Report: Copyright Industries Contribute Trillion-Plus to Economy

According to the most recent study by the International Intellectual Property Alliance (IIPA), which covers 2003 to 2007, core copyright industries, which include TV and film production, accounted for 5.6 million jobs and $889 billion in contributions to the gross domestic product, which translates to about 23% of the overall growth of the economy in 2006-2007.

Those and other results were unveiled Monday by the IIPA, which includes the Motion Picture Association of America, the Independent Film & TV Alliance (IFTA), as well as groups representing music, software and other publishers.

The core copyright industries contributed $889 billion, or 6.44% of GDP, in 2006-2007, the most recent year for which numbers were available. That figure for the total copyright industries was $1.52 trillion, or 11% of GDP.

The annual growth rates of the core and overall copyright industries was more than double the real growth rates of the economy as a whole, according to the report, even though their share of GDP is lower.

The purpose of the study is to demonstrate how large and important a sector of the economy copyright is, and why it needs to be protected from illegal copying and distribution. Foreign sales and exports of the core industries are larger than any other industry sector, according to the report. As of 2007, foreign sales were about $126 billion.

The study does not break out film and TV except for a foreign sales number of $23 billion for film, TV and video. In fact, it does not break out separate industries in general, which allows all the industries, which include text books, trade books, business software and much more, to take ownership of the overall figures for jobs, percentage of GDP, and growth.

The core IP industries are those directly involved in the production, creation and distribution (not including retail) of IP-protected content, including television and film production. The total copyright industry category includes a laundry list of businesses, from jewelry to toys, some portion of which implicate copyright.

Salaries in the core industries average $73,554, or about 30% higher than the national average salary.

The takeaway from the report, according to IFTA President Jean Prewitt is that "the IP industries are one of the strongest contributors to the U.S. economy, if not the strongest," with good, skilled jobs, and growth as a percentage of GDP that is outstripping other industries: "We need to seriously continue looking at trade conditions, at eliminating market barriers and insuring copyright and IT protection that allows industries to continue to flourish."

Independents account for about 70% of the film and TV production of the country, and about 65% of the employment of the sector, Prewitt says. So, the specific takeaway for IFTA is that indies "are the work horses of the film and television industry."

The study ends in 2007, so Prewitt concedes that "no one is quite clear about exactly what the financial bottoming-will do for these industries or any other. But at this stage, these statistics are what they are, and I don't think anyone has seen a huge disparity."

So, it is arguably a case of a falling tide lowering all boats? "Exactly," says Prewitt. "But we assume this boat is still fairly water-tight."

In addition to Prewitt, MPAA chief Dan Glickman and other industry leaders, Commerce Secretary Gary Locke was scheduled to be on hand for the study's unveiling.

"I am disappointed that the Department of Commerce would join hands on a report that is so obviously biased" said Gig Sohn, president of Public Knowledge, which advocates for fair use rights for copyrighted material. 

"This detailed report reinforces what we know to be true-the U.S. creative industries are key to the growth and recovery of our ailing economy,"said Glickman Monday in unveiling the study findings. "The total copyright industries collectively employed nearly 12 million people in 2007 at wages that well-exceeded the national average. That's why it is so important that our government leaders continue to protect and promote intellectual property at home and around the world."Computer companies responded to the study by suggesting the same methodology could yield different results.

"There is no question that copyright-related industries - just like technology and Internet industries - contribute to the economy," said Computer & Communications Industry Association President Ed Black. "However, we reject the implicit suggestion that more and more copyright protection is necessarily better. Research has indicated that approximately one sixth of the U.S. economy and one in eight jobs benefit from fair use and other limitations and exceptions to copyright. We don't need more copyright -- we need smarter copyright."

He said that using the same World Intellectual Property Organization methodology that IIPA used, CCIA's own report showed that industries that depend on fair use and other exceptions to copyright were even bigger contributors to the economy.

The MPAA released a movie and TV impact study earlier this year that found that production represented more than $40 billion in wages and another $38 billion in payments to vendors. 

Sohn pointed out that the Obama administration has put a premium on data-driven policymaking, but said it should "look askance" at data "gathered up for industry for its own policy purposes. Totally locking arms on a study financed by industry is not data-driven policymaking," she said. "I expect the administration to look to more independent sources for this kind of data."

Rick Cotton, executive VP and general counsel of NBC U, calls the numbers "quite extraordinary" in showing both the growth of the broad copyright industries and their importance to U.S. public policy in all sectors of the economy.

That includes the broadband rollout that is occupying so much of government policymakers' attention of late. He called it critical that deployment go "hand in glove" with the "continued vitality of the creative industries" that supply broadband content.

Cotton said he was familiar with claims about the impact of fair use and copyright exemptions on the economy, but urged a "very careful look at that claim."

John Eggerton

Contributing editor John Eggerton has been an editor and/or writer on media regulation, legislation and policy for over four decades, including covering the FCC, FTC, Congress, the major media trade associations, and the federal courts. In addition to Multichannel News and Broadcasting + Cable, his work has appeared in Radio World, TV Technology, TV Fax, This Week in Consumer Electronics, Variety and the Encyclopedia Britannica.