Many Hollywood executives fear that the ability to illegally download movies for free from websites eliminate funds that would otherwise have come from people renting or purchasing a copy of the movie. The validity of this fear is difficult to prove, especially with even more renting opportunities via Blockbuster's online rental program and rival company NetFlix. While many independent rental companies have gone out of business, it is difficult to pinpoint whether this is the result of illegal downloading or simply the evolution of the home movie rental business to include online rental companies.
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Fewer People Going to the Movies
Hollywood executives also argue that consumers will no longer see new releases of films at movie theatres and rather download versions of the newest releases off of the Internet. Whether or not this is true is difficult to determine. Ticket sales at movie theatres have tapered off over the recent years, but it started before downloading movies for free off the Internet became more common. Increased movie ticket prices have also negatively affected the number of ticket sales, but many cinema owners say they've been forced to raise prices because of illegal movie downloading. On the other hand, some movies do incredibly well in the theatres when they are first released, selling out showings, even if the films have already been leaked to the Internet for downloading.
Less Royalties Paid to Movie Studios
Many in Hollywood claim that downloading a movie for free takes money out of the pockets of those who starred in, funded and created the movie. With fewer movies being rented, fewer theatre tickets being sold and fewer home movies purchased, some fear they will have to take a significant pay cut that will negatively affect their quality of life or the ability of the movie studios to create more movies. This same fear was raised in the 1980s with the introduction of the VCR player and the VHS cassette tape. The allegations that it would damage the movie industry were forgotten in this case because the industry continues to thrive, even with more home entertainment options available.