Canada: online piracy a problem hurting artists, creators and the economy

The Office of the United States Trade Representative (USTR) today released a report that spotlighted Internet and physical markets that exemplify key challenges in the global struggle against piracy and counterfeiting. Not surprisingly, Canada-based IsoHunt was identified as a major piracy site which “recently ranked among the top 300 websites in global traffic and among the top 600 in U.S. traffic.”

The report follows on the heels of last week’s submission by the International Intellectual Property Alliance (IIPA) to the USTR recommending that Canada be maintained on the Special 301 Priority Watch List in 2011. The IIPA submission extensively analyzed the piracy and counterfeiting problems in Canada. The rational for its recommendation was summarized as follows:

While we are encouraged by a few examples of improved enforcement responsiveness against physical piracy, overall the piracy picture in Canada is at least as bleak as it was a year ago, and it is cementing its reputation as a haven where technologically sophisticated international piracy organizations can operate with virtual impunity. To underscore U.S. insistence that Canada finally take concrete action to address the serious piracy problem it has allowed to develop just across our border, and that it bring its outmoded laws up to contemporary international standards, IIPA recommends that Canada be maintained on the Priority Watch List in 2011.

Recent Canadian research highlights the adverse impacts and economic losses to the Canadian economy resulting from illicit online file sharing. A study released two weeks ago by Ipsos / Oxford Economics estimated that more than $1.8 billion and 12,600 full-time equivalent jobs were lost across the entire Canadian economy in 2009-10 as a result of movie piracy alone.

A study released earlier today by the Canadian Intellectual Property Council, an arm of the Canadian Chamber of Commerce, concluded that peer-to-peer file sharing of music has a strong negative effect on legitimate music purchases in Canada. The study, entitled The True Price of Peer to Peer File-Sharing, analyzed data which had been previously collected for an Industry Canada study. The analysis found that P2P downloads have strong negative effects on legitimate music purchases. The study found that 75% of P2P downloaders responded that if P2P files were not available they would have purchased music through CDs and pay sites (49%), through paid sites only (9%) or through CDs only (17%). Only 25% of people said they would not have bought the music they downloaded for free if it were not available on P2P networks for free. According to the study, “P2P network availability is reducing the music demand of 75% of music downloaders and that “for some categories of respondents the percentages were as high as 85%.”

The results indicated that removing P2P file-sharing, “for example through stronger copyright laws, would increase music purchasing, music industry sales, artist revenues and, by implication, increase industry employment , economic growth and government tax revenues.” Conversely, according to the finding the “results show that allowing P2P file-sharing through weak copyright law reduces music purchases, music industry sales, artist revenues, industry employment, GDP and government tax revenues.”

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