With what is now many, many years covering issues of piracy and intellectual property, it will come as no surprise to you that we’ve specifically dived into the intersection of copyright infringement and the film industry over and over. What is something of a counter-intuitive notion, however, is that we also have a decade-long post history pointing out that, despite all the fear-mongering about how piracy is killing the movie industry, box office records keep getting broken on the regular. The easy point to make is that obviously piracy is not killing the film industry, given how many movie tickets are being sold. But perhaps, according to a recent study, we should have gone one further and explored whether box office records were being broken in part because of piracy.
Researchers from the University of Houston and Western University dug into the effect of The Pirate Bay’s offline status in part of 2014 and came away with some surprising findings.
Movies shared on The Pirate Bay are the main focus. The researchers use the Pirate Bay downtime following the 2014 raid to measure its impact on word-of-mouth promotion and box office revenues.
Based on a sample of hundreds of movie torrents and data from most popular movie review sites, Lu and his colleagues estimated this effect. Their results are rather intriguing.
And, as you might expect, those results are also more nuanced than either “Piracy bad!” or “Piracy fine!” mantras. Instead, the research suggests that having pirated copies of a film prior to release has a definite negative impact on box office numbers. But, importantly, the opposite is true when a film is made illicitly available after release.
This changes when the researchers look at post-release piracy. That is, piracy which occurs after a film has premiered at the box office. In this case, there’s a positive effect on box office revenue through an increase in word-of-mouth promotion (WOM).
“We find that the volume of online WOM mediates the impact of piracy on the box office. Based on counterfactual simulations, the WOM-effect from post-release piracy on the box office increases revenue by about 3.0%,” they write.
In other words, when The Pirate Bay went down, box office revenue dropped as well. This effect is significant and not linked to seasonal changes, as it wasn’t there in previous years. The positive effect is strongest during the beginning of a movie’s release and differs per genre. Action movies, comedies, and thrillers, benefit more from a positive piracy “buzz” than dramas, for example.
So what does this mean? Well, for starters, it means that the MPAA’s myopic notion that piracy is always bad, full-stop, is refuted by the data. Instead, the data suggests that movie studios could make very good use of piracy in the right circumstances, or at the very least they could focus their enforcement efforts only in the areas where piracy appears to cause actual harm, rather than where it helps sales numbers. This would be the logical course to take, given that post-release piracy appears to be a boon to box office revenue.
“Pre-release piracy can have a substantial negative effect, in our data this overwhelms the positive effect we look at. That is, the overall effect of piracy is still negative,” Lu tells us.
That said, there is an interesting lesson to be learned. Based on this study, copyright enforcement should be mainly targeted on early leaks. If these are dealt with, the main problem is ‘gone.’
“Our findings suggest approaches to target scarce anti-piracy resources, such as focusing on tackling damaging pre-release piracy,” the researchers write.
Makes sense. Hollywood, however, has never shown itself to be capable of this kind of nuance. Instead, sledgehammers are preferred over more precise approaches, with lobbying power dedicated to broad policy statements that apparently would at least in part be a detriment to sales revenues. And if that isn’t stupid, I don’t know what is.
Permalink | Comments | Email This Story