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Movies Piracy The Almighty Buck

Economist: File Sharing's Impact On Movies Is Modest At Most 214

Posted by samzenpus
from the boosting-sales dept.
First time accepted submitter SillyBoy123 writes What is the impact of file sharing releases on the movie industry? Ask the studios and they will say billions. An economist named Koleman Strumph is presenting a paper at the National Bureau of Economics this week that tries to estimate the crowd out from these releases. His conclusion: "I find that file sharing has only a modest impact on box office revenue." In fact, Strumph finds that file sharing before the official release of a movie can actually be beneficial to revenues: "One consistent result is that file sharing arrivals shortly before the theatrical opening have a modest positive effect on box office revenue. One explanation is that such releases create greater awareness of the film. This is also the period of heaviest advertising. In conjunction with the main estimates, this suggests that free and potentially degraded goods such as the lower quality movies available on file sharing networks can have some beneficial effects on intellectual property."
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Economist: File Sharing's Impact On Movies Is Modest At Most

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  • by King_TJ (85913) on Monday July 14, 2014 @10:00AM (#47448177) Journal

    This study's findings simply say the same thing MANY of us have been repeating for decades now about such "intellectual property" as movies, music or computer games. If you're talking about content created for entertainment purposes, the fact that people have the ability to make duplicate copies of it and share it with others (bypassing your centralized, for-pay distribution system for it) doesn't mean you'll really lose much, if any, potential profit.

    The #1 factor is convenience. When people want to be entertained, they typically have a limited time window they're able to use for it. (EG. You finally get a chance to get together with your friends on a weekend, when nobody has to go in to work, and your plan is to go watch a new movie that all of you want to see. If you aren't able to see it during THAT narrow time slot? Then chances are you're not going to see it at all.)

    The theaters are ready to take your money and show you that movie, at one of a number of convenient, published time slots. All you have to do is show up.

    That's always going to trump someone's plan to reproduce the same experience by downloading a pirated copy of the movie (probably having to screw around with it multiple times to find a copy encoded with the right language, no annoying subtitles, and in good enough quality), and THEN having to provide an enjoyable enough viewing experience for it. Even in the era of home theaters, how many of us really have such a setup at home where we'd be proud to show downloaded movies to our friends, knowing they'd enjoy it just as much as going out to the movie with us? I *used* to have a half way decent approximation at my old house, but since I moved, I don't anymore. I'd have to spend many thousands of dollars finishing part of our basement to even consider replicating it again.....

  • Already been done. (Score:5, Insightful)

    by Joe Gillian (3683399) on Monday July 14, 2014 @10:01AM (#47448189)

    There was a study a few years ago out of one of the Scandinavian countries - I think it was Sweden, but it might well have been Finland or Denmark - which stated that piracy had no impact on overall entertainment industry profits. What they found, as I recall, was that there was no impact because people spend roughly the same amount on entertainment regardless of how much they pirate, it was simply that they were spending it in different areas. Someone who was pirating films, for instance, would still spend their entertainment budget but might do so on books or music or video games instead of films.

    I also agree with his second point about pre-releases being good for films. When Deus Ex: Human Revolution came out some years ago, there was a leak of a "beta" build that consisted of about 50-60% of the full game about a month before the game's street date. Up until that point, a lot of people believed that HR would be complete crap.. but then the leak happened and changed a lot of people's minds (myself included) about it. I don't think I would've bought it, even on deep discount, if I hadn't played that leak first.

  • by tomhath (637240) on Monday July 14, 2014 @10:11AM (#47448265)

    What he can't study is the that impact unlimited file sharing would have on major studio pictures. All he can say is that restricting piracy to only those people who are willing to make the extra effort and take the (albeit) small risk has the double benefit of stirring up some interest while still encouraging most people to pay.

    So it's reasonable to say that Hollywood's efforts to control piracy is working quite well.

  • by Anonymous Coward on Monday July 14, 2014 @10:24AM (#47448361)

    This. Region bullshit seriously needs to die.

    Countries do not define a language. I don't think there is a single country on Earth that speaks one and only one language.

    I regularly watch some Japanese comedy shows, but would never be able to pay for them because of stupid region crap.

    Equally I would also love it if producers of content would be more open to accepting donations for no reason other than donations.
    There are so many I would happily donate money since it was only those people who I came across in the "supply chain", why would I pay money to a bunch of people that never helped me consume such content? Why would I pay for trucks that never delivered a movie to me?
    Why are trucks still delivering these? There are plenty of ways to send copies around the world without having to send millions of discs and cases wastefully around the world.
    There are pseudo-digital distribution methods that can be done (same for games), such as sending them to licensed machines in stores, and then you go in with a memory stick, a disc, get it copied, pay, leave, bam, save BILLIONS every year.

    Nope. Can't be making content consumption easier, can we? Gotta make you suffer for it!

  • by Anonymous Coward on Monday July 14, 2014 @10:24AM (#47448367)

    Why not? Look at the profit of stuff that can be shared freely, for example because of no copyright, or perhaps because its foreign and people don't expect to get sued over it. A good example could be porn. I doubt many people feel bad for downloading porn for free, and they probably don't even think twice about risk of copyright infringement. So if porn is still profitable, then perhaps piracy isn't that big a problem. Perhaps the old model or price you sell at is no longer acceptable in the market. Perhaps many things.

  • by jeIIomizer (3670945) on Monday July 14, 2014 @10:40AM (#47448505)

    So it's reasonable to say that Hollywood's efforts to control piracy is working quite well.

    Without hard scientific proof of that, no, it is not reasonable.

  • by Joe Gillian (3683399) on Monday July 14, 2014 @11:11AM (#47448773)

    This is actually how a bunch of anime (and games) winds up getting translated and released stateside, but at the same time there's a bunch of companies that refuse to translate no matter what. People who want to watch/play them do fan translations, which are in a legal grey area at best (the shows/games aren't licensed in the United States, and normally there aren't too many legal challenges from Japan) and later on the companies hopefully do an official release.

    Best example I can think of in recent memory is Dangan Ronpa, a visual novel on the PSP about a bunch of high schoolers trapped in a high school and murdering each other. Dangan Ronpa and its sequel were both fan-translated on the PSP, became insanely popular as a result, and were eventually released (with a butchered translation) stateside on the Vita by NIS. As much as I dislike NIS for their love of pointless censorship that would make Ted Woolsey blush, they at least got Dangan Ronpa somewhat correct, though most people agree that the fan translation was better. At least they gave it a chance, unlike Nintendo with Mother 3 (later fan-translated and half-reprogrammed by Tomato and his team) and Capcom with Gyakuten Kenji 2 (later fan-translated as Ace Attorney Investigations 2: Prosecutor's Path).

  • by ShanghaiBill (739463) on Monday July 14, 2014 @11:35AM (#47448955)

    That all the work to prevent piracy of movies is paying off.

    By far the best way to prevent piracy is to make it convenient for people to pay to see the movie. I have a Netflix account, Amazon Prime, and Apple TV. Yet 90% of the movies I want to watch, even relatively old titles, are not available for streaming. So I can either pirate or not watch the movie. It is easy for me to rationalize the piracy, since the alternative (not watching) also results in zero revenue for the studio. I would pay for the movie if it was available.

  • The paper goes into some detail regarding the latest X-Men movie, where there were 7million downloads of a pre-production work copy of the movie, and, with heavy news coverage, it could be assumed that everyone seeing the movie would know it could have been downloaded for free. Even there, the small, positive bump in revenue was found. That's the smoking gun, IMHO.

  • Value for money (Score:4, Insightful)

    by sjbe (173966) on Monday July 14, 2014 @01:02PM (#47449603)

    I wonder how much the illegality of it figures into the convenience.

    A lot. iTunes is probably the best example of this. Prior to iTunes, people turned to services like Napster. Partly because of money of course but a lot of it was simply convenience. They could actually find what they were looking for and get it for a modest investment. Then iTunes came along and people could find much of what they wanted, quickly and legally, in exchange for an amount of money they could live with. They no longer had to buy an album with 12 tracks of crap for $10 to get the 1 or 2 songs they actually wanted. Now people buy literally billions of songs all on the up and up because it is convenient and the price isn't a slap in the face.

    Would they continue to want to go to the theater, which has a much larger screen and great sound, but which also costs a fair bit (and even more for any snacks you want, which are actually the theater's primary profit center) and which isn't as convenient in either time or space as having it at home?

    If they value the things the theater provides then yes they will go. If they don't then they won't. Right now I think the value for money you get from most theaters is pretty poor. I get to sit in an uncomfortable chair with a sticky floor, pay $8-15 for a ticket, the only food is outrageously priced food you normally only get at a high school concession stand served by poorly trained high school students in unsanitary conditions. Gee, wonder why people might not enjoy that.

    There are some theaters like Alamo Drafthouse down in Austin Texas which seem to get it and are trying to offer a better experience. I really wouldn't mind going to a movie and dropping some bucks for some actually good food, comfortable seats, amazing sound, cool extras, maybe a dvd to take home, etc.

  • by ShanghaiBill (739463) on Monday July 14, 2014 @02:37PM (#47450287)

    The world doesn't exist solely to accommodate your lifestyle.

    If a business accommodates the customer's lifestyle, it will prosper. If it does not, it will go out of business.

    Just be honest about your motivations and actions instead of rationalizing.

    Nope. I am going to continue to rationalize. I have better things to do than sit around feeling guilty.

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