Megaupload Shutdown Hurt Box Office Revenues

Discussion in 'BlackHat Lounge' started by GreenGoblin, Nov 26, 2012.

  1. GreenGoblin

    GreenGoblin BANNED BANNED

    Jul 17, 2008
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    As always take this as a grain of salt, since there's no real evidence to prove yay or nay but I do study consumer psychology like everyone else here and I think this
    is worth talking about. Does piracy really effect box office revenue? Once you take a look how society is today as a whole just from a social stand point are we humans less likely to go to the movies and watch a movie just because we saw it bootlegged.

    Think about for a second I mean who is really gonna sit home on there PC and watch bootleg movies alone, and its really not romantic to be on a date and ask the chick to come over and watch a bootleg you would come off a cheapskate I guess the real question is what's more important to humans being social or saving 11 bucks on a movie tickets, anyway here's the article with the source below.

    A new paper suggests that box office revenues were negatively impacted after the shutdown of Megaupload. The dip in revenues was most visible for average size and smaller films. According to the researchers this may have been caused by the loss of word-of-mouth promotion by people who used the popular file-hosting site to share movies. For blockbuster movies the Megaupload shutdown had the opposite effect.

    In common with every file-sharing service, Megaupload was used by some of its members to host copyright-infringing movies.

    For this reason the MPAA was one of the main facilitators of the Megaupload investigation, which ultimately led to the shutdown of the company in January.

    The movie industry was quick to praise the government's actions, but a new report suggests that Megaupload's demise actually resulted in lower box office revenues.

    Researchers from Munich School of Management and Copenhagen Business School published a short paper titled "Piracy and Movie Revenues: Evidence from Megaupload." The study analyzes weekly data from 1344 movies in 49 countries over a five-year period, to asses the impact of the Megaupload shutdown on movie theater visits.

    The researchers theorize that some films may actually benefit from piracy due to word of mouth promotion, and their findings partly support this idea.

    Comparing box office revenues before and after the Megaupload raids shows that overall box office revenues went down. The effects are small, but consistent across different sample designs when taking into account factors such as inflation, Internet penetration and the popularity of Megaupload in each country.

    "In all specifications we find that the shutdown had a negative, yet in some cases insignificant effect, on box office revenues," the researchers write.

    The researchers therefore believe that their findings may support the notion that piracy can act as promotion. Those who pirate movies may talk about them to friends, who unlike them do pay for movie tickets.

    "Our counter-intuitive finding may suggest support for the theoretical perspective of (social) network effects where file-sharing acts as a mechanism to spread information about a good from consumers with zero or low willingness to pay to users with high willingness to pay," they write.

    The researchers did find, however, that this effect does not occur for blockbuster movies that are shown on more than 500 screens. For these films box office revenues got a relative boost after Megaupload's demise.

    This suggests blockbuster movies may be less prone to word-of-mouth promotion by movie pirates.

    "The information-spreading effect of illegal downloads seems to be especially important for movies with smaller audiences. ‘Traditional' theories that predict substitution may be more applicable to blockbusters," the researchers explain.

    While the results are promising and controversial, more research is needed to prove causality of the effects that were found. Whatever the case, we don't think the MPAA will cheer on Kim Dotcom anytime soon.
    Last edited: Nov 26, 2012
  2. hawke

    hawke Power Member

    Nov 14, 2008
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    Shitty movies affect box office revenue ....
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  3. cjmixers

    cjmixers Junior Member

    Jan 18, 2011
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    On a planet
    I know I stopped going to the movies once they closed Megaupload down. I am not going to support the movie companies greed for the most part.
    Its not fair that they charge $20 per ticket in and is just pure greed. Its just like Apple: The prices do not budge because people keep buying their products. I understand that they want to keep their profits high and gouge the average jane like myself. But, I have a right to look for a cheaper alternative. And lets face it, Bootlegging has been around for DECADES. It wasnt an issue until many others started to see they were being screwed.