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COMPREHENSIVE HOME VIDEO COPYING STUDY FINDS COPY PROTECTION A KEY FACTOR IN REDUCING OVERALL CONSUMER COPYING LEVELS

 MOUNTAIN VIEW, Calif., Aug. 17 /PRNewswire/ -- Home video copying levels have decreased by almost every measure since 1990, and videocassette copy protection has played a key role in frustrating potential copiers according to a comprehensive study released today by Macrovision Corp.
 The study, which was conducted by the New York research firm Schulman, Ronca, and Bucuvalas Inc., incorporated interviews with a representative sample of 1,000 VCR owners. Because the study used the same measurement and sampling procedures as a similar survey conducted in 1990, this study represents the industry's first opportunity to accurately track prerecorded videocassette copying trends.
 Although the number of households with two or more VCRs has risen by more than 8 million since 1990:
 -- The number of copies made per year by admitted copiers has decreased 17 percent, from 30 million in 1990 to 25 million in 1993.
 -- The proportion of VCR households having illegal copies has decreased from 41 percent to 31 percent.
 -- The average number of illegal copies per VCR household has decreased more than 30 percent from 5.6 to 3.7.
 Macrovision copy protection appears to have played a key role in reducing overall copying levels, according to the study. The penetration of copy protected cassettes in the market has increased from 38 percent at the time of the 1990 study to over 50 percent today. Over the same time interval the proportion of consumers who failed in their last attempt to copy increased from 32 percent to 47 percent. The total number of copy failures reported by consumers has increased dramatically.
 Increase
 1990 1993 1993 vs. 1990
 Number of Copy
 Failures Per Year 14 million 22 million 57 percent
 Ninety-one percent of all copying problems described by respondents in the survey were categorized as likely caused by Macrovision copy protection.
 "While Macrovision copy protection may not be the only factor behind this decrease in home copying rates, the survey data indicate this technology has had an impact on potential copiers," said Bill Krepick, senior vice president, sales and marketing for Macrovision Corp. "This study strongly suggests that if more cassettes are copy protected, overall copying levels will decrease proportionately. This represents an enormous opportunity for the industry to increase its revenues and to bring consumers back to video stores."
 However, copying remains an important issue for the industry, as the number of copy attempts increased from 45 million in 1990 to 48 million in 1993, and VCR households still have nearly one illegal copy of a prerecorded videocassette for every four legal ones.
 The study measured the dollar impact of home copying and copy protection in three ways. It used data collected from successful copiers to estimate annual sell-thru and rental revenue displaced by home copying. It developed a measure for the annual impact of copy protection, by evaluating copy failure rates from unsuccessful copiers and measuring subsequent rental and sell-thru transactions. And it also measured total industry revenues "at risk" if there was no copy protection:
 Home Copying and Copy Protection Impact
 Annual revenues displaced $250 million
 (base: successful copiers)
 Annual revenues saved $100 million
 (base: unsuccessful copiers)
 Annual revenue "at risk" $1.7 billion
 "About 13 percent of industry revenues could be lost if there was no copy protection," said Krepick. "If copy protection usage decreases, fewer copiers will encounter copy-protected cassettes, and fewer will experience copying problems. While the impact might not be seen in the sales of any specific title, overall industry revenues would suffer, consumer piracy rates would rival those of the audiocassette industry, and the perceived value of videocassettes would be lower than it is today."
 Macrovision Corp. develops technologies for the protection of electronically transmitted and prerecorded video programs from unauthorized viewing or copying. The company offers products and services for the home video, pay-per-view, cable, satellite, and corporate communications markets. Macrovision has field offices in London and Tokyo, with headquarters in Mountain View.
 -0- 8/17/93
 /CONTACT: Bill Krepick of Macrovision, 415-691-2900/


CO: Macrovision Corp. ST: California IN: ENT SU:

PK-TM -- SJ005 -- 3662 08/17/93 15:23 EDT
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Publication:PR Newswire
Date:Aug 17, 1993
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