While the global entertainment industry may appear to be thriving, there are serious threats to its long-term prosperity. Many countries have been accused of failing to effectively protect intellectual property rights. Some businesses may be forced to reduce global marketing and sales efforts if this trend continues. An article in the globalEDGE Business Review estimated that worldwide counterfeiting has increased from $6 billion in the 1980s to over $600 billion today. Even the most prosperous of businesses would struggle to cope with such overwhelming losses.
By reducing margins for entertainment businesses, piracy is effectively stifling innovation and creativity. Movie producers, musicians, and video game developers are less likely to take on risky projects if they are not going to reap the full benefits of major breakthroughs. The movie industry has resorted to a number of sequels and remakes of old films that are seen as a reliable source of steady profits rather than developing new ideas that may or may not impress audiences.
The Entertainment Software Association has charted illegal file sharing in the video game industry. They estimate that 144 million connections have been made from unauthorized sources, with over 50% of these coming from only five countries. Italy, China, Spain, Brazil, and France accounted for 78 million detected episodes of video game piracy in 2010. While the gaming industry in the United States is experiencing growth, UK Interactive Entertainment estimates that the industry has lost over $2 billion annually in the United Kingdom due to fraud.
With intellectual property legislation varying significantly from country to country, it is increasingly difficult for exporters to guarantee the security of their products overseas. Many culprits appear to believe that there is nothing wrong with pirating free copies of software and other products. If consumers are not shown that there are direct repercussions for their actions, it is likely that it will become easier and easier to get illegal copies of all types of entertainment.
Regulating the counterfeit trade is not an easy task for any nation to tackle. While Australia has strict piracy legislation including the Trade Marks Act of 2000 and the Intellectual Property Laws Amendment Act of 1968, more than one quarter of software in the country was never paid for. Customs officials are constantly struggling to intercept thousands of counterfeit shipments each year. Studies have shown that Australian consumers do not see piracy as a major issue, admitting that they do not even consider it to be a crime. Educating world populations about these issues may be the only way to protect the property of businesses everywhere.