Megaupload Shutdown Hurt Box Office Revenues

[nsane.forums]

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.

View: Original Article

[calguyhunk]

Maybe I'm dumb but I just don't get it. If I buy a CD/DVD, am I or am I not allowed to give it to my friend to listen/watch? If yes, then why can I not do that with digital copies of it? I can share physical media but not digital ones? :o

The problem should be if my acquisition of it itself is illegal (like cam/TS etc.) or if the product itself is illegal (like terrorist propaganda/child porn etc.). But If I were to buy a DVD from Sony (say) at their inflated prices and decide to share it with my friends on FB or any other site, why should the law in any free, democratic non-dictatorial nation object to that? :dunno:

Also, it should be illegal for me to sell copies of it for profit, but unselfish bordering-on-altruistic ripping, uploading and seeding! How can that possibly be wrong? Seriously! :angry:

[bidulet]

19h January 2013 will be a memorial day, the day where the MAFIAA has closed Megaupload and the day where Mega will reborn unbreakable like Chuck Norris and the MAFIAA will regret having done this shit, they will lose what they believed won. (2.6 billions for damages on Megaupload business said Kim Dotcom, I <3333333)

The MAFIAA has just managed to lose the confidence of legal consumers :D They taken more than a shot in the foot by making this mistake.

[Ambrocious]

Piracy has a symbiotic relationship with the Entertainment Industries which include:

* Helping promote the film via fans and intellectual pleasure

* Proving that their Entertainment is premium and is top quality

* Encouraging the minds of all who watch to be inspired and possibly creative

* It is a public service to those who live life as it is increasingly getting worse

Many more things could go on that list but my point is just this: The major entertainment industries need to make their system of Entertainment protection into a reward system, not a punishment system. Get people to download your movies/music/software for free and make your name worth billions of dollars in the heart of people. What I'm saying here is that all of these Entertainment systems need to take notes on how Facebook stays wealthy.

* Punishment system inspires hatred to the Entertainment Industries and global displeasure with slight fear. Punishment systems encourages rebellion and the feeling of "being bad" and creates a reflexive survival which can trigger primal systems to activate (fight or flight) and always be on standby in our forefront mind. When people share under the knowledge that they can be "caught and punished" they develop a deep seated anger for the Industries knowing that as an individual, the entertainment is great but as an organization, they are darkened. This implies that those who create the films are the masters, not the lawyers or others with wealth above them in rank.

* Reward systems gather larger quantities of money due to their family friendly environment, game provisions, communication standards such as instant messaging and private message systems (like I said, like Facebook does and still stays free). You become richer faster in a far less time, plus you are cherished and loved by almost all people.

[myidisbb]

Maybe I'm dumb but I just don't get it. If I buy a CD/DVD, am I or am I not allowed to give it to my friend to listen/watch? If yes, then why can I not do that with digital copies of it? I can share physical media but not digital ones? :o

The problem should be if my acquisition of it itself is illegal (like cam/TS etc.) or if the product itself is illegal (like terrorist propaganda/child porn etc.). But If I were to buy a DVD from Sony (say) at their inflated prices and decide to share it with my friends on FB or any other site, why should the law in any free, democratic non-dictatorial nation object to that? :dunno:

Also, it should be illegal for me to sell copies of it for profit, but unselfish bordering-on-altruistic ripping, uploading and seeding! How can that possibly be wrong? Seriously! :angry:

its base on what country you live in. in the usa we have this illegal law called dmca. it bascially says anyting digital have a forever copyright holder protection. that you cant change its media format as in archiving or making a backup copy for yourself. and anything to lets you copy a digital piece is suppose to be illegal too. so when people where using black markers to mark the outter edge of sony's music cds with their illegal data on it there was a gropu that actually try to ban markers.

they have in the pass and still trying to get alway with making selling a psyical original piece that you paid for illegal or require a royalty fee for doing it. EA gaming company discide to make it so that used games require an online code to play the networks.

in the usa it is still illegal to upload copyright pieces but not to download them. we got another 4 years of this bastarder in the office over here, so its only going to get worst for everyone in the world.

[calguyhunk]

... and anything to lets you copy a digital piece is suppose to be illegal too. so when people where using black markers to mark the outter edge of sony's music cds with their illegal data on it there was a gropu that actually try to ban markers.

Yeah, remember that and the scotch tape fiasco as well. Maybe they should have sued the scotch tape makers as well :P