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Economist: File Sharing's Impact On Movies Is Modest At Most
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."
That all the work to prevent piracy of movies is paying off.
Good work Hollywood!
If something is so important that you feel the need to post it on the internet... It probably isn't that important.
File sharing's impact on lawyer revenue is phenomenal. Don't kill the golden goose!
but isn't that like saying stealing an invention and reproducing it poorly will make people buy the original? My argument is that it may put them off the product altogether.
sudo apt-get install sl && sl
I'll confess that I occasionally check out a 'free' version of a movie/series to see if it sucks or not before spending money on tickets or DVD sets. If it's good, I make it a point to go check it out in the theater etc. The 'free' version fills the role of a non-whitewashed preview.
Pretty sure bluray and dvd rips have a significantly higher quality than what is commercially available, as they have all the unskippable bullshit stripped out.
The economist, spreading FUD.
Piracy has ruined the movie industry like it ruined the music industry. Counting all the billions in lost sales because of people distributing data by making it available mean that Hollywood and movie studios have run out of money.
Authors, musicians, actors, directors, agents and artists are all dying of starvation.
Why do you think there has been a rapid decline in content creation? less movies and music every single year, year on year. Piracy is killing the industry.
Look at the terrible fate of Microsoft, suffering the most pirated OS to date.
Poor bastards.
There are a lot of movie buffs in countries where good foreign and hollywood movies are not released. Video libraries are poorly equipped for the niche films and are usually expensive. P2P provides these people with movies they'd wanna watch . I dont think that'd hurt the industry much .. maybe they'll get a few foreign fans .
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.....
Every movie i've ever purchased from a hadj in afghanistan or some little old lady in the back of a restaurant in New York has done one of two things.
1)It's either completely turned me off of the movie because it was horrible. This doesn't cost a thing because now the money never changed hands; in the case of ultraviolet, i had to go get my money back for the movie being so terrible.
2)Has been awesome enough that i either simply want to see it on the theater screen with their lovely DTS surround or I want to watch it in 3D on a huge screen.
I'm a huge supporter of try before you buy. I had frozen MONTHS before it released on dvd and still ended up taking my daughters to the movies multiple times to see it.
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.
It could be seen that artificially inflating the number of seeder of a low performing movie could increase its box office success. And then sue to make revenue on both ends.
I go to the movie theater to get an experience and that experience is tangential to the actual movie itself. I go to a movie theater because either A) they have a large screen and great sound and other features (sometimes food) that I cannot reasonably replicate at home or B) I'm on a date or other social outing or C) both of the above. If I wanted to just see the movie and don't care if it is on a shitty little screen at home TV or my computer then the theater going experience has nothing to offer me. I go to see Godzilla in the theater because big monsters should be seen on a big screen with awesome sound. I go to see a RomCom in theaters because I'm on a date. Theaters need to cater to these reasons or there is no reason to go there. Places like Alamo Drafthouse seem to comprehend this.
As for media purchases, I'm more than happy to buy a copy of a DVD (or similar media) IF and only if the price is not outrageous. The price to buy a DVD should be similar or less than the cost to see the movie in theaters. I'm giving up a large screen and awesome sound but I can watch the movie repeatedly. If the movie publisher insists that their movie costs $25 to view on my shitty little screen at home, then they should damn well expect me to look for a more economical way to view that movie - possibly including piracy if I'm sufficiently motivated. I'm simply not willing to pay that much for a mediocre experience even if I can play it as much as I want. Sell the DVDs for reasonable prices and with minimal restrictions (such as no mandatory ads EVER) and most people will be willing to fork over a few bucks without much fuss. People buy music from iTunes because for them it is a reasonable economic value (in spite of its flaws. If they charged say $3/song I doubt it would be nearly as popular.
Basically if they provide a good product for a reasonable price, I'm happy to pay them for their work. If they insist on gouging me and place too many obstacles in my way then they should expect me to go around them and pay them nothing. If the movie turns out to be shitty I expect the price to reflect that fact quickly. I think most people feel similarly.
Every creative in the movie making process knows this and has pointed it out ad infinitum. People who want to see your movie, will see it. Pirated copies act as nothing more than free advertising. The only people pushing the DRM and piracy angle are the god damn bean counters, because they are under the failed impression FORCING people to do anything is a good way to react to a situation. I just wish I could force them to pull their heads out of their asses.
You wouldn't expect pirates' files to replace theaters, nor are they intended to.
Pirates' files are the solution to the DRMed media that the movie people rent/sell, which can't be easily (or legally) played on many HTPCs, or in the few cases when it can (e.g. HTPC runs Microsoft Windows, or person is using a non-"computer" blu-ray player) it has various malfeatures.
Pirates' files should be hitting the industry's revenues on that crap, and every person who enjoys movies ought to be helping out. If you know someone who has a blu-ray player, offer them a flash drive full of movies.
The money spent trying to stop piracy is a direct result of piracy. So you can take that money spent right off the bottom line and attribute it to piracy. The fact is people do receive a service without paying for it. All you have to do is find one person who has downloaded a movie instead of going to see it in the theaters to prove this. Let's be honest here and compare the number of people who download movies so they don't have to spend money to see it to those who download them to see if they want to spend money. We all know how that number looks.
pirating tv series and movies has probably saved me at least $2k a year for the last 12 years or so
and I can keep up with pop culture by seeing popular shows the day they come out (in 720p without commercials)
I don't know exactly what would make me consider paying for movies/tv/music/books/comics again but the way things are going I don't think I ever will
I can barely afford to support my family on my middle class income as it stands much less saving for retirement, carrying as much insurance as I should, etc
the (after tax) money I save from downloading allows me to live a better lifestyle than my income would normally permit
This is hard to square with my experience. I know folks who used to pay money to see movies who no longer do because they can just watch them for free at home only days after their theatrical release (if not earlier). That said, these guys are a pretty small minority among the set of all people I know who like to watch movies.
We need crimes like internet piracy to help foment the growth of the global police state! These are real criminals who needed to be hunted down and punished to the full extent of the law (and then some) at the behest of our media moguls who help fill the political troughs. US gets to go first, but one day China and Russia would sure love a turn.
The availability of low-cost subscription models for film distribution mostly removes the incentive to pirate. If there were a similar paradigm for current TV programming, Hollywood wouldn't have a thing to worry about.
The reason Hollywood doesn't like piracy is because they don't want you seeing (for free) how crappy 90% of the product is.
The bulk of their business is built on trailers and a massive marketing engine convincing you that the movie "might be" good enough to watch and spend your money on. Usually they're wrong.
Honestly, I don't know many cinephiles that actually go to theaters anymore.
Want to know how most of us feel about Hollywood? I'll invite you to watch The Onion's film reviewer Peter K Rosenthal telling you (NSFW language) how he really feels: http://www.theonion.com/video/...
-Styopa
Comment removed based on user account deletion
In their books all pirating is bad even if there are some benefits.
... all this proves is that studies can prove absolutely anything that you want them to.
File under 'M' for 'Manic ranting'
What is this the decade of the reboot?
Dont you guys have a SINGLE original idea?
Fuck hollywood. Im not downloading it, I wont even watch that shit for FREE.
I've often wondered about the "Piracy Stigma - Effect" of those whos are "intellectually capable" of making the effort to illegally download the content.
First there is the incentive to "save" a marginally small amount of money, in exchange for a large amount of effort, for a lower quality product.. that requires some effort to "find" in the first place.. Piracy is "not an easy thing" at least in theory to committ.
If you have ever rented a low grade DVD and had to put up with Artifacting.. or possibly not being able to "finish" seeing a movie simply because the media is broken.. it seems that in itself would be a disincentive to "ever" Pirate again.. the mere frustration and experience of a marginal copy with poor video and audio.. or out of sync.. or layered with additional Pirate content.. assuming they could insert their own form of Commercials.. or Public Service messages.. and then end five minutes before the end of the movie.. why bother?
A supermarket online of legal and easily accessible high quality, and recourse if your download is corrupted or doesn't succeed is readily available. And who are you racing against to see the movie in the theater? Stuff goes from screen to download in a matter of weeks.. watch it on your own schedule.
Trailers are okay.. they are marketing materials.. but to watch 95% of a movie and then feel obligated to go rent it to finish seeing something that took you so much effort to Pirate and then fail to see.. just seems like such a frustrating waste of time. A Pirate movie is the ultimate bate and switch marketing engine.. even for generating rampant word of mouth.. imagine the movie goer who has seen 95% of a movie, or at poor resolution.. and then having to wait two weeks for an offical release.. they will be talking about it.. without the final scenes in mind.. but eager to finish the experience.. or never do that again. Its the ultimate Upsell and deterent.
3 episodes each of John Oliver and Bill Maher. My net response is great, keep your content secret, fine by me. I don't have cable TV, and it is farcical to think I would pick up a $100/month TV subscription to watch 90 minutes a week of talking heads, particularly since those shows are only on maybe half the year or so. Their business model is so broken that I can't even buy their content in a reasonable package, such as ala carte or online only. Movies I don't care about and would not bother pirating - but my wife just checks those out from the library.
I do have to say John Oliver scored a sweetheart deal. Millions of dollars for one thirty minute show a week, complete with all sorts of holiday time off. He can probably do all his creative just in the time he sits on the can each week.
What impact does file sharing have on the sales of DVD's and BluRay? I would expect advance availability to boost theatrical revenues, as the study indicates. But downloading likely has some negative effect on media sales post-release.
Of course, file sharing would have less of an impact if the industry's media model wasn't broken in so many ways - DRM, unskippable ads and warnings, laughably high prices, region locking, and any other ways movie makers have found to take careful aim before shooting themselves in the foot repeatedly by pissing off their increasingly non-captive audience.
As for theatrical releases, I very seldom go any more. I love the big screen, but I HATE the product ads, the self-serving propagandistic trivia games, and the over-priced snacks that ruin what would otherwise be an enjoyable evening out.
'The Economy' is a giant Ponzi scheme whose most pitiable suckers are the youngest among us and the yet-unborn.
Piracy has been alive for 20 years+ now, it hasn't impacted shit. Knock it off and move on.
Think of how much worse it would be if Megaupload had stayed up!
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.
"We receive as friendly that which agrees with, we resist with dislike that which opposes us" - Faraday
But not for the reason you think.
A question we should be asking ourselves is what impact would piracy have on movie revenue if we’d had higher speed Internet in the days of Napster and Kazaa. We currently live in a culture where even non-technical people know that piracy is a copyright violation. There’s also the looming threat of being sucked up in a dredging operation or having your ISP (or the NSA) volunteer information to the MPAA on your metadata. People don’t avoid filesharing because it’s unethical or illegal. They avoid it because it’s relatively inconvenient (requiring technical knowledge), and they fear excessive penalties if they’re caught.
If pirating movies were as simple as downloaing an app and searching people’s libraries, the amount of piracy would be far greater, and the impact on revenue would more significant.
What’s really curious to me, however, is the amount of time and effort some people spend on this. Personally, I’d rather optimize to reduce how much time I spend on it than try to see how cleverly rebellious can be. If I want to watch a movie that’s currently out on DVD, I have four classes of options:
(1) I could spend about half an hour figuring out which of the numerous available torrents is in a playable format and not a fake and then maybe a couple hours downloading it. If I’m really lucky, I can burn it to a DVD that my player will understand so I don’t have to take the time to connect my laptop to the TV.
(2) I could run down to the nearest RedBox, about 15 minutes round trip, and spend the rest of the time doing some consulting work. Not only would I have a legal copy, but I’d come out ahead financially.
(3) If I have some patience to wait a day, I can order my own copy to keep from Amazon Prime, and I’ll STILL come out ahead financially.
(4) If I’m dead-set on a lengthy download, services like iTunes offer up a wide variety of downloadable media.
I suspect most of us clever enough to avoid getting caught pirating think this way. The legal options are just easier, less costly (time==money), and less risky. Those with the skills already in a minority, so the only people doing any significant amount of piracy are those with both the skillls and nothing better to do than to see how clever they can be at unnecessarily breaking the law.
I encounter that attitude a surprising amount, though, among students. There are people who will spend more time and effort trying to BS their way through an assignment and/or find a way to avoiding the need to do it than would be necessary to actually just do the assignment. Doing the assignment requires learning something new, while all this “clever" avoidance relies on established skills. But I don’t know why these people bothered to go to college if they have no interest in learning the material. I guess they feel pressure culturally or parentally, but I don’t like it when they make it my problem.
So you get a PC, a large hard drive, a high speed connection, spend hours searching for movies to down load when you could have just gone to the matinee and paid $7.
How many movies do you have to download to make the economics work?
When Fascism comes to America, it will call itself Anti-Fascism, and tell you to give up your guns.
I don't understand this rationalization. I agree that $25 is certainly wayyy too much money for most movies released to DVD. However that doesn't mean you automatically have a right to get it for free.
Not really expecting or asking for it for free. I'm asking for it for a reasonable price and for that price to be negotiated in good faith. If they can't be reasonable then neither will I. I play by the rules because I think it is the right thing to do but my willingness to do that does have limits. This is a zero sum game. Their costs are fixed so the publisher and I are just bargaining over how to split the dollar. I have no objection to them making a profit but only to a point. I'm willing to play by the rules but only as long as the other party appears to be willing to meet me part way. When they are trying to charge me $25 for a DVD then what the publisher is telling me is that they think they can take advantage of me. I don't really need or want to pirate any media (and I haven't) but if they piss me off enough I will not take the option off the table either even if it is technically against the law.
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.
Wallet piracy that is. The last movie I went to see was the Road after paying close to $50 fo my son and me to some popcorn and pop. Yah yah I know those are not needed but what do you do when you bring in a 13 year old.
by TheSpoom (715771) Uncaring Linux user here. I have nothing to add to this but please continue. *munches popcorn*
The monetary costs of "fighting piracy" is probably far greater than any actual losses. With international treaties, lobbying, investigation, prosecution, lawsuits, direct enforcement (police raids) as well as countless millions handed over to worthless organizations like the MPAA in this effort, the industry and society in general spends more to fight this phantom menace than is prudent.
Of course, common sense would tell us to stop being dumbasses, but there is an entire industry built around "copyright enforcement" and that scam involves too much money to give up anytime soon.
"One consistent result is that file sharing arrivals shortly before the theatrical opening have a modest positive effect on box office revenue."
Isn't it just as likely that movies that are going to be successful are more likely to be leaked?
money saved on entertainment piracy helps other industires flourish as the money saved from people pirating music/movies is spent somewhere else like the local economy.
by TheSpoom (715771) Uncaring Linux user here. I have nothing to add to this but please continue. *munches popcorn*
Then you can afford the $15 to buy. If you are workaholic nerds that is. Especially since that comes out to $7.50 per person, less if you have friends. So close to your magic $5 as to be noise.
The world doesn't exist solely to accommodate your lifestyle. Life with others requires tradeoffs.
Want to keep pirating? OK. Just be honest about your motivations and actions instead of rationalizing.
It can be, but often isn't, and wasn't if we go back in history looking at VHS and DVDs (when they first came out). And I don't hand over the money anymore... I actually buy very little content anymore because of it.
I agree... I wasn't justifying anything illegal. That people violate IP laws because they don't want to pay for their entertainment actually really irks me, and I complain about it all the time. At the same time, it also pisses me off that the honest consumers are the ones that get the most limited flexibility, that get saddled with DRM, and also the "privilege" of paying for it - after all, they are passing the costs of the technology - including licensing the DRM technology - onto us.
Stupid sexy Flanders.
I don't remember people getting up in arms over Analog Rights Management.
It doesn't mean much now, it's built for the future.
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.
I have no money to spare for seeing movies. Period.
So when I download a torrent and watch it (and there's a disgustingly small number that I watch more than 15-20 minutes of), there is absolutely NO loss to the studio. Because if I *had* to pay for it, I just wouldn't see it at all.
I *hate* theatres on top of being broke -- they're full of ignorant perfume and aftershave wearing buttheads playing with their cell phones and talking about what they're going to do after the movie. I don't own a TV, so I'd have to play a DVD on my Linux box. If I'm still going to see it on a small computer screen, why *wouldn't* I settle for a low-res torrent instead of a DVD?
The studios like to portray every case of piracy as "lost revenue." It's not. I firmly believe that in most cases where people download a torrent, either they couldn't *afford* to go to the theatre, or they're previewing the flick to decide if it's worth spending money at the theatre. And if it's not worth the money, they'd have been demanding refunds, so there *still* isn't a loss of revenue.
Seriously -- it costs my buddy over $100 to take the family out for a movie. You think he's going to *gamble* that the movie is worth watching with all the crap that Hollywood pukes onto the big screen nowadays?
I do not fail; I succeed at finding out what does not work.
Just because they didn't call it that? What about Macrovision, the fact that every blank CD, DVD, and VHS and Cassette tapes carries with it a fee that gets paid to the RIAA/MPAA no matter what you use it for; the whine's and cries that piracy would destroy the industry from these companies started long before digital and DRM, 40 years ago the RIAA was claiming recordable cassette tapes would put them out of business. Despite history, the content of their whining hasn't changed.
Stupid sexy Flanders.
Could have told you that, without a study or any silliness, 10 years ago. File sharing was a kick in the nuts for music, cuz music isn't very large, but movies? Never was an issue. Never will be.
MIAA just wanted to play the game same as RIAA, just because it makes sense to them. Too bad it doesn't make sense to anyone else.
"Theft" of data has always been vastly over-valued. They never ever mention how many 'thefts' resulted in an actual sale, or in this case, a family going to see a good movie cuz dad downloaded it and view some or all of it and decided it'd be a lot more fun with the family on the big screen.
Can only help create more interest in seeing the movie in the theater on the 'big screen'. Unless the movie is total crap, as then people will know upfront not to waste their money on a defective product, that they cant get a refund on.
---- Booth was a patriot ----
Ask the studios and they will say billions.
considering it's a multi-hundred-billion dollar industry, "billions" does qualify as modest.
I pay for netflix; and a VPN to access it.
I still pirate stuff that is available off Netflix because netflix is still too inconvenient.
(Recently pirated the anime of Attack on Titan after starting it on Netflix; mostly so I could watch it on the train without using my mobile data - am I still a pirate??)
I think I am, but I don't feel bad about it. Should I?
OK. Just be honest about your motivations and actions instead of rationalizing.
I'd suggest stop your own rationalization. What they are doing is not harmful. You are trying to rationalize that it is even though the story itself demonstrates that it is not true. Grow up please. We need to fix copyright - a perverse, antique law that needs to be overhauled.