Just in case you were wondering, there are many people who do not see intellectual property piracy as a victimless crime.  The latest study cited yesterday in the Washington Post identifies costs to the U.S. economy of $58 billion per year and a loss of over 350,000 jobs in the entertainment industry and its supplying industries.  Moreover, a companion interview with NBC Universal CEO Jeff Zucker on CNBC reported $2.6 billion a year in lost tax revenue, adding to the pain.

Not just tunes, videos and software
So, real penalties to a lot of real people are occurring up and down the value chain in the entertainment industry, with much greater impacts even beyond that industry.  And, it’s a global problem.  For example, as reported in the latest study, of the 13 billion U.S.-recorded songs estimated to have been illegally downloaded in 2005, 9 billion were downloaded overseas.  Further, as pointed out in Volume 3 of the Digital Trust report series (“Intellectual Property Protection: Minding your Mind Power” ), the problems and penalties do not stop with the entertainment industry.  Intellectual property (IP) of all kinds in nearly every enterprise of the S&P 500 accounts for about 80% of the total value of the enterprise!  Protecting IP while enhancing the value of those intangible assets is a prime objective of digital trust.

Calling for better digital trust technology
The latest data also shows that law enforcement and consumer awareness are important in solving the problem.  But, at best, they just help us “hold our own.” Even when content producers make some content free (e.g., see the new Hulu.com advertising-supported site for Fox and NBC programming), the problem gets extended elsewhere in the value chain.  Without better digital trust technology to help deliver fair value for fair use (both inside and outside the entertainment industry), we’ll continue to wage a series of skirmishes to eliminate some illegal outlets and production facilities even while others get started.  We’ll also unnecessarily restrain value capture for IP because we just can’t figure out how to protect it outside the legitimate (licensed) distribution.  This ends up being a case of IP protection “whack-a-mole” as new techniques for violation crop up just as fast as old ones are shut down.

Digital trust technology for IP protection is gradually improving, but there’s still big room for improvement.  Here’s a case where value generation through security is staring us in the face; all we need are a few better ideas!