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Uncategorized Friday, February 10th 2012 at 11:53 am

Study Shows That BitTorrent Piracy Doesn’t Affect U.S. Box Office Profits

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Ever since what seems like the beginning of time, or at least the beginning of widespread digital piracy, groups like the RIAA and MPAA have been projecting their losses by assuming that every illegal download was actually a legitimate purchase lost. While the problems behind that logic may be clear to you or me, the fallacy persists in a lot of anti-piracy arguments. A new study, Reel Piracy: The Effect of Online Film Piracy on International Box Office Sales, has shown that BitTorrent has not had any actual effect on U.S. box office earnings and that a large percentage of losses due to piracy abroad may, in fact, be the movie industry’s own fault.

According to the study, the factor with the largest impact on piracy is the delay between U.S. and international releases of films. Because of the delay in international releases, often the only way to get a film may be to pirate or wait. Given that choice, anyone who doesn’t want to wait has to turn to piracy whereas if a legitimate venue of purchase was available, at least some of that revenue could be retained.  The study estimates that if this pre-release piracy binge were eliminated — by releasing earlier, or simultaneously with the U.S. — overall losses could be reduced by 7%.

Furthermore, the study finds that the rise of BitTorrent has had no material impact on the U.S. box office revenue; U.S. box office revenue has not noticeably decreased. Considering the fact that international piracy seems to be caused primarily by unavailability, this would make sense; in the U.S., there is always a legal option at the get go. So how can all this piracy be happening, but not affecting revenue? Consider one of the oft neglected laws of piracy: Lots of people will only be interested in your stuff if it’s free.

Here’s a little cobbled-together, circumstantial evidence to back this up. Are you surprised to hear that Pirates of the Caribbean: At World’s End is the 10th top torrented movie of all time? Or that Green Lantern and Fast and Furious 5 took home numbers 15 and 25 (respectively) on the top searches of 2011 at a top-five torrent site? Why are these mediocre films hitting so high? Because they’re the kind of movies a lot people will watch only if they’re free.

Now none of this is to say that piracy still isn’t an issue of some sort, but rather it’s to say that it may not be as big a deal as the MPAA and RIAA would have you believe. Beyond that, the study’s real contribution is that it supports the idea that piracy is less a legal problem and more of a distribution problem. Maybe instead of making piracy harder (difficult, probably impossible) the movie industry should be focusing on making legitimate copies of films easier to buy and maybe better than the pirated versions somehow (less difficult).

(via TorrentFreak)

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  • http://www.liveforfilms.com Phil Edwards

    It’s what many of us have always thought. Getting films from Torrent sites doesn’t effect the box office. If anything if people watch a dodgy copy they downloaded and enjoyed it they may well go to the cinema and see it 

  • IndustryShill

     Nope. If you download $4 million worth of movies that is a $5 million loss to the movie industry. If you hadn’t downloaded those movies, it is guaranteed that you would have legitimately purchased all of them and then pressured your friends into buying some of them as well (typically 25% or $1 million in this case). Comments and articles like this just want to hide the fact that piracy is responsible for a 5000% loss in profits to the industry. The reason most movies never make a net profit is not because it’s some “crazy” tax dodge. It’s because after paying the actors, gaffers, wardrobe staff, lot fees, etc. there is no money left over to pay the producers, director(s), or any of the higher ups involved in the movie. It is a tragedy and you people are thieves!

  • http://www.liveforfilms.com Phil Edwards

    But what if you had no intention of going to see the movie. If you had no access to download it then you would never see it and that would be the end of it. 

    Yet you may go “Hey, I had no intention of going to see this but it is on my favourite torrent site,” You watch it and it is a lot better than you thought so you tell all your friends to go and see it at the cinema to really appreciate it or you buy it when it comes out on Blu-ray.

    Plus the big thing here is the whole share thing. If you buy a movie on blu or DVD you can pass it round to your friends to watch and they may never buy it. Same with music. 

    The main reason lots of movies don’t make any money is because they are either rubbish or they spend too much on the marketing when there are so many cheaper ways of doing it.

    I totally agree with the bit in the article that mentions different release dates. If they released films in the main markets at the same time you would cut down on a huge amount of pirating as consumers are very impatient.

    Another thing they should try is lowering the price of cinema tickets. That puts so many people off going to the flicks. If they lowered the prices more people would go and more money would be made.

  • http://www.liveforfilms.com Phil Edwards

    Oh and 
    Pirates of the Caribbean: At World’s End is one of the main torrented movies and still made worldwide$963,420,425 

  • Jesper

    Phil – Try read his comment again ;)

  • verybored

    Try reading his name dude. :P

  • jerv

    Sometimes sarcasm and dry humor don’t translate well to text.

  • Anonymous

    Who gives a crap. They make enough money already, where does it go, who bloody knows. 

    I dont download illegal material because i dont watch movies and play games. I read books and eat but i know for sure that if i could illegally download or create food i would because the prices of bloody lamb has gone up and you get a small slither of meat. 

  • http://www.facebook.com/charles.rady Charles Rady

    welllllll as long as they keep re-making batman and spiderman over and over again I think they SHOULD be free! I mean, come on! I have already seen ‘em when you released them in 98, 200, 2001, 2003, 2005, 2007 and so on and so forth. I’ll go to the theatre for something new and exciting not something that sports CGI as the only difference (sometimes the live action models were better)     Maybe it is the industries fault. It is definitely their fault that we keep getting the same sh*t over and over. They even remade footloose lol -where was the brain behind that one! They gonna CGI some Kevin Bacon?!?!?!?!

  • #Cinelover

    I agree that distribution (and exhibition) practices need work, but that is in no way a justification for piracy. We’ve become a society of self-entitled brats and we all need a reality check. A lot of people put a lot of work into making films and to think anyone has the right to steal the product is criminal and ignorant.

    You say that the box office sales not decreasing is proof that piracy is not affecting the box office. With that logic I would say that the box office sales not INCREASING is proof that piracy is affecting box office sales. And what about DVD sales? Netflix? Redbox? Blockbuster?… 

  • http://www.facebook.com/therealleighscott Leigh Scott

    Studies also show that shoplifting at retail outlets has little impact on the sales of those chains either.  People who shoplift probably weren’t going to buy those things anyway.  The same study says that if retail chains simply made their products cheaper (moving the price point slightly below the actual cost of production) that there would be less shoplifting in general.  Overall, shoplifting would be down if prices for things were lower and if retailers created more outlets, making it easier for the shoplifters to obtain the goods legally.  This study should make us consider the shoplifting and theft laws, as well as their punishments, given the statistical data.

    Also, I’m pretty sure that the film industry has claimed that piracy has hurt their ancillary sales (DVD, Blu Ray, legal downloads etc.) and NOT the theatrical box office.  So, it’s cute and clever and an excellent disinformation campaign to analyze  the impact of piracy on box office.  Let’s take a look at those DVD sales shall we?

    Can’t we all agree that laws like SOPA are bad because government sucks and would get out of hand with it (like they do everything)?  But why is there some push to legitimize theft?  That weakens the argument and makes me feel sad for future generations.

  • Ronnie

    I’ve always wondered if piracy were so “damaging” to the industry, why do certain films (although equally pirated) make a crap-load of money at the box-office (such as
    The Twilight Saga, Harry Potter, Pirates of the Caribbean, etc.)? In terms of music, u  can look to Good Cd’s like “Adele 21″.   Fact is, while there’s somewhat of a problem, it is NOTHING like these industry guys want to brain-wash us with!  If your
    films suck, no one is going to pay $60 bucks on a movie date (let alone with kids) to
    see something that isn’t worth the money!    When the product is good, the numbers  rise & the money is there…….regardless of who uses a bittorrent!

  • johnfilmsia

    Valve has been saying this for years about gaming piracy: Quality and availability are what drive people to legitimately acquire something.
    If the product is poor and hard to get, why waste the money and time? That’s why so much piracy is international.

  • Asreal

    Well said!

    Plus there is also the latest re-re-re-re-re-release of Starwars with George Lucas himself farting in the commentary to look forward to so he can milk the franchise a little more…

  • Lakanal

    “the RIAA and MPAA have been projecting their losses by assuming that every illegal download was actually a legitimate purchase lost”

    Why do anti-copyright people say this? It just isn’t so.