I'm not sure if someone else has done this as a blog yet or not, but I was just thinking about how much of an impact illegal downloading must be having on the entertainment industry so I decided to do a little research. A recent study has found that movie piracy and internet downloading costs major studios over $6.1 Billion per year. The entire economy loses about $20.5 billion per year including losses for theaters, renters and retailers, advertisers, lawyers, casts and crews, and other service workers.
I am not here to condemn all internet downloads. It is ridiculous to ask teenagers, and many adults alike, to pay twenty dollars for the remastered Thriller album, when they can easily access it at an online site for free. Why would a broke college student want to pay $8 to see Juno in the theater when they can find it online and watch it without even having to download harmful software?
iTunes had the right idea, allowing consumers to purchase just a few songs off of a CD at a reasonable price in a guilt-free manner. However, if a Milli Vanilli album is only $5 at a retail store and a Justin Timberlake CD is $15, why should each song be worth the same 99 cents? (This point doesn't have much to do with the grand idea, but its still interesting)
Anyway, piracy only causes the industry to lose more money, which causes the prices to go up, leading to a vicious cycle of loss for industries. According to the law of demand, however, if the demand for movie tickets decreases, the price and quantity of movie tickets will also decrease. Does this mean there will be less movie showings available, but they will cost less?
Does anyone have any ideas as to how this cycle can be diminished or any predicted effects of continued internet piracy?