Did Shutting Down a Major "Piracy" Site Actually Hurt Movie Revenue?

An August 27th, 2013 post to Variety reports on a study that found that the closing of Megaupload did not have a positive effect on box office. In fact, according to a global survey of over 10,000 movies, paradoxically box office revenues of a majority of movies went down after Megaupload was shuttered by the FBI in January of 2012. (The photo above shows Megaupload founder Kim DotCom on the right and his company managers under arrest in 2012 for alleged copyright violations and fraud.)

According to a study published on August 20th, 2013 by researchers from the Munich School of Management and the Copenhagen Business School, only a few large blockbusters possibly benefited from the absence of Megaupload - while midrange and smaller movies actually suffered.

How could that be?

Shouldn't the closing of a massive source of unpermissioned copies (allegedly 4% of all internet traffic at one time was said to be accessing files from Megaupload) be a positive for most filmmakers?

Apparently not.

According to the researchers: "[O]nline piracy acts as a mechanism to spread information... from consumers with low willingness to pay to consumers with high willingness to pay. This information-spreading effect of illegal downloads seems to be especially important for movies with smaller audiences."

No comments:

Randy Finch's Film Blog:

Thoughts from a film producer about making and distributing films.