How Much is Digital Video Piracy Costing the U.S. Economy?

digital video piracy

A new study estimates that the U.S. economy loses $29.2 billion every year as a result of global digital piracy. Impacts of Digital Video Piracy on the U.S. Economy was jointly conducted by the U.S. Chamber of Commerce, the Global Innovation Policy Center, and NERA Economic Consulting, and takes an in-depth look at how the proliferation of piracy devices and apps are not only delivering unauthorized programming over the internet and to TVs, but also outpacing the use of BitTorrent downloads in the piracy world. More than 80% of piracy is now attributable to streaming.

Global online piracy costs the U.S. economy $29.2 billion in lost revenue each year, according to the study.

For background, it's important to note that the rise of legal video streaming has truly revolutionized the way people view content. In 2018, the number of video streaming subscribers globally overtook the number of paid-TV subscribers as they accessed over 500 licensed online video portals. Video expansion and increased consumer demand has led to the production of more original content than ever before, and many ways for viewers to watch TV or movies whether on the go, at home, or at a time of their convenience. But the caveat to this growth is that simultaneously, digital piracy has broken into the market, threatening to stifle the innovation and progress that legal streaming services and devices have provided to American viewers. 

The report states that "as legal streaming access has proliferated, so has digital piracy, as criminal actors adapt to take advantage of new technologies and consumer behaviors." Additionally, David Hirschmann, President and CEO of the U.S. Chamber of Commerce's Global Innovation Policy Center, wrote, "The study shows that all of the benefits that streaming brings to our economy have been artificially capped by digital piracy." 

The study estimates that digital video piracy results in up to 560,000 industry job losses each year.

The report details the negative effects that streaming piracy will have for the creative industry, which extends from the TV and movie business to content production firms, technology companies, and any other enterprise that contributes to video distribution. The American movie and TV production and distribution industry supports over 2.6 million jobs, and in 2017 alone, it generated $229 billion in revenue. But the study estimates that digital video piracy results in the loss of anywhere from 230,000 to 560,000 jobs annually. 

As Hirshmann concluded in the report's foreword, "While there is no single solution, global collaboration among industries and governments to educate consumers of the dangers of piracy, coupled with the expansion of legal options in cases of infringement, is necessary to curb these negative effects. All parties must continue to work creatively and constructively to enable dreamers, innovators, and creators around the world to continue to tell their unique stories and advance our culture and economy."