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EMBARGOED FOR RELEASE AT 12:00 p.m.
Thursday, May 7, 1998

NEW ECONOMIC STUDY SHOWS

U.S. COPYRIGHT INDUSTRIES PASS $278 BILLION MARK AND

ACCOUNT FOR OVER 3.5 MILLION U.S. JOBS

IIPA report, prepared by Economists Inc., says creative industries

grew nearly three times as fast as the rest of the U.S. economy from 1977-1996,

and have achieved first place in foreign sales and exports at over $60 billion in 1996

 

Washington — At a press conference held today on Capitol Hill, the International Intellectual Property Alliance (IIPA) released a new economic study which demonstrates once again that copyright-based industries are among the largest and fastest growing sectors of the U.S. economy.

Senator Orrin Hatch (R-UT), Chairman of the Senate Judiciary Committee, and Senator Patrick J. Leahy (D-VT), Ranking Minority Member of the Senate Judiciary Committee, introduced the new IIPA study, Copyright Industries in the U.S. Economy: The 1998 Report. This report was prepared by Stephen E. Siwek and Gale Mosteller of Economists Incorporated, and details the contribution of U.S. creative industries -- including the publishing, audiovisual, music and recording, business software and interactive entertainment software sectors -- to U.S. Gross Domestic Product, employment, and foreign trade.

Also speaking at the press conference were IIPA representatives, including: Eric H. Smith, President, International Intellectual Property Alliance; Hilary Rosen, President and CEO, Recording Industry Association of America; Patricia Schroeder, President and CEO, Association of American Publishers; Rebecca Gould, Vice President of Public Policy, Business Software Alliance; Mike Frischkorn, President, AFMA; Douglas Lowenstein, President, Interactive Digital Software Association; and Jack Valenti, President and CEO, Motion Picture Association.

Key findings of the Copyright Industries in the U.S. Economy: The 1998 Report include:

n in 1996, the most recent year for which figures are available, the core copyright industries (those which create copyrighted products) accounted for 3.65% of U.S. Gross Domestic Product (GDP) or $278.4 BILLION in value added;

n between 1977 and 1996, the core copyright industries grew nearly three times as fast as the annual rate of the economy as whole -- 4.6% vs. 1.6%;

n in 1996, 3.5 million Americans worked in the core copyright industries -- about 2.8% of the entire U.S. work force;

n in 1996, the U.S. core copyright industries achieved foreign sales and exports of $60.18 BILLION, surpassing, for the first time, every other export sector, including automotive, agriculture and aircraft.

1996 figures for the total copyright industries were even more impressive: $433.9 BILLION in value-added, or 5.68% of U.S. GDP, and employing over 6.5 million people, or 5.2% of the U.S. work force. The "total" copyright industries encompass the "core" industries as well as portions of many other industries which either create, distribute, or depend upon copyrighted products.

"This report shows that the economic impact of the U.S. creative industries has passed a number of significant milestones," said Eric Smith, IIPA President. "This quarter-trillion dollar economic dynamo has created more than 3.5 million jobs and over $60 billion annually in overseas sales and exports. Industries like business and interactive entertainment software, movies, TV and video, music and sound recording, and book and journal publishing, are critical national assets and the linchpin of U.S. global competitiveness as we move more deeply into the Information Age. The report is critical reading material for Congress as it examines ratification of the two new WIPO treaties, which will help ensure the continued success of these industries into the twenty-first century."

The two new treaties, adopted by the World Intellectual Property Organization (WIPO) in 1996, upgrade global standards of copyright protection, particularly for digital network environments such as the Internet. Legislation to make the modest changes needed to bring U.S. law into compliance with the standards of the treaties was unanimously approved on April 30 by the Senate Judiciary Committee, and action by the full Senate is expected soon. Companion legislation was approved by the House Judiciary Committee April 1.

Former Congresswoman Pat Schroeder, President and CEO of the Association of American Publishers, said: "We need to remember that our amazing copyright industries not only educate, delight, and entertain the entire world, they also put bread on the tables of more than three and a half million American households. Almost three percent of the workforce depends on our creative industries for its livelihood, and this percentage promises to grow exponentially in the new Century. It’s just good common sense for the U.S. to do everything necessary to safeguard these important American jobs."

"This reports reflects more than the significant impact of America’s copyright-based industries on our GDP, it also illustrates the value most Americans place on creativity and artistic contribution," said Hilary Rosen, President and CEO of the Recording Industry Association of America. "In America, copyright is an old tradition. It means that artists, songwriters, filmakers, computer software designers — anyone with a good idea or who contributes to the creative process -- should get credit for their work and be rewarded. Let this report emphasize the importance of protecting the millions of U.S. artists, creators and workers who are supported by our industries by discouraging a marketplace of stolen goods and piracy in any form."

"The economic study shows that the core copyright industries have surpassed the more traditional export industries in their importance to the U.S. economy" said Mike Frischkorn, President of AFMA. "This trend will undoubtably continue as technological progress and a growing world economy create an even greater demand for entertainment content. It is therefore more important than ever to ensure that our products are protected from those who would purloin them without regard to copyright conventions and the rule of law."

Doug Lowenstein, President of the International Digital Software Association, said, "The entertainment software and video game industry has experienced phenomenal growth since 1996, both in the U.S. and export markets. This growth will continue if governments have the political will to develop and implement effective intellectual property strategies, for both the traditional and electronic marketplace. The IDSA will work closely with the U.S. and foreign governments to remove existing market barriers and eradicate piracy so that the double digit growth in video and PC games can be sustained."

Jack Valenti, Chairman and CEO of the Motion Picture Association, said, "There are two facts the U.S. public needs to understand. First, intellectual property is the most valuable trade export of the United States, and the most wanted American product all over the world. Second, international piracy of American creative works has reached a level of some $18-20 Billion annually. It’s estimated that the WIPO Treaties can reduce this unacceptable theft of American creative works by some 15% to 20%, and more. There is no more critical priority for the Congress than the protection of creative works that produce billions of dollars in surplus balanced of trade for this country. This is why the time has come to move the WIPO legislation to the Senate floor, and then passage by the House."

"For this impressive expansion to continue, strong copyright protection for creative works is essential. The U.S. can continue to be a world leader in protecting copyrights by ensuring government legalization of software use. Legalizing software management practices in government agencies will send a powerful message to computer users worldwide. Computer Software is an asset in any organization or agency, and should be managed accordingly," said Rebecca M. J. Gould, Vice President, Public Policy of the Business Software Alliance.

"Once again, the IIPA study demonstrates the vital role the American copyright industries play in maintaining a vibrant domestic economy," said Edward P. Murphy, President and CEO of the National Music Publishers’ Association, Inc. "NMPA’s music publisher members are proud to be a part of copyright’s contribution to growth in foreign revenues, GDP and jobs. Global music publishing revenues for 1995 showed an increase of almost 6.5% over 1994, and we look forward to a continuation of this trend."

Copyright Industries in the U.S. Economy: The 1998 Report updates five prior economic reports issued in 1990, 1992, 1993, 1995 and 1996. An Executive Summary of the report is attached. For the full report, contact IIPA.

IIPA is a coalition of associations representing U.S. copyright-based industries in bilateral and multilateral efforts to open up foreign markets closed by piracy and other market access barriers. IIPA’s member associations are: the Association of American Publishers (AAP), AFMA (formerly the American Film Marketing Association), the Business Software Alliance (BSA), the Interactive Digital Software Association (IDSA), the Motion Picture Association of America (MPAA), the National Music Publishers’ Association (NMPA) and the Recording Industry Association of America (RIAA). These associations represent over 1,350 U.S. companies producing and distributing works protected by copyright laws throughout the world -- all types of computer software including business and entertainment software (such as videogame CDs and cartridges, personal computer CDs and multimedia products); motion pictures, television programs and home videocassettes; music, records, CDs and audiocassettes; and textbooks, tradebooks, reference and professional publications and journals (in both electronic and print media).

Press releases and additional information on IIPA are available by fax using IIPA’s fax-on-demand service - call (303) 575-6110 - and through IIPA’s Web site at http://www.iipa.com.

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