Movie Piracy is Strongly Linked to Box Office Revenue

Over the past 18 years, we’ve seen our fair share of piracy studies and research, but a finding presented this week ‘obviously’ stands out.

 

Piracy research firm MUSO looked into the link between movie piracy volume and box office revenues.

 

With piracy data on hundreds of films, the UK firm sits on a research goldmine. The company decided to put this to work by calculating the correlation between movie piracy and box office attendance.

Piracy vs. Box Office Demand

MUSO predicted that the demand for films through legal and illegal channels might be similar. Put differently, the demand for films at the box office follows the interest in these titles on pirate sites, especially when they have just been released.

 

Indeed, the data didn’t disappoint; that is exactly what the research found.

 

The research compares the daily piracy numbers of 98 film releases with their official revenues at the box office. This data sample includes popular films such as “The Lion King” (2019), “Shang-Chi and the Legend of the Ten Rings” (2021) and “Spider-man: No Way Home” (2021).

 

Consumption of both legal and pirate versions was measured starting on the day of their respective releases until the film was no longer in theater or when a VOD version came out.

Strong Correlation

The results reveal that both authorized and unauthorized demand follow a similar pattern. Demand for films is greatest when they have just been released, and interest typically drops off after that, with occasional peaks during weekends.

 

With a Spearman’s Rank Correlation Coefficient of 0.85, the connection between pirate and box office demand is quite strong. According to MUSO, one can be used as a proxy for the other.

 

“[T]here is a very strong, statistically significant, positive correlation between Box Office revenue and unlicensed consumption. Therefore unlicensed consumption data can be used as a proxy for Box Office data and vice versa,” MUSO writes.

 

 

This overall conclusion makes sense. New releases tend to be most popular, both at the box office and on pirate sites. It isn’t exactly an earth-shattering finding but does this research actually show that piracy is a good proxy for legal consumption and vice versa?

Questions Remain

It’s important to note that correlation is not causation; here it shows is that both types of consumption follow a similar pattern. The correlation may simply show that there’s a higher demand for something just after it’s released. That same logic might apply to book sales too.

 

Secondly, it’s worth highlighting that this particular correlation test is a rank comparison, which means that the magnitude of the changes may be quite different between piracy volume and box-office revenue. That doesn’t make it an ideal proxy measurement.

 

Finally, it’s worth stressing that the researchers compared the (ranked) total piracy volume vs. the total box office revenue for all films combined. This means that popular films will have a much higher effect on the correlation.

 

Summarizing the data for all films means a lot of information gets lost. Even if there’s no correlation at all for some smaller titles, that could get lost in the pile of data.

 

It would be interesting to see a follow-up analysis to see if there are different patterns for some films, to gain additional insights. There could be specific conditions where piracy volume is less, or even negatively correlated with box office revenues. That could be interesting to learn from.

 

All in all, however, the overall conclusions make sense. People’s interest in new releases typically peaks early and drops off after that. Similarly, films that are popular at the box office tend to do well on pirate sites, and the other way around.

 

MUSO will likely cite the finding to help rightsholders use piracy data to their advantage. MUSO can show movie companies that if a title does well on pirate sites in a specific region, they better make sure that it’s available legally as well.