The cost of piracy is really hard to calculate correctly. There are several factors.
1) People who would have bought the product but now pirate instead. This is a loss to the industry but it is a benefit to consumers. However, the overall effect would usually be negative.
2) People who wouldn't have bought the product because the price is too high but pirate it. This doesn't hurt the producers because these people would never have bought the product and also represents a benefit to consumers.
3) Piracy may actually increase sales because it is like a kind of advertising. This would be a benefit to the industry.
So force#1 causes losses to the industry. Force #2 has no effect on the producers. And force #3 is a benefit to the industry. So to really accurately calculate the cost of piracy you need to calculate forces #1, #2 and #3. If #3 outweights #1 then piracy would actually increase profits to the industry.
The estimates of the cost of piracy by the industry are deliberately inflated because they assume that everyone with a pirate copy of Photoshop, for instance, would have actually shelled out the $500+ that it costs. So if there are 1,000 pirate copies of Photoshop, they assume this is a loss of $500,000. But this is rubbish because how many of those 1,000 would actually have paid $500 for Photoshop? Most likely very few, if any, because the people who use illegal copies of software tend to be people with limited incomes and with the time to go out there and look for the cracked versions of the programs. Thus, the industry's $500,000 estimate would be a gross exaggeration of the real cost.
As far as I know, no one has done a proper study of the real cost of piracy considering the effects I have written here and it would be very difficult to actually measure these effects. However, we do know that Hollywood opposed the VHS because it would facilitate piracy. And yet, after the VHS, Hollywood's profits increased. If history is a guide, it appears that with every new technology, the profits of media companies have increased, not decreased.
Here is a revealing quote from Bill Gates on the issue:
Gates shed some light on his own hard-nosed business philosophy. "Although about 3 million computers get sold every year in China, but people don't pay for the software," he said. "Someday they will, though. As long as they are going to steal it, we want them to steal ours. They'll get sort of addicted, and then we'll somehow figure out how to collect sometime in the next decade."