Most profitable form of piracy

Since the advent of the internet, sharing music and movie files on peer to peer (P2) networks has made piracy easier, but much of this activity is illegal. While it is difficult to measure precisely the copying and distribution of material for which the creators or copyright-holding authority has not given permission, a 2011 report by Frontier Economics – "Estimating the global economic and social impacts of counterfeiting and piracy" – set out to examine the economic and social impacts of counterfeiting and piracy. This was commissioned by the International Chamber of Commerce's Business Action to Stop Counterfeiting and Piracy (BASCAP) and was based on industry reports and academic studies. It estimated that the volume of pirated digital products being distributed via the internet in 2008 was US$ 30–75 billion. Frontier Economics also projected a total of US$ 80–240 billion for 2015.

A 2007 report by Policy Innovation, "The True Cost of Sound Recording Piracy to the U.S. Economy", states that an estimated US$12.5 billion is lost to the US economy every year. It also states that this costs 70,000 jobs and US$2 billion in lost wages to the US workforce. The report states:

Specifically, the analysis demonstrates that:

a. As a consequence of global and U.S.-based piracy of sound recordings, the U.S. economy loses $12.5 billion in total output annually. Output includes revenue and related measures of economic performance.

b. As a result of sound recording piracy, the U.S. economy loses 71,060 jobs. Of this amount, 26,860 jobs would have been added in the sound recording industry or in downstream retail industries, while 44,200 jobs would have been added in other U.S. industries.

c. Because of sound recording piracy, U.S. workers lose $2.7 billion in earnings annually. Of this total, $1.1 billion would have been earned by workers in the sound recording industry or in downstream retail industries while $1.6 billion would have been earned by workers in other U.S. industries.

d. As a consequence of piracy, U.S. federal, state and local governments lose a minimum of $422 million in tax revenues annually. Of this amount, $291 million represents lost personal income taxes while $131 million is lost corporate income and production taxes.