Costs and Benefits of the Movie Piracy Phenomenon

Digital piracy has increased dramatically in the last years: the adoption of broadband at ever-faster speeds and the development of popular video-sharing platforms have facilitated the illegal distribution and consumption of creative contents such as films, games and recorded music. The main objectives of this study are to estimate the overall direct impact of piracy on the movie industry and to consider potential positive implications of movie piracy on the social welfare. Using both IPSOS collected data (2009) for piracy and official statistics for theatrical and DVD sectors (2009), we estimate the direct loss due to movie piracy in Italy; moreover, in line with the analytical framework of social cost benefit analyses (SCBAs), we discuss the implications of movie piracy on social welfare.