[ballenf]

There's one other aspect to the damage calculation. It's admittedly even more subjective than the others in use, but in my opinion even more important.

It's the subjective devaluation in the market of the content. If goods with zero marginal costs tend towards being priced at zero content creators need to raise the marginal cost of their goods to be above zero. With digital goods, the only ways to do that is to attach risk to the act of copying or distributing and increasing the difficulty of finding the content.

Getting back to unauthorized copying of digital media, the cost could be calculated as the net reduction in perceived value of the good as a result of its easy availability.

In hard terms, rampant copying might mean that pricing sweet spot for DVDs or legal streaming is depressed and that reduction then becomes the "cost" of the piracy to creators.

[thaumasiotes]

This is true, but none of that reduction is attributable to a suable party, even one the size of megaupload.

[ballenf]

For sure. My point was just that it's the calculation that Hollywood studios should be thinking about internally when deciding how much spend on combatting piracy. At some point the expense becomes greater than the benefit. And I doubt they're so naive as to use the 1:1 calculation of each download being exactly equal to a lost ticket sale, except when it comes to press releases.