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

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A new academic paper by researchers from the University of Minnesota and Wellesley College has examined the link between BitTorrent downloads and box office returns. Contrary to what's often claimed by the movie industry, the researchers conclude that there is no evidence that BitTorrent piracy hurts US box office returns. Internationally, there is a link between downloads and revenues, which the researchers attribute to long release windows.

jackWith 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.

“We do not see evidence of elevated sales displacement in US box office revenue following the adoption of BitTorrent, and we suggest that delayed legal availability of the content abroad may drive the losses to piracy,” the researchers write.

The above means that movie pirates in the US wouldn’t have bought a ticket at the box office if file-sharing was nonexistent. Only international box office sales see a piracy related decline in revenue, which is attributed to long release windows, something the industry itself can address.

Yet, the movie industry lobbyists keep hammering on about eliminating pirate sites, while ignoring the fact that the industry itself can make important steps to decrease international piracy as well. Governments around the world are not blind to this double standard, as both the Netherlands and Switzerland chose to keep unauthorized movie downloading legal until the industry improves the availability of legitimate content.

Of course the study is far from perfect as there are many more factors that influence box office returns. However, the findings clearly suggest that the movie industry itself can take the biggest step towards eliminating piracy “losses,” not lawmakers.


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