Personal copying occurs when individuals make, or allow copies to be made, of copyrighted materials for their own use and enjoyment; they may or many not own a licensed copy of the work. For the purpose of this ethical analysis, personal copying is distinguished from casual piracy in which an individual undertakes the redistribution of copyrighted material and commercial piracy in which copies of the original work are sold for profit by the copier.

The reasons for this distinction are the implied intent of the perpetrator and the potential magnitude of the damages due to copying. While commercial and casual pirates engage in copying as industry, personal copiers seek to enjoy a work—just as if they had rented or purchased it—only without compensating the owner of the copyrighted work. Watching a borrowed movie, an acceptable activity, similarly deprives the copyright owner of compensation, however material and social constraints limit the scope of this "social piracy". Personal copying is more problematic since there is no need to return the movie and the copy can be re-borrowed by strangers an unlimited number of times, making the potential for lost revenue much greater than with borrowing.

It's difficult to gauge the impact of casual copying on the music and movie industry. People will consume a greater quantity of movies and music at a near zero price then they will at full retail prices so it's inaccurate to estimate the dollar amount of lost sales as equal to the dollar value of material copied. Each copy does not amount to a lost sale, though some surely do and this can add up to a large amount of money.