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Researchers Find Megaupload Shutdown Hurt Box Office Revenues
An anonymous reader writes "We've heard this one before, over and over again: pirates are the biggest spenders. It therefore shouldn't surprise too many people to learn that shutting down Megaupload earlier this year had a negative effect on box office revenues. The latest finding comes from a paper titled: 'Piracy and Movie Revenues: Evidence from Megaupload.'"
If Megaupload did hurt box office sales, then they obviously hosted lots of pirated material. This is against how the pirates are saying that Megaupload was mostly used for non-piracy related files. So did they host mainly pirated movies etc or did it not?
What movies did they use in their control group? I'm sorry but a 3 page paper with little details on the research is not enough to convince me that they can
make any kind of valid conclusion.
I don't think it's too much of a stretch to say that a lot of things could have happened that caused smaller films to have lower box office revenues this year other than megaupload shutting down.
The actual conclusion of the researchers was:
We find that the shutdown had a negative, yet insignificant effect on box office revenues.
(emphasis mine)
So basically there was basically no effect either way on overall box office revenues. Blockbusters gained from the shutdown of megaupload (probably due to more people forced to go see it in the theatres as they couldn't download it any more), many smaller and less well known movies lost (probably due to less people being able to preview the movie, resulting in less word-of-mouth promotion of a movie).
Interesting results anyway.
I don't think it's too much of a stretch to say that a lot of things could have happened that caused smaller films to have lower box office revenues this year other than megaupload shutting down.
So basically, you are arguing that there is no correlation between a piracy site being there or not an box office revenues?
Apparently the smaller films were negatively affected by the shutdown of the site (made less money). The larger films (500 or more screens) were positively affected by the shut down (made more money).
Box office revenues of movies shown on the average number of screens and below were affected negatively, but the total effect is not statistically significant. For blockbusters (shown on more than 500 screens) the sign is positive (and significant, depending on the specification).
[John]
Shit better not happen!
Just because there is alleged correlation between the two events doesn't mean the lower box office revenues were caused by the shutdown. Perhaps it is due to lackluster movies this year, perhaps it was due to the ever dwindling economy so those who would have normally gone to a movie couldn't justify spending an ever increasing amount on tickets (and concessions if the choose to get those), or perhaps it was just more people going to see "matinee" showings which are often a lot less expensive which drives down revenues but perhaps increases ticket sales. Heck one local theater to me has matinee showings that are $3 and most other showings are less than $5 before 6PM.
Perhaps instead of counting revenues they should count actual ticket sales. Like when they say a movie has broken a box office revenue record, is it because more people are actually seeing the movie or is it because ticket prices are at record highs?
Come on, guys. I thought we were better than this.
Was this report written by the same people who scream that "correlation does not equal causation" when we point out that US per-capita music sales revenue has dropped by 70% in the last 10 years (to the lowest point anytime in the last 50 years) - during the exact period when piracy was on the rise?
The control group is based on matching movie characteristics to the treatment group.
If I wanted to be able to repeat their experiment to see if I got the same results, would I be able to do it based on this description? No I would not. The research might be good, but the presentation is extremely poor.
"First they came for the slanderers and i said nothing."
Waaaaaaaaaaaah !!
I can only say for certain about my own experience, but having had the ability to download a few things to check them out has lead to me purchasing them. For example I while back I saw an episode of Dexter whilst flicking through the channels. Not something I had seen before, but it caught my interest. I downloaded a couple of random episodes from different seasons to have a look at, decided that it was something I would want to watch and so ordered the complete box sets for the first 6 seasons. Without having first been able to sample it like that, there is no way I would of purchased them.
" 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."
This!
+1
I am putting myself to the fullest possible use, which is all I can think that any conscious entity can ever hope to do.
The proof is far more solid than any proofs given of the damage caused by piracy.
Yet you've never once whined about that, have you.
If anyone thinks a bad camcorder copy of a screener will keep someone from going to see a film, then they are a complete and total idiot. 90% of the "pirated" movies on the internet are really low quality screeners or early edits that have crap audio and video quality. And these same videos are the ones the MPAA are claiming HURT their income. Where in fact it helps their income. When you are looking at dropping $40-$80 to go see a movie in the theater, Yes $40 is a realistic number, I recently paid that to take my wife to see SkyFall, you will have people that will not see a film unless they are sure it is not crap.
But the executives out there are so under educated they cant see marketing that is working for them. Now we have metrics that show that "pirated" films do in fact increase sales....
After my experience of taking my wife to a movie opening, I'm not going back again. The movie was OK, but smelling the disgusting feet of a unbathed idiot in the row behind, me or the rude idiots that must text on their phones through the movie as well as the sticky seating and floor means I'll watch them at home when they ome out on BluRay. My theater at home has better sound anyways....
Do not look at laser with remaining good eye.
We have a causation.
And a correlation.
Are you one of those who scream "CORELATION IS NOT CAUSATION" yet then scream "LOOK! SNOW!!! AGW FALSIFIED!!!"?
Or are you one that accepts the RIAA producing all these "studies" of how much sales are hurt by piracy, and ignore this correlation thingy (because in this case it isn't even correlated: just assumed there must be one)?
"We find that the shutdown had a negative, yet insignificant effect on box office revenues"
If it's insignificant, i.e, meaningless, to the researchers, then why is it worth discussing or even posting here?
...it doesn't mean anything in the bigger picture of whether piracy affects sales. Closing Megaupload didn't shut down piracy, everyone just moved onto another hosting services, not to mention all the plethora of peer-to-peer downloading options still available.
I would be far more interested if research would focus on the effect of transformative use of copyrighted material. If there's one change to copyright law that I would back without hesitation, it is a strengthening of protections for, and an expansion of fair use, parodies, and incidental usage. All of those would largely achieve the same positive word-of-mouth effects that the researchers tout, without the negative aspects of piracy.
The paper itself calls it an insignificant effect, so even taking it at face value, it basically amounts to almost nothing.
Couldn't have anything to do with the economy right?
The actual conclusion of the researchers was:
We find that the shutdown had a negative, yet insignificant effect on box office revenues.
You have misquoted the article, leaving out an important qualifier. The true quote actually reads:
"we find that the shutdown had a negative, yet in some cases insignificant effect on box office revenues.”
I need hardly add that this is not a trivial distinction. Assuming you used copy and paste for the quote, you must have then deliberately removed the text reading "in some cases" before you posted. Why exactly would anyone do this, except to change the meaning of the quote, however slightly?
1. They call information "goods". Sorry, that's nonsense. Information creation is a *service*. Information itself can't be dealt, since once it's out even once, its value falls to zero, since it is infinitely abundant. Deliberate artificial scarcity doesn't make it a "good". It makes the one creating it a *criminal*. End of story.
2. They use the propaganda hatespeech of the organized crime, and insult us all, by comparing us us seafaring murderous rapist thugs. Something the organized crime who invented those un-words are much closer to.
We're all now in favor of more shutdowns?
I think the content industries have a perfect streak going: they always oppose technologies that turn out to be, not only not harmful, but actively good for their bottom line.
Radio was going to ruin record sales. A few decades after they lost that one, they were shelling out payola to get on the air.
The cassette tape recorder was going to destroy records. After losing that one, they made a mint selling everybody the same record twice, the new version being portable.
VCRs were going to be to the movie industry what the Boston Strangler was to women; after the Betamax decision, they made money selling cassettes.
The lesson is, that when content industries oppose a new technology, they have to be beaten ... for their OWN good....
Correlation does not imply causation. One can even make the same argument that because Megaupload closed, tiger attacks in Chicago have gone down, too.
Oh, and the obligatory xkcd cartoon: http://xkcd.com/552/
I don't have cable, and I don't really watch TV. That said I typically hear about shows from friends, co workers etc and end up going on line to check them out. If I like them I tend to watch the entire series online.
Typically these shows are on pirate/rogue tv sites and I have to fish through dead links to find working ones. Why? Because I can't watch current or even last seasons episodes online from legit sources 95% of the time.
Now after I watch a show I'll get hooked and watch all of it and then stop and later if the series is done I'll typically buy a box set, when I get in the mood to watch it again. Why simple because finding working links to non legit sites is a hassle and I don't bother to do it.
This year though with the shutdown of megavideo I find myself watching far less tv shows, infact I'm pretty much clueless on the new tv shows that were released this seasons, I've not watched any nor am I following any. Because of this it is pretty unlikely that I'll end up buying any full season dvds/bluerays
Wait, if pirates are the biggest spenders, why would shutting down Megaupload make them into not-spenders? Because it made them into not-pirates? How does a correlation between pirates the demographic and spending habits correlate intuitively with piracy the activity and spending habits? This actually is pretty surprising.
Entirely unlike the shoddy work you have remained silent on
Have I remained silent? Maybe you should look at my comment history before making assumptions/looking like an trolling asshat?
FTFP: "This counterintuitive result 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."
Because they find it harder to do product research, and as a result find less material that they can justify spending money on.
Help I am stuck in a signature factory!
"Folks like me, on the other hand, are contributing to their demise. I suspect my group is far larger than that of the 'can't wait' group and this will start to show in the years to come." It is showing already. Of the people I know who used to fund independent films, none are doing so now, because they don't feel like paying out huge bucks to entertain people like you for free anymore while losing money themselves. (All the while listening to the refrain of idiots crowing "Piracy helps sell more movies!') Thanks for your contribution to a less interesting culture, jerk.
you give the product away for free, and you thereby create interest
duh
intellectual property law is philosophically incoherent. it is your moral duty to ignore it or sabotage it
The article states an observational fact: less mega upload results in less purchases of second tier films. But the implication is that "piracy is good and not a crime". It is a crime whether you think it's good or not. Moreover even if it helped some sellers it may not have helped others (blockbuster owners). So one cannot point to a net increase in sales as being beninficial to all. FOr all we know the per sale profit is also lower of selling cheaper titles. The bottom line however it ultimately it's the copyright holder's decision not yours on whether to sell a movie or not. They are free to act contrary to their own interests. That's the point of giving then the control in the first place.
Some drink at the fountain of knowledge. Others just gargle.
A major piracy website is shut down. The following year, movie sales are down. Therefore, shutting down major piracy websites hurt the box office. If this is the best argument against the MPAA's Stasi-like tactics, we are in a world of hurt. Further proof that America has finally jumped the shark.
It's alright, he's 14. Mom cut his weekly allowance, so he's reallocating resources. After all, he has to afford his WoW account somehow, right?
-- This space for lease, low setup fee, inquire within!
I imagine the people that pirate movies from theaters are releasing pretty crappy quality versions of the movies. If you were to see a movie with alot of detail in it and then forced to watch it in a low quality format where the detail (video and audio) take away from the movie in any significant amount, I imagine many people would then want to go pay for an actual copy or viewing of the movie. In that regard I can see how pirating could help movie sales of GOOD movies, and at the same time possibly hurt sales of bad movies (why pay to see a good quality version of a movie you know sucks). With that in mind we know that most movies do in fact suck, so most of the time I can see how pirating would hurt sales.
http://interserver.net/
That seems specious. Are you telling me not only that pirates constitute at least a plurality of theatergoers, but that they do so based on whether or not they could pirate leaked copies? Megaupload was never a big source of pre-release content, and even after that it was all bootlegs until a DVD rip was made
See, that also confuses me. Because piracy has always been something that affects MEDIA sales: not theater tickets. If anti-piracy organizations a have successfully finagled the dialogue so that the media acts like it is, that's a problem. The weakness the huge anti-piracy apparatus had was that their ad campaigns featuring teary eyed boom mike operators were clearly full of shit because pretty much everyone gets paid off out of the box office returns. Once the budget is covered, the rest of the money: dvd sales, merchandise, etc. gets paid to the studios, with perhaps some small amount paid on residuals (which don't pay any movie crew member's rent) and perhaps other perks (partial merchandising rights etc.) for high profile perfomers/directors. And so anti piracy advocacy has always been about the studios.
However, if there really is someone going around and claiming that box office returns are hurting because of piracy, that needs to be nipped in the bud. Piracy is a war on DVD sales, not on ticket sales. If there is a relationship, it needs to be sussed out thoroughly, before we get legislators to swallow the lie that ALL revenue streams are under threat because the hackers are breaking into our mainframes and stealing all our internets and posting the finished cut of the movie plus all DVD extras BEFORE THE SCRIPT IS EVEN WRITTEN.
Hmmm.... I think that (as suggested above) the piracy of films has the potential to increase ticket sales of bigger budget films and decease sales of small time ones, but only to an extent. As a former pirate of all manner of media, indie films included, I can personally attest that I have purchased plenty of indie films and plan to purchase more, and would probably not be doing so without exposure to them (i.e. my pirating days). All it took was for me to get a job. On that note, I find something often unaccounted for, which is the demographic of teenagers and otherwise unemployed people that later get jobs and begin paying for media. Again, speaking from personal experience.
I have a DVD library of some size ( around 300 titles, some still in wrappers ). I'm also downloading movies. Every single movie in my collection I have seen before buying it. If I haven't seen it I won't buy it.
Speaking as someone who has on occasion watched a pirated movie..
I think you are missing the argument. Video watchers (or Pirates as you like to call them) are essentially "free" advertisement for a movie/film. How many of you saw a film mostly (or in some cases only) because someone you know or had interaction with recommended it? I would bet the numbers would be a pretty high percentage. Think about for every big budget, highly marketed movie, there are at least 2 - 3 dozen that are less so.. And most of us don't have time to go research on IMDB (if its there), or are in areas that the film may make an appearance. Couple this with the several hundred that come out monthly that you know nothing about... Will you actually spend weeks/months trolling through your DVD outlet of choice to find a nugget?.. again, I would bet the numbers are pretty low.. (most of us have jobs/lives/other interests besides this). And I think we can all say that its not like every movie from the film industry is gold. There is a of crap and very few nuggets.
So you have a vehicle that presents people with several videos (crap copies in most cases).. which drums up enough interest that you figure.. what the heck, I want to own the thing so I can watch it properly.. Heck, I fly all the time, and watch most of my movies on airplanes (along with quite a number of other people I have discussed this topic with). when its a crap movie, you say "Glad it was free".. If its really good, you want to watch it properly (excellent video, immersive audio, best environment possible.. (for some its the theater, for others, it home (depending on their rig at home).. And most every study points this out.. (movies, music, etc..).. its not like its dirt cheap to purchase (with everyone wanting to squeeze every last cent from you), or god forbid to watch in the theater.. I read somewhere that 65% of a movie's revenue comes from theater goers.. Both from actual ticket sales, but also word of mouth advertising, and the other ad deals they have with the theaters.
Yes there are some cheap SOB's that won't pay for anything. but those are the same people that are seldom movie goers anyway.. (and usually even the cheapest of the cheap will go, but they want every assurance its worth whatever the cost is).. or they wait until it his the second tier theaters.. The bottom line is there is a place for this action.. Piracy is pretty much a netural impact system because the cost of the good is in the production, not the replication.. if each "copy" actually cost money, then its lost revenue, but the reality is after the movie is done, distribution is churn and burn.. the people like to make the argument that the DVD/CD/BluRay costs X amount retail and since they are not getting that money, its "lost revenue".. but that is like saying "Hey, the guy across the street is giving away crap photocopies of the paintings that I'm selling for 100 bucks and charging admission to see. (no ticket, no view).. ergo, he's "stealing from me".. the reality is, those that were going to buy are still going to buy.. those that won't buy, were never going to.. and then there is a slim middle group that are swayed by the presentation..
But then again, you're saying that piracy has no effect on ticket sales.
By suggesting otherwise, you'd be hypocritical.
But it's still a loss.
Just because I locked my doors and put the rock on the table doesn't mean it is proof that tiger attacks occur in London.
And the existence of Megaupload shows that the antipiracy doesn't work. The continued use of such measures that actually DO remove customers from the pool shows that it is not antipiracy they're worried about.
The producers of SPAM don't care about spam working either. Why should securerom?
Show the proof that antipiracy has worked and that ticket sales go up when it's used and down when it's cracked.
Product research. Exactly.
I downloaded a comedy Christmas DVD last night. It's a family favourite comedian touting "unseen TV footage".
After 45 minutes of "unseen TV footage", which I'm sure I've already seen, the DVD started showing "best bits from previous episodes", which I have seen before on TV.
So, it's an "unseen" DVD where I've already seen most of the content.
Would it make a good Christmas present? Would it bollocks and I feel offended by its misleading "unseen" title.
Deleted.
The only thing burned is my faith in their products.
Family member is now getting socks.
This post contains benzene, nitrosamines, formaldehyde and hydrogen cyanide.
No, he's telling you that they do so based on whether or not they think the movie will be worth watching.
With all the crap that is produced, the default answer to that question (is it worth watching?) is "probably not". What piracy does is allow people to see what they are missing, and figure out that out of the 20 movies they weren't going to see, 2 of them are actually pretty good, and so they will go anyway.
Personally, I don't care for pirating. My OS is Linux, most of the games I play are free software, and my Playstation is not chipped. Guess what the last to movies I went to watch were... "Indiana Jones and the refrigerator" (based on the first three being good, plus my boss paid), and "Return of the King" (because I read the books). Can you see how knowing which movie is worth watching could improve the number of times I go to watch a movie?
Same here. The part about not buying it unless I've seen it, that is.
The difference is, I don't pirate. The size of my DVD collection is up to about 20. Most of them old enough that I have seen them on free-TV long ago.
And yet, you're supposed to be the one that is losing them money, not me.
You can create studies that prove whichever point you're advocating. So while downloaders like this article, I'm pretty sure the movie industry will be pointing at things like this: best ever Thanksgiving weekend.
duh
OS are made to customer specs. Customer is wrong end of story. Unfortunately you don't sell shit to customers if they don't get to do what they want. Why do you think Apple is losing the mobile war at this time? Because they lock users in and they cost more... Freedom and cost of purchase are the only two things most users care about.
I guess that means the theory that megaupload enabled piracy and hurts revenues is invalid.
we are now too lazy to walk to the video store in order to rent a movie, or to go to the theatre for that matter. I'd rather watch random clips on youtube than go to the store personally. Why don't you add _that_ to the bill as well? (in legal terms: "future losses due to acquired laziness")
I recently had to fix/update a Galaxy S2 from Korea (to allow it to work in Canada). There are plenty of ROM's for english-speaking countries, but finding one that matched the Korean model (and not being able to read Korean well myself) was damn hard.
The annoying part is that when I finally did run across some older posts with ROM's (which are perfectly legal, mind you) for the damn thing, clicking through the link brought me MegaUpload and the "this domain has been seized" warning.
So there's a legitimate use that was killed in the "war on piracy." I'm sure there are plenty of others, as MU was a great+convenient way for sharing patching and other large files
There's always a good portion of music that's crap. Nowadays with online libraries, you get to see more music in general so it's somewhat of a percentage game.
The biggest change though is what's essentially the death of the single. Not many people are going to plop down $10+ for a single song, or $10-20 for an album which only has one or two decent songs.
iTunes etc allow you to by single songs at a reasonable price without the need for "singles" albums or crappy filler.
My music purchases are probably up with the advent of digital online music, but purchases of physical media is down. If possible, I buy from the artist as directly as possible, or otherwise from iTunes/amazon/etc.
With the advent of things like the piratebay actively doing promos, and the move away from Big Labels' control of the distribution or even promotional channels channels in general, there's a fundamental shift in music.
Hopefully in the future this means that - while an artist might not be able to sell $10million worth of an album - they will be able to sell a slightly lower volume for a slightly higher cut (or at least a less draconian contract).
Time to break out The Half-Life of Facts. I love the implied syllogism behind this kind of statement.
contingent_fact => radical_change
Of course, radical_change has no impact on contingent_fact. Just not going to happen.
Nice try, pirates!
However, if there really is someone going around and claiming that box office returns are hurting because of piracy, that needs to be nipped in the bud. Piracy is a war on DVD sales, not on ticket sales. If there is a relationship, it needs to be sussed out thoroughly, before we get legislators to swallow the lie that ALL revenue streams are under threat because the hackers are breaking into our mainframes and stealing all our internets and posting the finished cut of the movie plus all DVD extras BEFORE THE SCRIPT IS EVEN WRITTEN.
Strictly speaking, piracy can affect both theatrical releases and media releases. Quite a bit of pirated content appears prior or during certain movie's theatrical release.
So technically speaking it can hurt sales, but requires better research to back this up.
Companies in the entertainment industry don't apose piracy on moral grounds. They're about the bottom dollar. They're all ways researching ways to improve sale. If there was any truth to this statement that piracy help improve sale they would be the first to figure that out and they'd be the first to jump on the support piracy band waggon. If it didn't effect sale significantly either way they wouldn't be wasting money on legal legislation against piracy and lobbying for more antipiracy laws, and you'd would never here about people being arrested for pirating movies and software and the SOPA & PIPA bill would have never existed.
But these are opening weekend grosses....whatever