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Why Hollywood Wants SOPA

The Wikipedia website has shut down its English language service for 24 hours in protest over the US anti-piracy laws.
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The Wikipedia website has shut down its English language service for 24 hours in protest over the US anti-piracy laws.

There’s been a ton of attention todayto the massive to the anti-piracy Stop Online Piracy Act - or "SOPA bill", with Wikipedia going blackbecause it threatens to “fatally damage the free and open Internet.”

But few have explained why EVERY SINGLE media giant supports the bill and why they’re desperate to fight piracy.

A few people, like

, have come out in defense of SOPA, he tweeted yesterday: “Nonsense argument about danger to Internet.”

Here’s a primer on why SOPA got as far as it did.

“Creative America” wants SOPA, PIPA (Protect IP Act) and other anti-piracy legislation:

Creative America is an organization that represents what it calls “the entertainment community”—which translates to pretty much every content or entertainment company in the US. The MPAA is one of the main groups that supports SOPA—spending an estimated $100 million or so lobbying. But that’s not all—the movie companies that comprise the MPAA are joined by the Screen Actors Guild and the American Federation of TV and Radio Artists. All the music labels are on board, as are all the music publishers’ associations, and a long list of publishing houses also supports the bill, plus the Teamsters. And the backers are spending big—the TV, movie and music industries spent nearly $100 million in 2011 on lobbying last year.

Here’s why Media needs SOPA:

Entertainment is one of the nation’s biggest exports and according to ‘Creative America,’ content theft costs US workers $5.5 billion ANNUALLY in lost earnings. The MPAA estimates that pirated movies, music, software and video games are responsible for the US losing $16 billion in earnings, $58 billion in economic output and more than 300,000 jobs.

Media giants can’t prevent the pirating of content, but they’d like to enlist the government and Internet companies to prevent consumers from accessing illegal copies of movies and books so they’ll keep buying DVDs and paying their cable bills. The idea of SOPA and PIPA is to draw on the power of search engines like Google to block the inclusion of rogue sites from web results, with government-mandated blocking of certain sites. The MPAA has gone to great lengths to argue that legitimate Internet companies inadvertently “profit from illegal activity.” In a recent blog the MPAA lays out how Google runs ads for illegal services and profits from ads next to links to illegal sites.

Here’s why Silicon Valley & Tech Giants say this anti-piracy strategy will backfire

SOPA’s critics—including Google, LinkedIn , Twitter, Yahoo and Zynga -- say censorship regulations won’t shut down pirate sites, which will simply change their addresses. They argue that Internet companies would have to expend an impossible amount of money and manpower—Google says “Law-abiding U.S. internet companies would have to monitor everything users link to or upload or face the risk of time-consuming litigation.” Today Facebook CEO Mark Zuckerberg weighed in, saying that while piracy is seriously problematic, these “overreaching bills” would cause “collateral damage to the Internet.”

Can Tech and Media Compromise?

Nobody is denying that piracy is a problem, and everyone, including Google to Facebook have pushed for piracy-fighting alternatives. Secretary of State Clinton said: “There is no contradiction between intellectual property rights protection and enforcement and ensuring freedom of expression on the Internet.” Tech companies including Google are advocating for an alternate bill, the ‘OPEN Act,’ which also aims to target piracy without mandating that Internet companies. (Click here to read the “Online Protection & Enforcement of Digital Trade Act.”) But the MPAA calls the ‘OPEN Act’ “ineffective and costly.”

At this point we’re looking at a standoff between Silicon Valley and Hollywood—and a Congress which is turning its attention to campaigns. We may eventually see a compromise, but the delay means that in the meantime hundreds of millions of dollars – if not billions—will continue to be lost to piracy.

Questions? Comments? MediaMoney@cnbc.com

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  • Working from Los Angeles, Boorstin is CNBC's media and entertainment reporter and editor of CNBC.com's Media Money section.