Study suggest piracy might be good for indies, bad for blockbusters

The-Avengers.jpg

Image Credit: Marvel Studios/Paramount

Piracy is bad for the film business, right?

It might not be that simple. According to a recently updated study, it depends on what kind of movie you’re talking about. Looking at box office and digital download sales since the January 2012 closure of the popular digital sharing site Megaupload, researchers based in Copenhagen and Munich found that while blockbusters like The Avengers saw increased profits at the box office, mid-range and independent films were negatively impacted.

With indies and mid-range movies, the study suggests that when people have a positive experience watching a pirated movie, they’ll tell their friends about it who may be inclined to seek it out for themselves and pay for it. In the absence of a free option, those early adopters won’t go out and rent or buy the movie, they simply won’t watch it. The theory is, then, that not only are you losing the illegal downloaders, you’re losing their (potentially paying) network as well.

The blockbuster is the exception for obvious reasons. Awareness usually isn’t the problem with big budget tentpole projects, and the study calls out movies including The Avengers and the final installment of the Harry Potter franchise as proof positive that their box office profits benefitted from Megaupload’s closure.

The MPAA doesn’t agree with the study’s methodology and speculative conclusions, and issued the following statement.

An independent review of the academic research available has shown that the vast majority of research available in fact does show that piracy does harm sales.  And a recent study from Carnegie Mellon University found that digital sales in countries where Megaupload was popular increased after Megaupload shut down.  And in fact, the Munich and Copenhagen paper also finds that box office increased after Megaupload shutdown for an important segment of titles that they don’t clearly define, although it’s hard from the study’s descriptions to determine exactly what the control and treatment sample groups are, among other key factors.  Unfortunately, in order to reach its conclusion, the Munich and Copenhagen study also all but ignores a critical piece of the box office picture – how timing or other factors that are completely unrelated to Megaupload impact the box office performance of small, medium or large films.

EW contacted a number of distributors for comment, but has yet to hear back.

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