It is an absolutely absurd amount of money and jobs that are being lost due to piracy. It affects businesses big and small alike. Piracy has a ripple effect; money is not just lost simply because people do not pay for a product and thus that money is absent. There is a much more devastating chain of events in place. When a movie is available online for free, the value of it decreases because the supply is, without obstruction, infinite, causing the demand to greatly diminish. Because of the lowered value that ensues from this opportunity for piracy, less movies are able to be made. This is because movies take a lot of money to be put into production. How it works is companies make investments in films before it is actually made, which are commonly referred to as "pre-sales ". These pre-sales are then offered to a bank and used as collateral to finance the film's production. If these initial pre-sales are not established, it is too risky for banks to loan the immense amount of money required to produce the film, and thus, it will not be made. This is a large reason independent film makers struggle to create new films. However, this effect also impacts big companies, because the more popular or well-known a movie is, the more likely it is to be so widely accessible for free, and thus there is a much greater chance for there to be lessened value of the movie. If fewer movies are being made, there is less need for jobs, which means unemployment. In the end, the movie industry ultimately loses about 3-4 billion dollars annually. In 2005 alone, $20.5 billion was lost in the industry, as well as approximately 141,030 jobs. The movie industry alone is to an extent crippled by piracy; now imagine the impact of the effect on the economy from music and software piracy as well. Respectively, piracy from the two industries cost America $12.5 billion and over $100 billion annually!.
Microsoft's DRM software attempts to ensure that the content on a CD is used as it is intended, setting restrictions such as limiting the number of times a downloaded song can be played, as well as possibly preventing the capability of the song to be transferred to an MP3 player or copied to another CD.