The Tera Report released in March this year, (“Building a Digital Economy: The Importance of Saving Jobs in the EU’s Creative Industries”) prepared by TERA Consultants and supervised by Patrice Geoffron, Professor of Economics at Paris-Dauphine University, as the director of the study; made a number of claims about file sharing, and resulting job loss based on a series of assumptions.

This is our third Rebuttal  Response with Rebuttal 1 and 3 already published [please see references].

The Tera report proved that by selecting an old data set (NACE 1.1 no longer in use by EU statisticians since 1 January 2008) that there is Piracy in Europe and that Piracy will cause massive job losses over the next decade.

In other words, the report didn’t include any of the growth statistics of the fastest growing media segments:

• Computer and console games
• 3D Graphics content creation
• Video on Demand
• Telecommunications infrastructure
• Mobile phone take-up and applications
• Social Network Web Tools and applications.

The Tera Report presented a series of facts that might be considered misleading by anyone that understands technology or even that the world of media is undergoing a metamorphous from the old physical to the new digital.

We have a number of concerns about the dataset chosen and used by Tera to deliver this report.

Today, we thought we would give you a peek into how Tera consultants managed to use the Eurostat system to suit their own agenda.

We were going to conduct this response to the Tera report on Job Loss in the EU as a result of File Sharing in a structured fashion. Unfortunately, tying all the pieces together so that they are suitable for a Blog article is actually much harder to do than when you have the luxury of endless page capacity in a word processor with Tables of Authorities and cross referencing tools with footnotes.

(…. AND, I’m just one guy with masses of data to present in this most unusual of formats…. html. Perhaps I should print it in a newspaper…..)

So today we will analyse just one item of data offered by Trra as a justification for claiming piracy causes jobs to be lost.

NACE DL323 has many products – however in our opinion reads  more like the asset register from the Museum displaying technology from yesteryear than the list of products that should be included in a fair comparison of job loss causational factors.
(We have highlighted what we consider the sunset industries in the following list.)

32301155	Radio receivers, portable, sound recording or reproducing apparatus
32301159	Radio receivers, portable, n.e.c.
32301175	Radio receivers, with sound recording or reproducing apparatus
32301177	Other radio receivers not combined with sound recording or reproducing apparatus but combined with a clock
32301179	Radio receivers, n.e.c.
32301270	Radio receivers motor vehicles with sound recording or reproducing apparatus
32301290	Radio receivers for motor vehicles, n.e.c.
32302020	Colour television projection equipment and videoprojectors
32302030	Colour televisions with a video recorder or player
32302045	Colour video monitors with cathode-ray tube
32302049	Flat panel video monitor, LCD or plasma, etc., without tuner (colour video monitors) (excluding with cathode-ray tube)
32302050	Colour television receivers with integral tube (excluding television projection equipment, apparatus with a video recorder or player, video monitors)
32302060	Flat panel colour TV receivers, lcd/plasma, etc. excluding television projection equipment, apparatus with video recorder/player, video monitors, television receivers with integral tube
32302075	Tuner blocks for CTV/VCR and cable TV receiver units (colour video tuners) (excluding those which isolate high-frequency television signals)
32302079	Satellite TV Receiver/Decoder (colour television receivers) (excluding with a screen, video tuners, video monitors, television projection equipment, with integral tube)
32302083	Black and white or other monochrome video monitors
32302085	Black and white or other monochrome television receivers (excluding video monitors)
32303135	Jukeboxes and the like (coin or disc-operated record-players)
32303139	Record-players and turntables (record decks) (excluding coin or disc-operated record-players)
32303150	Transcribing machines
32303175	Cassette players (including telephone answering machines without a sound recording device, personal stereos; excluding combined with radio, transcribing machines, cassette player/recorders)
32303179	CD players, mains/personal (excluding combined with radio/ television receivers, cassette players or player/recorders, coin/disc-operated record-players, turntables)
32303230	Dictating machines operated by an external source of power
32303250	Telephone answering machines with sound recording apparatus (excluding those forming an integral part of a telephone set)
32303275	Cassette recorders (cassette player/recorders) (including recording personal stereos) (excluding those combined with a radio or television receiver, dictating machines, etc.)
32303279	Other tape recorders (magnetic tape player/recorders) (excluding those combined with a radio or television receiver, dictating machines, telephone answering machines, cassette-type)
32303290	Sound recording apparatus (including digital disc audio recorders) (excluding dictating machines, telephone answering machines, magnetic tape player/recorders)
32303335	Electronic still cameras and video camcorders; digital cameras (still image video cameras and other video camera recorders) (excluding closed circuit TV cameras)
32303339	Video cassette recorders for magnetic tape of width <=1.3cm and with a tape speed <=50mm per sec. excluding those combined with television, or a built-in television camera
32303350	Other video tape recorders excluding those combined with a television – for magnetic tape of width <=1.3cm and with a tape speed <=50mm per second
32303370	Video recorders or player/recorders (including laser or digital video disc players/recorders) (excluding those combined with a television, for magnetic tape)
32304100	Microphones and their stands (excluding cordless microphones with a transmitter)
32304235	Single loudspeakers mounted in their enclosures (including frames or cabinets mainly designed for mounting loudspeakers)
32304237	Multiple loudspeakers mounted in the same enclosure (including frames or cabinets mainly designed for mounting loudspeakers)
32304239	Loudspeakers (including speaker drive units, frames or cabinets mainly designed for mounting loudspeakers) (excluding those mounted in their enclosures)
32304270	Headphones and earphones, even with microphone, and sets consisting of microphone and one or more loudspeakers (excluding airmen’s headgear with headphones, telephone sets, cordless microphones with transmitter, hearing aids)
32304355	Telephonic and measurement amplifiers (excluding high or intermediate frequency amplifiers)
32304359	Audio-frequency electric amplifiers (including hi-fi amplifiers) (excluding high or intermediate frequency amplifiers, telephonic and measurement amplifiers)
32304370	Electric sound amplifier sets (including public address systems with microphone and speaker)
32304450	Portable receivers for calling or paging
32304490	Radio-telephony or radio-telegraphy reception apparatus (excluding portable receivers for calling or paging, those combined with radio receivers)
32305130	Pick-up cartridges for discs or mechanically recorded sound films
32305150	Precious or semi-precious stones for styli
32305170	Other parts and accessories of 8519, 8520, 8521
32305180	Parts of apparatus of 8518
32305220	Telescopic and whip-type aerials for portable apparatus or for apparatus for fitting in motor vehicles
32305235	Outside aerials for radio or television reception via satellite (including rotor systems) (excluding aerial amplifiers and radio frequency oscillator units)
32305239	Outside aerials for radio or television reception (including rotor systems) (excluding for reception via satellite, aerial amplifiers and radio frequency oscillator units)
32305250	Inside aerials for radio or television reception (including built-in types) (excluding aerial amplifiers and radio frequency oscillator units)
32305270	Other aerials and parts
32305280	Parts of apparatus of 8525, 8526, 8527, 8528
32309100	Installation services of professional radio, television, sound and video equipment
32309200	Repair and maintenance services of professional radio, television, sound and video equipme

We could take up several pages in analyzing each segment, but will restrict ourselves to one by way if example.:

2303135

Jukeboxes and the like (coin or disc-operated record-players)

Juke boxes were big business … circa 1950. On page 164 From Tyler Cowen’s “In praise of commercial culture” we learn that:

The Rise of the Jukebox

The greater diversity offered by records compared to radio provided many avenues for the propagation of new music. The jukebox broughtotherwise neglected records to a large public audience.

The marketing of the electronically-amplified jukebox: in 1927 initiated the heyday of this medium. Suddenly the jukebox could beused to entertain large groups of people in dance halls, bars, and clubs.

By 1939 approximately 300.000 jukeboxes were installed, with 30 millionrecords produced for jukebox use each year. By the middle of the1940s. jukeboxes absorbed three-quarters of the records produced in America.

And an update on the state of the industry from an article in the Sarasota Herald-Tribune – dated July 8, 1982.

The Jukebox manufacturing business is also in decline. In the early 1970s, the association says four U.S. manufacturers – Wurlitzer, Seeberg, Rockola and Rowe – produced 70,000 jukeboxes a year.

Wurlitzer stopped making jukeboxes in 1974. Seeburg went bankrupt five years later and was purchased by Stern Electronics which is now marketing boxes under the Seeburg name. The
total domestic jukebox output is down to 25,000 a year, and half of those are sold abroad.

So the question remains, who purchases Jukeboxes and why?

It is our opinion from examining the websites of several Jukebox manufacturers and restorer firms that the Jukebox industry today mainly has wealthier individuals that wish to have a reminder of their youth, whether for home use and display in the entertainment room, or in a growing niche market, the themed bar or saloon.

Obviously, the EU stats show this lowered manufacturing capacity referred to in the above newspaper article.

		Value EU-15 Total Sales (€)	Base EU-15	Germany	Spain	France	Italy	The United Kingdom
2001	32303135	19799		:C	0	0	0	:C
2002	32303135	16780		:C	0	0	0	:C
2003	32303135	21000	7000	:C	0	0	2401	:C
2004	32303135	16000	4000	:C	0	0	3933	:C
2005	32303135	12000	6000	:C	0	0	897	:C
2006	32303135	20000	5000	:C	0	0	1465	:C
2007	32303135	24000	8000	:C	0	0	1085	:C
2008	32303135	No Data Available		-	-	-	-	-

N.B. Please note the dip in production and sales from 2003-2005. (Undoubtedly due to piracy.)

The yellow section on each column refers to Italy only. It is assumed that the rest are manufactured in the UK.

Possibly the authors of the Tera report are from a different generation than that which comprises the majority of the current and future customer base of what constitutes media today.

Their lack of recognition of the immediacy and digital nature of media content by today’s consumers has led them to create a report based on incorrect assumptions and consequently arrive at obviously incorrect conclusions.

Australian researcher, Sharn Donnison interviewed 70 young teachers to determine what constituted the digital generation and how best to “teach” them. ( The “Digital Generation”, Technology, and Educational Change Griffith University)

The “Digital Generation”

… is about young adults and their relationship to information and communication technologies (ICTs).

… There is some disparity on the age parameters for the “Digital Generation”.

Consequently, their estimated numbers differ. However, what is undisputed is that they are prolific (Shepherdson, 2000). Their numbers are estimated to be larger than their “Baby Boomer” parents and will thus constitute the next “great” generation in the history of Western civilisation (Strauss & Howe, 1997).

This generation is often defined by their relationship to technology. While they have numerous descriptors such as the “Echo Boomers”, “NeXters”, “Bittersweet Generation”, “Millennials”,
and “Generation Y2K” they are most commonly referred to as the “Digital Generation”, “e-generation”, “Generation Dotcom”, “Cyber Generation”, and the “Net Generation”(Websters Online Dictionary, 2004). Much has been written about this generation often with a view to determining marketing strategies and future strategic goal setting. Some authors (Little, 2000; Mackay, 1997) have written about them simply with a view to understanding their cultural characteristics and motivations.

Inevitably, in any description, authors will note their intimate relationship to ICTs. For instance Gaylor (2002) argues that they are the first generation who has been weaned on computers and who have not only embraced technology but actually celebrate it.

The “Digital Generation’s” propensity towards ICTs is not disputed. They have a particular affinity for the Internet and use it for a multitude of purposes. This generation find it indispensable for
entertainment, shopping on line, homework and studies, banking, paying bills, communicating with peers, and developing community.

Furthermore, it is employed by members of this generation at a very basic level to craft their personalities. Mcgregor (2001) and Shepherson (2000) note how the “Digital Generation” use technologies to create unique and pastiched identities that are cut and pasted from cultural and
historical sources.

Undoubtedly, the “Digital Generation’s”character has been partially informed by their proclivity towards ICTs. Gaylor (2002) says of them that them that they are technosavvy, image driven, develop graphicy skills before literacy skills, do not think in a linear fashion but rather think non-linear, loopy, in hyperlink, hopscotch fashion. Time, for them, is measured in microseconds, and
survival is of the fastest not the fittest. They have a strong sense of immediacy, a desire for instant gratification, and a low boredom threshold.
They are success oriented and believe change can occur overnight in an “anything can happen and probably will world”. They learn by interaction and doing rather than sitting and listening and prefer to experience and feel rather than think and analyse.

Conclusion.

We find the study is heavily biased by the drop in sales from sunset manufacturing industries and by the omission of Video Games, Video on Demand and Mobile software delivery and manufacturing indices has ensured that the results are heavily skewed in a negative fashion.

We are disappointed that an eminent academic and respected member of ther community could get the facts, quite so wrong.

References:

Cowen, Tyler (2000). In praise of commercial culture. Harvard University Press. pp. 164,166. ISBN 0674001885.

Arar Y (AAP 1981) The Sound of the Jukebox may soon be a distant memory.

http://news.google.com/newspapers?id=r080AAAAIBAJ&sjid=L2gEAAAAIBAJ&pg=6793%2C3437935

Donnison S  “The Digital Generation, Technology, and Educational Change” – Griffith University

http://www98.griffith.edu.au/dspace/bitstream/10072/2085/1/25836_1.pdf

Eurostat Database

‘Data’ / ‘Industry, trade and services’ / ‘Horizontal view’ / ‘Structural Business Statistics’

http://epp.eurostat.ec.europa.eu/portal/page/portal/eurostat/home

Tera Rebuttal Response 1 – File Sharing – Convenience, Availability (March 30, 2010)

Tera Rebuttal Response 3 – The Accuracy of Data (March 31, 2010)