A recent KOFIC report has concluded that illegal downloading on the internet results in annual losses to theatrical, DVD and video markets of 281.6 billion won (~$270 million). The report estimates losses of 217.6 billion won to the theatrical sector, 38.5 billion won to the DVD sector, and 25.5 billion won to the video sector.
Although theatrical venues are estimated to suffer the most from illegal downloads, the fact that the entire DVD market amounted to only 100 billion won in 2004 and 80 billion won in 2005 means that this sector suffers the most in terms of percentage of lost revenue.
The figures were calculated after carrying out a poll of 1000 people in September and October of this year. The survey estimated that 19.8% of people who watch films in theaters or on DVD, video or TV take part in illegal downloading. Among this group of downloaders, 65.3% are aware that downloading is an illegal activity, and 79.1% download films before they are released on DVD. The average offender downloads 3.4 movies per month.
Another noticeable development is that close to half of the sites that provide illegal downloading charge for their services, with the average paid download costing 724 won (70 cents). This amounts to 65.6 billion won (~$63 million) per year which is paid not to film copyright owners, but to operators of illegal sites.
As such, the report noted the need to establish legal alternatives to online downloading, which will provide additional revenue to film companies and help to partially undermine the illegal market.