Even before Internet became available publically; technological developments had allowed the Entertainment industry to discover and promote new formats. But it also enabled commercially-minded pirates and private citizens to pirate Entertainment on a larger scale. Piracy was a minor problem for the Entertainment industry until the arrival of the compact tape cassette in the late 1960s and the wide-spread availability of home cassette recorders in the 1970s. The advent of the CD in 1982 indicated a new era. Although this format boosted global Entertainment sales, the technology enabled high-quality copying in large quantities. Firstly, the development of encoding formats such as MP3, MOV, Mpeg, AVI etc. allowed users to easily transfer Entertainment to computers, transmit it via the Internet or decode the digitally recorded Entertainment for recording onto writable CDs. Secondly, when the switch was made from cassettes to CDs, most computers had limited storage capacity and were not always equipped with a sound card or external speakers. With the wide spread of computers however, personal computers have become much faster and more powerful and most of them nowadays came with CD-ripping software and CD-burners. Contemporary pirates were then able to create perfect, identical copies. The possibilities offered by the new technologies did not go unnoticed. Whereas the Entertainment industry always had some sort of monopoly over the distribution of entertainment to customers, they soon met with competition from entrepreneurs making the most of their chances to get a piece of the pie. Besides concerns about private citizens copying CDs onto CD-Rs, the Entertainment industry was – and still is – gravely concerned about full scale commercial Entertainment piracy.

Entertainment industry’s monopoly position being shattered, consumers are now able to shop around. It is not, however, physical piracy that has received a lot of attention recently, but digital piracy due the rise of the Internet and the plummeted costs of personal computers. This is seen as one of the biggest threats to the Entertainment industry even today. Although Internet piracy can take many forms, one variant, file sharing through peer-to-peer (P2P) networks, is said to have a devastating impact on global Entertainment sales. With the global widespread of the personal computer, the increasing universality of the Internet and broadband connections, and the emergence of digital compression technologies, this type of piracy can indeed assume vast proportions.

Effects of Piracy: There are very clear laws about what people can and cannot do with purchased Entertainment content. Generally, purchasing content means users are allowed to listen, play, read, or use that content for self-consumption. It does not give users the right to copy it, share it, trade it, let others download it or make money off of it. Like buying a movie and then charging people to come see it. Piracy negatively affects every single person working in these industries and their supply chains. There is less money to invest in new software, developing music artists, and movies. There is less work for developers, testers, sound engineers, videographers, actors, scriptwriters, musicians, assistants, set designers, security guards, stores, salespeople, website developers and every other type of person who goes into creating, packaging, advertising, distributing, supporting, promoting or reviewing these products and services. Most of the people who lost work because of piracy and stolen profits will struggle for the means to support their business. When user download illegal content or share copyrighted content with others, they do not see their victims, but digital piracy steals the income from millions of hardworking people.