New Study Claims Film Piracy may Benefit Independent Productions

A new report looks at the link between Megaupload and  its box office effects. The findings were a bit surprising, concluding that film piracy may benefit independent films. Maybe the pirates were on to something…

The Washington Post reported on the recent study by economists at the Munich School of Management and Copenhagen Business School, that examined box office receipts before and after the shutdown of the infamous  pirating website Megaupload.  The team behind the study initially theorized that after the Megaupload shutdown in January 2012, profits would ideally jump for films.

While the study found that  major tent pole films such as “Harry Potter” held pretty steady, it was smaller films that saw negative effects of the Megaupload’s shutdown.

According to the study, smaller films rely more on word-of-mouth compared to the major marketing push that a Harry Potter film had.

The conclusion from the study features the following theorized example. Imagine two friends: friend A only watches films legally, while friend B watches both pirated and legal films. Friend B often recommends pirated content to friend A, who in turn legally pays money to see it. Now that there are fewer places to find pirated material, friend B is less likely to recommend films.

Needless to say, the study has raised some controversy with the MPAA, who questioned the research methodology, saying:

“…timing or other factors that are completely unrelated to Megaupload impact the box office performance of small, medium or large films.”

However, that’s getting away from the bigger motion picture (we’re sorry), where does a site like Megaupload fit into consumer culture? Pirating films and television is becoming more prevalent every day. We’ve also seen this effect on television shows like “Game of Thrones.” (Has “Girls” been getting a similar bump?)

Obviously, the study lacks some relevant information such as demographic data (pirates tend to avoid giving out their personal information), so for production companies to use this knowledge to their advantage could be difficult. It’s a bit hard to believe someone downloading “Marvel’s The Avengers” is also downloading say, “Compliance.” It would be interesting to see a Venn Diagram of people who are pirating “Iron Man 3” and “Before Midnight,” but one could only imagine that it’s pretty small.

Still, smaller films and independent filmmakers are heading towards streaming services, like Video on Demand and Netflix, to generate a little buzz and getting a word of mouth out there. So, while there might be fewer Megauploads, there are still ways to get around the Hollywood system.

Source: Social Science Research Network
Via: Washington Post