Piracy is the number one issue that reduces the income of content creators, struggling musicians, writers and the entire content industry as a whole. The industry is affected by the buyers option to purchase cheaper products who benefit the pirate more than the entire team responsible for the work. While this may reduce the earning potential of the content industry, it does not really adversely affect the economy (Ravi, et al., 2018).
The purchasers of pirated products do so because of the lower pricing. It is possible that they cannot afford the genuine product, hence the reason to go for this option. Although this can be marked as income lost, the particular creator still benefits from a rise in their popularity (Drahos, 2017). The effects are felt in greater penetration in public media and more earnings from affiliate marketing. The customer base then grows as the purchasers of genuine products also purchase marketing merchandise that directly benefits the content industry. Basically, the purchaser of pirated goods does not harm the industry because they would not be able to purchase genuine products anyway (Fink et al., 2016).
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Pirated goods save the buyer some money as they are often cheaper though of the same quality. The saved money is spent on other things that equally benefit the economy. For example, a person buys a greater number of pirated goods than the original (Mroz, 2016). This boosts the penetration of the industry because the copies reach a greater number of people. Another way that pirating benefits the economy is through TV broadcasting. The production house gets a lot of popularity because the production is highly publicised. This reduces the overall sales that would have been achieved through legal sales. Piracy does not harm the economy because the revenue generated is reinvested into other sectors that equally contribute to the economy. Piracy therefore forms a shadow economy.
References
Drahos, P., & Braithwaite, J. (2017). Information feudalism: Who owns the knowledge economy . Routledge.
Fink, C., Maskus, K. E., & Qian, Y. (2016). The economic effects of counterfeiting and piracy: a review and implications for developing countries . The World Bank.
Mróz, B. (2016). Online piracy: an emergent segment of the shadow economy. Empirical insight from Poland. Journal of Financial Crime , 23 (3), 637-654.
Ravi, A., Lekshmi, R. S., & Rajamani, K. (2018). A STUDY ON MOVIE PIRACY.
