Last month, the International Trade Administration (ITA)—an agency in the US Department of Commerce that measures and promotes the export of nonagricultural services and goods—released its 2017 Top Markets Report, Media and Entertainment Sector Snapshot. The report provides updates on the steady growth of the US media and entertainment (M&E) sector, which includes the core copyright industries: books, newspapers, periodicals, motion pictures, TV production, recorded music, radio and television broadcasting, video games, and software. In addition to emphasizing the solid growth and immense value added by copyright-intensive industries to the US economy, the update highlights the enduring barriers hindering the sector’s export potential, not the least of which is the continuing harmful effects of widespread piracy and copyright infringement.
The 2017 M&E report is an update to the more detailed 2016 report prepared by the ITA as a market assessment tool to help “unlock export and investment opportunities for U.S. businesses by combining indepth quantitative and qualitative analysis with ITA’s industry relationships.” Beginning with an overview of the global M&E market, the 2017 update references the 2016-2020 Entertainment & Media Outlook by PricewaterhouseCoopers, which measured global market revenues at $1.9 trillion in 2016 and predicts an expansion to nearly $2 trillion in 2017. One of the more notable movements in individual country market value came from China, which the report notes jumped into second place with a $190 billion share of the global total, followed by Japan ($157 billion), Germany ($97 billion) and the United Kingdom ($96 billion).
The United States remains firmly ahead of all other countries in market value, accounting for $712 billion—or one-third of the entire global market. Driving the US market is the unprecedented progress of the core copyright industries—or those industries “whose primary purpose is to create, produce, distribute, or exhibit copyright materials”—which grew at an aggregated annual rate of 4.8% between 2012 and 2015. The copyright industries’ growth was an astounding 127% more than the overall US economy, which grew at a rate of 2.1% over that time.
Additionally, the report describes copyright industries as significant contributors to US exports, outperforming other sectors such as chemicals, aerospace, agricultural products, and pharmaceuticals. The robust growth and output of the copyright sector reflects industries that are not only experiencing increased expansion in the digital market, but also a movement towards the convergence of media and entertainment companies that are now offering a multitude of services spanning many M&E sectors.
But despite this seemingly favorable outlook, the report warns that piracy and illegal file-sharing continue to harm the M&E sectors. Providing overviews of the top five export and licensing markets for the US digital and creative sectors—which include Brazil, China, India, Canada, and the UK—the report highlights the persistent piracy and lack of strong enforcement of copyright laws compromising international trade.
Particularly troublesome are the Indian and Brazilian markets, where growing classes of tech-savvy consumers are accustomed to high piracy rates and weak copyright enforcement. Detailing these barriers to entry, the report notes that “[c]opyright industries doing business in Brazil face significant Internet piracy, as do products in the entertainment sector, such as CDs; DVDs; and other media carrying pirated music, movies, TV programming and video games.” Facilitating this widespread infringement in Brazil and India are circumvention devices that allow access not only to movies and television shows, but also to video game consoles.
Unfortunately, infringement is also inhibiting trade with the United States’ North American neighbors. The report cautions that while Canada has a well-developed professional M&E sector that should make for efficient dealing with the US, “online infringement is high and enforcement weaker than expected.” On the bright side, recent Supreme and Federal Court rulings in Canada have shown a willingness to combat rampant infringement and enforce copyright law.
The update explains that “[d]igital trade has brought attention to widespread piracy and the importance of having solid copyright laws and enforcement actions.” It’s an important reminder that though creative industries are powering vibrant global ecosystems, sound IP laws and the willingness to enforce them are necessary to overcome the damaging effect infringement has on international markets.