Pirated VCDs showed up large numbers in 1995. They robbed the Hong Kong film industry of 40 percent of its business, and forcing video shops and theaters to close down. Pirating is costs the world film industry at about $3 billion a year in lost sales. The biggest losers are Chinese filmmakers and distributors . The six major Hollywood studios lose around $250 million a year.

Competition is very fierce among vendors which is why prices are so low. In 2005, DVDs of recent films could be purchased for as little 60 cents a piece. The quality of DVDs has improved over the years. Sometimes customers prefer the pirated copies to the real thing because they have not been censored by the government and available much more quickly because the distributors don’t have deal with government red tape. The selection at illegal shop is often much better the at the legal ones.

Pirated films are often version that were shown outside China and thus are uncensored. Many of the foreign films sold by pirates were never even shown at neighborhood cinemas and those that were has scenes deleted it.

New released films have to make big money on the opening days because soon after that the film is widely available in pirated version.