According to materials provided by the MPAA, in 2007, theater goers spent over $26 billion worldwide. This was an approximately 5 percent jump in sales from the previous year. In the US, $9.63 billion were spent, for a 5.4% gain. The average ticket sale went up 5% that year. This leads me to believe that file sharing is at the very least not affecting the movie industry as they claim.
According to another item published on the MPAA website, is the 2007 Piracy Data Summary. This claims that as much as $7 billion are lost every year to internet pirates alone. It also states that the main demographic of a pirate is between 16 and 24 years old, male, and lives in an urban area. The way they calculated the cost of pirating was simply by converting the amount pirated to what it was legitimately sold for. I would argue that everyone who downloaded a movie wouldn't have paid to see it legitimately anyway. I am in that demographic. Many movies I just don't care to see and I have precious little money to spend. I would thus argue that the losses due to piracy in this demographic are minimal at best. Besides that, those losses are problably justified by us not wasting our money on those crappy formula movies, because we got suckered in by some flashy advertisement.
More than that, I would say there is a net gain from piracy and the "betrayal" of copyright. Word of mouth is hugely ignored by any study I have read. Many people in my generation, at least that I know, are not impressed by the ads coming from the movie industry. It is only when someone has actualy watched the movie and given it a good review personally that people go to see the movie. This is also hard to study. Had the entertainment industry spent $9 billion more on ads and no pirating had occured, I guarantee there would actually be less of a return on investment than currently is, ie no investment, only ill substantiated market losses, for great reward.
I have a solution...Let my people go!
If the movie industry would open up and release movies online for free, they could easily generate vast amounts of data on who is watching what. There will always be pirate groups, but if there is no challenge involved and it is easy to get a hold of the movie without them, then the amount of pirates will decrease tremendously. This is not just the "if you legalize it there will be fewer criminals" argument, but the fact that the movie industry could potentially benefit greatly from the data generated by them providing such files themselves. The ability to stop paying as many lawyers to fight petty battles alone would be worth it for them.
I'm not saying there wouldn't also be a cost of this for the MPAA. Servers cost money. But if they were willing to do this, they could have a much higher profit margin in this world where people are afraid to part with their hard earned cash. Hulu seems to be doing pretty good in the world by providing free Television shows with limited ads. The movie industry could do a similar scheme.
In the end, the opening up of the movie industry would be a great step towards the development of an open, idea based Internet where the sole determinor of profit is quality, not cheap tricks. But that is a blog for a later date.
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