MPAA Budget Slashed In Half, Are They Dying?

Despite the ever increasing threat of online piracy, Hollywood is allocating less money to their flagship anti-piracy outfit. Tax records reveal that in a period of three years the major movie studios cut their payments to the MPAA in half. As a direct result the budget of the movie industry group reached a new low of $49.6 million, causing wage and legal fee payouts to plummet.

mpaaLast week the RIAA’s latest tax filing revealed that the music group has lost nearly half of its revenue because the music labels reduced their membership dues.

This downward trend is not limited to the music business – the MPAA isn’t doing any better financially either.

The most recent IRS tax filing of the non-profit movie group covers 2010 and is slightly dated, but it nevertheless shows some noteworthy trends. Like the RIAA, the MPAA’s revenue has been dropping year after year.

In just three years the revenue generated by the anti-piracy outfit reduced from $92.8 million to $49.6 million. The decreased budget is a direct result of the major Hollywood studios cutting back on their MPAA funding. In the same period membership dues dropped from $84.7 million to $41.5 million, more than a 50% decline.

Unlike at the RIAA where there were 40% staff cutbacks, the MPAA managed to keep the number of employees on par. However, they are now working for a lower average salary. In three years the money spent on wages sunk from $29 million to $18.2 million.

Not even former CEO Dan Glickman could avoid a drop in renumeration – his salary fell from $1.65 million to $1.11 million. However, that still made Glickman the best paid MPAA employee, closely followed by President Robert Pisano who resigned in 2011 after earning $1.09 million during his final year in the job.

Wages are not the only area where massive cuts were made in the MPAA’s spending. In a three year period money paid to law firms plunged from $13 million to $5.6 million.
But it’s not all dire news.

The MPAA’s lobbying budget remained stable at $4.6 million and despite their dire financial position the group still had enough money available to give some away, such as a $25,000 grant to the Democratic Attorney Generals Association. Yes, that’s the organization of Vice President Joe Biden’s oldest son Beau.

The same Joe Biden who reportedly took down Megaupload.

That brings us to a final remark. Despite a dwindling budget the MPAA has booked some significant successes in the last year. The group was one of the main facilitators of the Megaupload investigation. The MPAA also played an important role in several movie streaming domain seizures and arrests, as well was the conviction of Anton Vickerman in the UK and the NinjaVideo admins in the US.

While the MPAA certainly isn’t dead yet, one has to wonder how long they can continue if the Hollywood studios keep cutting back on their membership dues. If the downward spiral continues the movie industry group may have more difficulty “convincing” politicians and law enforcers.

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