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The effects of piracy on the Movie Industry

Film piracy is the illegal copying and distribution of movies in print, videos, DVDs or electronic files.

New developments in digital technology make server-based or peer-to-peer (P2P) file sharing on the Internet convenient and relatively fast.

A negative consequence of this new technology,however, is online theft of copyrighted material.

Consequences of Piracy
Who is affected by piracy?

If affects the creators, including authors and holders of related copyrights as illegal sales affect their main source of income that is derived from royalties from legitimate sales. They can be bankrupt because they make big inversion on copyrights and productions, but they don’t gain toomuch money because people stop buying their products.

Workers in all cultural industries because piracy replaces the original products and production jobs. This can lower economy like for example in Hollywood because people don’t have money or jobs, the movies industries don’t gain too much money, so they consider if its worth it making movies and make DVDs production because less people goes tocinemas or buy the DVDs.

Also the State is affected because as the piracy-related activities always take place, at least partially outside the established system and therefore no taxes are charged reinvested in cultural development.

Impact on creativity

Piracy could lead to an exodus of talented creators, which deprives countries of the wealth of local creativity. For example, thegrowing piracy in most African countries has led many artists to leave their country to create and present their work in Europe, where they are better paid, thanks to the current system of copyright.

Some of their solutions to the piracy problem is to lower the product (DVD’s, digitals) prices so that people considerate if paying a little more amount of money and having a better quality or payingless but having not a good quality.

Impact on the diversity of cultural expressions

Those who engage in piracy are primarily interested in a small part of music albums or movies popular internationally and generally show little or no interest in offering works by local artist.
Other thing is that there is no restriction of ages because any person under 18 can download the movie or buy it (theillegal copy), so in fact there’s no importance of the

rating of movies in cinemas if people are going to watch it at home anyways.

Impact on cultural industries and development

Piracy destroys the foundations of local cultural industries and impacts negatively on their relationships with foreign partners. In addition, piracy undermines the legal industry; it can’t compete fairly withthe low prices resulting from the unlawful activity. Thus, not only hinders the development of cultural industries, but also economic development in general, as companies can’t grow and expand in a sustainable manner.

According to a previously released study commissioned by the Motion Picture Association of America, the movie industry had previously focused on piracy's impact on lost sales oflegal DVDs and online films, estimated at about $6 billion per year.

Impact on employment

In social terms, the damage suffered by businesses because of the harmful effect of piracy is reflected ultimately in the jobs of the creative industries.

Pirated products lead to astagnation of the legitimate industry, which in turn
provides fewer job because the companies are not selling too muchDVD’s or cinema tickets, so they don’t have too much production in factories.
Movie piracy causes a total lost output for U.S. industries of $20.5 billion per year, thwarts the creation of about 140,000 jobs and accounts for more than $800 million in lost tax revenue.

Conceptually, piracy has several effects on supply and demand in the motion picture theatrical market. On the supply side,...