A Television Addict’s Validation

Kenneth Parcell

Television and film fanatics around the United States: rejoice. Yesterday, the Department of Commerce’s (DOC) Bureau of Economic Analysis (BEA) stated it was changing the method it uses to calculate Gross Domestic Product (GDP), in order to better reflect the economic contributions that come from the creation of copyrighted works, like films and television. In other words, GDP now encompasses the economic activity of the culture-aholic’s favorite sector (spoiler alert: the creative one!).

Prior to this change, the economic contributions of the film and television industry were treated as current expenses — or costs of business. GDP only captured the film and television industry downstream, based on the revenue generated by Hollywood’s tangible products. It did not include the impact on the economy based on investment in film and television. The change reflects that in economic terms, films and television works are an intangible asset. Long after they’re first developed, these creations continue to retain their value and deliver residual benefits; films and TV shows are licensed and sold to different markets for years after their original release so that nerds all over the world can enjoy Game of Thrones or The Avengers.

More importantly, however, this change reflects the realities of a U.S. economy dependent on people investing in ideas and developing new intellectual property in addition to tangible goods. According to Secretary of Commerce Penny Pritzker, “copyright intensive industries contributed 5.1 million jobs and grew by 46.3 percent between 1990 and 2011, outpacing other IP-intensive industries as well as non-IP intensive ones. This vital contribution is a tribute to the Founders’ vision in providing for the protection of creative works.” In addition, BEA finds that the investment in films, television shows, literature and music produced by the entertainment industry was approximately $74 billion in 2012, and $75.3 billion in Q2 of 2013.

But, unfortunately, the BEA also finds that now, more than ever, this industry is danger of piracy. Yesterday also marked the release of an interagency task force report entitled, Copyright Policy, Creativity, and Innovation in the Digital Economy. Launched in 2010, this study urges all stakeholders in the creative economy, including consumers, to contribute to reducing piracy.

The study notes that the prevalence of digital networks such as Netflix, iTunes, Hulu or Google Play has beneficially increased consumer access to programming. But at the same time, the study also recognizes that some of these technological developments have given rise to new methods of mass infringement.

The report states, “Addressing [piracy] is vital to maintaining meaningful incentives for producing creative works, ensuring a level playing field for legitimate services, and promoting the broadest offerings of online content.  All stakeholders, from creators to intermediaries to consumers, have an interest in ensuring a healthy online ecosystem. The fundamental question is how best to achieve that end.”

Well, my fellow nerds, the best place to start is probably by legally streaming or downloading all of your favorites. The U.S. International Trade Commission estimated that American business lost $48 billion to copyright infringements in China in 2011 alone, while according to the Washington Post, the pay-tv industry estimates losses of $1 billion in Asia. And let’s be real for a second here — we all know what websites are or are not illegal. If you’re seeing NSFW ads on the side of your favorite streaming website, you’re probably doing it wrong.

The digital revolution is upon us, and if we want to continue to both ensure our nation’s economic competitiveness as well as increase consumer access to content, we need to create a symbiotic relationship between digital technology, the Internet, and creative industries. Only by protecting the rights of creators and copyright owners will creative industries continue to make their substantial contributions to the nation’s economy, thereby ensuring digital innovation continues to thrive.

But even more than that, we need to safeguard the cultural value carried by copyrighted work. As Secretary Pritzker states, “America’s writers, musicians, filmmakers, photographers, sculptors and other creators make up the lifeblood of our culture, build new stores of knowledge, and shape how we see ourselves – and how the world sees us as well. Their influence extends beyond our borders; our copyrighted works weave a compelling narrative of the opportunity and possibility of America, and continue to be at the forefront of the global creative marketplace.” Or, more simply, in the words of the great Kenneth the Page from NBC’s 30 Rock, “…more then jazz, or musical theater, or morbid obesity, television is the true American art form.”

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About the author

Michelle Wein is a research analyst at ITIF, specializing in the connections between international trade, innovation, intellectual property and economic productivity.