Movie Piracy Not Harmful To Hollywood, Claims In-Depth New Study

Movie piracy is not as big of a deal as Hollywood would like for you to believe.

That’s the finding of a new study that looked at file-sharing sites and compared them to box office revenue for 150 blockbuster movies that were released over a period of seven years, BGR‘s Chris Smith reports.

While Hollywood has long claimed that movie piracy has a significant effect on its bottom line, the author of the study, Koleman Strumpf, actually found the contrary.

From 2003 to 2009, Strumpf notes, the evidence in favor of Hollywood’s claims is very little.

“My best guess estimate is that file sharing reduced the first month box office by $200 million over 2003-2009, which is only three-tenths of a percent of what movies actually earned. I am unable to reject the hypothesis that there is no impact at all of file-sharing on revenues.”

Still, Strumpf concludes, “There is no evidence in my empirical results of file-sharing having a significant impact on theatrical revenue.”

More from the BGR report:

[Strumpf] looked at data from 150 blockbuster movies that were released over a period of seven years and, and drew data from a popular BitTorrent tracker as well as revenue projections from the Hollywood Stock Exchange…. Furthermore, the researcher found that movies that hit file-sharing sites shortly before theatrical openings have a positive effect on box office revenue…. At the same time, delaying the file-sharing arrival for a movie would also lead to higher revenues.

In Strumpf’s own words, the reason that an advance file-sharing release helping box office revenue happens because “such releases create greater awareness of the film.”

“This is also the period of heaviest advertising,” he adds.

As for the benefit of a later delay, Strumpf illustrates: “For example, suppose studios added extra security to big budget movies which then have a delayed arrival to file-sharing networks. Then even if file-sharing has no impact at all, one would find that delayed arrival on file-sharing leads to higher revenues.”

One thing that Smith points out that is worth mentioning: the MPAA spent $500 million during the same time period of the study on anti-piracy campaigning.

Had they just let movie piracy do its thing, they would have been “out” less than $30 million per year as opposed to the $100 million per year it cost them to pursue the fruitless advertising. Even at a $100 million loss per year, though, that’s pretty small potatoes considering any provable loss would come from the collective take of all summer blockbusters during that time.

Small movies, as people like Harvey Weinstein would have you to believe, are unaffected.

Do you think movie piracy hurts box office? Share your thoughts in our comments section.

[Image via ShutterStock]