How does theatrical piracy affect movie production budgets?

When piracy eats into theatrical revenue, studios may respond by reducing budgets for future films, cutting back on creative risks, or avoiding certain markets altogether. The loss of revenue impacts marketing spend, special effects budgets, and even hiring decisions for cast and crew. Independent filmmakers, who often rely on smaller box office returns to secure funding for future projects, may face the harshest consequences. Over time, this can lead to fewer diverse film offerings, as studios focus only on projects they believe can survive despite piracy threats.