TX) to research, develop and promote innovative and non-partisan solutions to today’s public policy problems.
According to the report, because of global and U.S.-based piracy of sound recordings, every year the U.S. economy loses $12.5 billion; U.S. workers lose 71, 060 jobs; and U.S. workers lose $2.7 billion in earnings. That includes $1.1 billion in earnings from workers in the sound recording industry or “downstream” retail industries, and $1.6 billion in earnings by workers in other U.S. industries. Additionally, says the report, the U.S. government loses at least $422 million in tax revenues, including $291 million in personal income tax and $131 million in lost corporate income and production taxes.
“Piracy harms not only the owners of intellectual property but also U.S. consumers and taxpayers,” says Stephen E. Siwek, author of the report and principal with Economists, Inc. “Moreover, the impact of music piracy appears to be intensifying.”
The report states that policy makers must realize the threat of global piracy and recognize that intellectual property products, such as sound recordings, are the most important growth drivers in the U.S. economy, responsible for nearly 40 percent of economic growth and nearly 60 percent of growth in U.S. exports.
Institute for Policy Innovation