Unintended Consequences of Online Piracy

Last year, Digital TV Research measured the impact of piracy on streaming services across 138 countries. It projected an increase in lost subscription and ad revenue from $32 to $52 billion a year between 2016 and 2022. Adding to that surprising figure is the fact that it is for the streaming services only and does not account for losses sustained by traditional cable and satellite companies.

It is easy to look at piracy as a nearly victimless crime because we tend to think of the only victims as being Netflix, Amazon, Disney, etc. Unfortunately, this is a terribly short-sighted outlook. The average major studio movie costs around 100 million dollars to produce, plus up to 200 million in worldwide advertising. If we look at average production costs paired with top of the line advertising, studios can easily spend up to 300 million on a film. If these companies were able to recoup their 52 billion in losses, they could produce 17 averagely priced films. You may not think that 17 projects are a lot to lose, but when you think of the number of jobs created by a movie, we are looking at a loss of up to 10,000 jobs every year.

Irdeto, a digital security company, conducted a survey that showed only 69% of people believe streaming or downloading pirated content is illegal. Furthermore, only 19% of respondents said that the financial damage caused by piracy would stop them from watching pirated content altogether.

If that isn’t enough to sway you when it comes to piracy, I have a more personal reason you may want to pay for Netflix or drive to the nearest Redbox. As popular as remakes, reboots and adaptations are in Hollywood, it is even more common to find people complaining about them online. It happened this past week with the announcement of remakes of ALF and Living Single. When companies are losing billions of dollars, while tickets sales continue to decline, and more and more people are cutting the cord every day, they are forced to lean towards safer projects that they feel are guaranteed money makers. So, if you are one to bemoan the lack of creativity in Hollywood while pirating movies and tv shows, you may want to consider your role in the problem.

The effects of piracy are even more profound when applied to new, unique or independently made films. Studios can be incredibly fickle, and if these films don’t make every dollar possible, the chances of them green-lighting future original projects decreases. Which only serves to compound the problem of a lack of creativity.

Ending or even decreasing piracy isn’t a cure-all, but it will put a little more onus on the studios. Putting your money behind the things you really like is the only way to guarantee you’ll get more of that thing.



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