The true cost of China piracy

Filed in archive Statistics on June 28, 2006

The Internet is big in China so it really shouldn't surprise anyone that the Web is being harnessed to that other great Chinese growth industry: movie piracy.

A study released Monday quantifies that financial bruising. Initiated by the Motion Picture Association of America (MPAA) the study has come up with a negative box office tally of $2.67 billion in 2005.

The study, undertaken by LEK Consulting for the MPAA, reportedly said that illegally produced DVDs accounted for $1.63 billion lost--but verboten downloads are catching up, costing $1.04 billion.

But Forbes Magazine notes that the entertainment industry can take heart, sort of, in the breakdown: The study says that $1.5 billion of that lost revenue was stolen from China's home-grown film industry, and the Yank film houses lost some $567 million.

Will it move the Middle Kingdom to change? Most likely. Will these changes happen in the next fiscal quarter? Likely not. But we may be soon reading more stories about how Bejing is working with Hollywood to crack down on piracy.