BitTorrent Piracy Doesn’t Affect US Box Office Returns, Study Finds

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From TorrentFreak.  More in the article.

With their unconditional support for SOPA, PIPA and ACTA, Hollywood is pressing hard for new legislation to curb piracy. The studios want ‘rogue’ websites to be censored and are calling on Google and Internet providers to take responsibility.

However, a new study reveals that movie industry itself has the key to decreasing piracy, without passing any news laws.

In a paper titled ‘Reel Piracy: The Effect of Online Film Piracy on International Box Office Sales’ researchers from the University of Minnesota and Wellesley College examine the link between BitTorrent piracy and box office returns. As hypothesized, they find that international movie piracy losses are directly linked to the delay between US and foreign premieres.

In other words, the longer it takes before a movie is released internationally, the more box office revenues are impacted through piracy.

“We find that longer release windows are associated with decreased box office returns, even after controlling for film and country fixed effects. This relationship is much stronger in contexts where piracy is more prevalent: after BitTorrent’s adoption and in heavily pirated genres,” they write.

“Our findings indicate that, as a lower bound, international box office returns in our sample were at least 7% lower than they would have been in the absence of pre-release piracy.”

Aside from their conclusion that a lack of availability is fueling piracy, the researchers report a perhaps even more interesting result. Contrary to what the MPAA and other lobby groups claim, the study doesn’t find a negative effect of BitTorrent piracy on US box office revenues.

(Via TorrentFreak.)

9 Comments on BitTorrent Piracy Doesn’t Affect US Box Office Returns, Study Finds

  1. Since I know of people who download movies from torrent sources, so they don’t have to watch in a movie theatre, I’d say the study is inaccurate about there being no impact on US box office revenues. Unless they mean to say that those downloaders I know never would’ve gone to a theatre if they couldn’t get the movie for free…

  2. Steve, maybe it means wild horses couldn’t drag your friends into theatres; I rarely go because I find the sound levels just way too loud. It destroys the enjoyment for me.
    I guess the next question is whether or not I would buy the DVD (streaming pretty much isn’t available in Canada); usually not, and even finding a torrent is more work than most movies are worth (in my opinion). So I don’t download movies, and I don’t go to theatres.

  3. Affect. Not Effect.

  4. As Phil said, many people won’t go to the theater or buy a DVD for one reason or another, regardless of film availability online. In that sense, piracy helps the film industry by spreading word of good films and increasing awareness of lesser-known ones. Piracy allows people to take chances on films they’re not sure about or had never heard before, with the only cost being time. Pirates can tell others about the good movie they watched over the weekend, and those others may purchase the DVD or other merchandise. The pirates themselves may decide the film was enjoyable enough to merit their purchase, a purchase they would not have made otherwise.

    Beyond all that, doesn’t Hollywood make enough money already? Most people understand they need to buy the products of their favorite artists to support them, but those A-list stars with 18 Ferraris across 4 mansions really don’t need any more money.

  5. Steven, the “instance” of piracy is seldom the same as its impact. Any instance of piracy represents an infringement, but it is not necessarily equivalent to a lost sale.

    Paul, the error starts with the TorrentFreak post, but the verb in the title should be “affect”, not “effect”.

  6. @Squishy: The report mentions “box office” revenue, which isn’t the same as an A-lister’s salary. Box office also goes to supporting the theatres themselves, which means local salaries; so it’s worthwhile to examine anything that impacts the theatre industry.

    @Brian: “Seldom the same” isn’t the same as “no” impact.

  7. Yet another independent report that trashes the Movie Industry’s claims.

  8. Fixed. The error does come from the original article, though I am a little surprised Paul didn’t catch it. :)

  9. Delaying releases of entertainment products available elsewhere costs you money.

    Probably young kids would be able to tell you that. :)

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