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."

Comments

I'll confess

[Anonymous Coward]

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.

"Lower quality"?

[kruach aum]

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.

Re:"Lower quality"?

[Stewie241]

I did gloss it over in my write up though I did not forget it. I somewhat addressed that in my closing question. To expand, I think that there are some people who just enjoy going to the movies. For whatever reason, for them, all the risks of the annoying behaviour that you describe together with the cost are shadowed by the pleasure of their experience. Maybe it is just about doing something out in public, or whatever. I dunno. If we assume this, then it is possible that the pre-release leak of the movie would incline their choice of movie (given that they've *already* decided to go to the theater) towards a new release that just became available in pirated form.

I personally find $25 to see a movie with my wife a bit hard to swallow and tend to only go on somebody else's suggest (to be social), but some people really enjoy the theater experience and would pay regardless of whether the film is available in pirated form or not.

My suspicion is that file sharing would only affect the segment of people who value being up on the latest movies but don't value the theatre experience.

As an aside, the report at http://www.mpaa.org/wp-content... provides some interesting statistics about ticket sale volume (in summary, "2012 U.S./Canada box office was $10.8 billion, up 6% compared to $10.2 billion in 2011, and up 12% from five
years ago.", "The 2012 increase in U.S./Canada box office was due to an equivalent increase in admissions (6%) compared to
2011, as admissions reached 1.36 billion,", "More than two-thirds of the U.S./Canada population (68%) – or 225 million people – went to the movies at least
once in 2012, consistent with prior years."

If you assume piracy has been increasing over the last few years then the stats that MPAA is releasing don't really seem to lead to the conclusion that it is affecting ticket sales in a negative fashion.

P2P helps movie buffs outside the US

[invictusvoyd]

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 .

we've known this for a while

[drizuid]

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.

Re:I'm not an anti sharing nazi...

[thaylin]

That is not even comparable... Movies are not inventions, they are works of art. In fact every movie you watch now has already been created with some of the elements different, different actors, different scene and the like. Who here has not seen a crappy movie before but went to see the remake/reboot because they love that genre, or even character.

With a physical invention if you buy a cheap knock off and it does poorly then you assume that the actual product is bad, but with movies, say seeing Atlantic Rim, does not mean that Pacific Rim is just as bad

there is also an expectation that pirated movies will be of lower quality then the unpirated movie.

Re:I'm not an anti sharing nazi...

[Sockatume]

Who's reproducing things poorly? Pirated content these days is either ripped from Blu-Rays sent to critics (who can't make it to a theatre) or the actual theatre-quality data files used in digital projection. It's not only in equal fidelity to the original, it's often in a more convenient format.

I can't speak for movies but I used to download shows where I'd missed episodes, as an alternative to finding a VCR (who even has those?) or waiting six months for a DVD boxed set. It certainly helped me maintain my engagement in the series. I stopped because PVRs became affortable (I got one for free from my broadband provider) and VoD catch up services suddenly became ubiquitous.

Re:I'm not an anti sharing nazi...

[Sockatume]

I kind of skipped through mentioning it, but for some movies they actually make DVDs and Blu-Rays for critics to view before the film makes it into the theatre. (In case they can't make it to a press screening.) Those sometimes mysteriously wind up on file-sharing sites, so they started watermarking them so that individual copies could be identified later. Although for all I know the practice has stopped by now.

Re:I'm not an anti sharing nazi...

[kamapuaa]

No they don't. That was sort-of true 3 years ago. Pirated content of current releases is from camcorder recordings. For instance that's all that's available for Transformers. Picture quality is generally shit. This still from the top-rated download may look OK, but in reality as a movie I find them pretty much unwatchable. And that's better than most camcorder recordings -Transformers was very popular around the world, and has been out for a while already, so better camcorder recordings are available.

Yeah I'm able to believe bootlegs are a slight positive, because anybody who wants to see the actual thing enough to suffer through a low-quality bootleg is going to want to go and see the movie in a theater.

Of course where bootlegs hurt the studios is in Blu-Ray recordings, where easily-available, free, high quality versions of the movie compete with the same thing that is not free. There is no economic method for not-free to compete with free. Just legal threats and an appeal to morals.

One exception is after the Oscar nominations in February or so, where review screeners are bootlegged, and some art movies may still be playing in the theaters.

Re:Lies, damn lies.

[Jason Levine]

Hollywood Accounting: "That mega-popular movie that broke box office records actually didn't make any money. In fact, it lost a ton of cash." (Translation: "We want to pay the people who worked on the movie as little as possible so we're grouping unrelated costs into that movie's budget to fake a loss.")

Hollywood Accountability: "The reason that movie tanked was because dirty, rotten Internet pirates stole it rather than watch it in theaters or buy the Blu-Ray/DVD!" (Translation: "It was an idiotic movie with no plot, bad acting, and special effects added in a vain attempt to improve the final work. People decided they'd rather light their limited entertainment dollars on fire than see this stinking pile of garbage. Still, we someone to blame who isn't us so... INTERNET PIRATES!")