New Study Documents Relationship Between Ticket Sales, Movie Piracy - HotHardware
New Study Documents Relationship Between Ticket Sales, Movie Piracy

New Study Documents Relationship Between Ticket Sales, Movie Piracy

The impact of piracy on the music business has been studied in detail, but the relationship between illegal downloads and film revenue hasn't been explored to nearly the same degree. A new study from researchers at the University of Michigan and Wellesely College has examined the impact of BitTorrent on domestic and foreign ticket sales and come back with some interesting conclusions.

The results of the study are being somewhat erroneously reported as "Piracy doesn't hurt the movie industry" but the truth is rather more nuanced. What the researchers found was that in the US, the drop-off in movie revenue from week to week for the period 2003-2006 remained consistent. In theory, the widespread availability of BT seeds would directly impact ticket sales with an increasing amount of film revenue deriving from the few days before high-quality seeds were widely available.


Whoops. Not related to these pirates

What the team did find is evidence that foreign box office sales are impacted by piracy, with foreign earnings falling an average of 1.3 percent for every week that a studio delays releasing a movie. This varies somewhat depending on the genre; science fiction and action movies are pirated more heavily than romances. Studios have responded to this trend by shortening the window between a film's domestic and foreign release; the overall impact of BitTorrent on foreign film earnings is estimated at seven percent.

The Big, Important Question This Study Doesn't Cover

The key point that a number of other sites have missed is that this study only focused on box office sales -- and those make up an increasingly small percentage of a movie's revenue. From page 5:  "In 2004, the year after BitTorrent's release, studios grossed 45 billion US dollars worldwide, up from 32 billion in 2000 and 8.5 billion in 1980 (all in 2004 US dollars)... Box office receipts accounted for over half of studio revenues in 1980, but only 17% of revenues in 2004.

In other words, in 1980, studios made ~$4.3 billion from box office sales. In 2004, they made $7.65 billion; an increase of just 78 percent in 24 years. Over the same time period, the US population grew by more than 25%, while median family income rose by ~15%, both of which would naturally boost ticket sales. The meteoric growth in movie industry revenues, in other words, was driven by the advent of movie sales and rentals.  That doesn't mean box office revenues are unimportant, but they're a small percentage of the total.

There are two additional reasons why ticket sales may be a poor predictor of piracy's impact. First, while widescreen TVs and surround sound systems have cut into the "experience" of going to a movie, there remains a qualitative difference between seeing a film on a 60-inch screen and seeing one on a 60-foot screen. Second, there's the fact that the majority of screen-capped movies available for download are lousy. High-quality cameras allow for better visuals, but there's no way to fix degraded audio and the ambient noise of the theater itself.


Even good TS films tend to suffer from washed out colors, loss of detail, and incorrect aspect ratios

So-called "TS" (telesync) versions of bootlegged films are invariably lower-quality than DVD rips, much less Blu-ray, and while there are users who will watch them regardless, the data collected here confirms that the theater "experience" is relatively well-guarded. The problem, in this case, is that box office tickets are only a fraction of industry income.

As the researchers note, there's no credible data showing that piracy replaces movie sales at a 1:1 ratio for any medium, while considerable evidence suggests that making content legally available has a direct impact on decreasing piracy. Downloading movies in lieu of buying physical discs does have a negative impact on studio revenue, but the size and nature of that impact are considerably less than Hollywood claims. Broad legal availability is still the key to reducing overall theft.
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lol..maybe if the movies were better people would actually buy them...and blu-ray players still suck, long load times..most make a lot of noise...i have all the lord of the rings movies, harry potters, inception, 8 mile..bourne movies..but why would i pay for all these not that great movies that are 1 hour 30 mins long. its not like i keep the movies i download, i watch them once, delete them. if it is decent, i might buy it...but most aren't worth watching again. just like video games these days, one play through...boring..not worth buying it. i don't even go to theaters anymore either cause it cost too much mainly cause all of this lame ass "3D" bullshit..movies are good without the 3d...3d might be nice if it didn't require glasses and twice the $$$ to watch it at a theater.

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better question is how many of those people who pirated the movie would have actually gone to see the movie? My guess is not many, so how can a sale be lost if it was never going to happen in the first place? 

 

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Rupert Murdock may "not care" for people downloading movies for free, but what is truly happening right now is the democratization of information. Anyone who watched cable TV from the mid 80's or early 90's to today's knows that we're being screwed up big time. There where almost no commercials on cable TV in the early days, that's why people paid for it. It was either six or ten movie channels and a few sports, some "adults" with no extra charge and that was it. There were no adds like today. Today's cable companies are double dipping, charging people for subscriptions, internet and phone AND making extra revenue on massive advertising. There is basically no difference from paid TV or the normal one aired. They all have commercials. They threw the first stone. I say let the little man have it. It doesn't matter if it is movies, music or audio books (or even books, if you can bother reading them). What matters today is that the poor guy in a third world country (or as we politely call it today, a "developing Country") with no movie theaters, who has no chance of affording to buy a copy of anything and no spare money to buy any entertainment can actually (for the first time in human history) share that experience, to a lesser extent. The internet made every human being either a thief or a pervert. We better start getting used to the idea of sharing everything.

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ATigre:
The internet made every human being either a thief or a pervert.

Speak for yourself.

BluRay quality is very good, but it's not really necessary for me to enjoy a movie. HD DVD quality is good enough for me most of the time.

I use NetFlix streaming,....and I wait for Movies to ~age a little~ before I buy them for next to nothing at places like WalMart. ($5.00 each for many of them) The Studios shouldn't complain, heck I see about one or two movies in the theaters every few years,.......

They still make a crapload of money and they lie if they say they don't.

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Realneil,

You're actually the studios' worst nightmare. :P

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Joel H:

Realneil,

You're actually the studios' worst nightmare. :P

I'll get over it,.......Smile

 

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Movie studios actually do pretty well off of me. I will make it a point to go see a movie in the theater for just the reason Joel pointed out, you can't beat the big screen. Yet.

I do have a surround sound system at home that I enjoy watching movies on and will rent and/ or buy movies as I see fit. It is too expensive to see every movie in the theater, so I save that for movies I'm really excited to see, like the upcoming Hobbit.

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One thing that can't be beat is the experience of seeing a movie in a theater; just the big screen and the surround sound blasting all around you. It's truly an amazing experience if there's a movie that's worth it to see in the theater, if there isn't then eh. A big reason that people don't go to the theaters is because of the movies that are being released today; I mean alot of these movies either rate meidocre, terrible or overrated and really, the purpose of going to the cinema is to entertain ourselves and watch situations unfold before our very eyes; while people may see this, I feel that if it isn't worth it for me to go in and see the movie then they're not getting my money. I don't mind paying the money (even 3D) if the movie is good but if it isn't them well; eh.

It's not piracy that's killing the movie industry, it's the companies, the movies and the pricing that is killing it. I would see more meidocre films if the price lower but as it is, if a film isn't a must-see, they're not getting my money.

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The experience of seeing a movie in the theater. For me that means pot smoke all over the place, small children running around during the movie even during R rated flicks shown after 9pm, actual graffiti on the screen usually in permanent marker (and when the theater pays to get it cleaned off the screen you can see the faint outline of the graffiti forever in the lower portion of the screen).

 

 

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Holy crap where do you live?? Admittedly the theater closest to my house is kinda crappy, but there's one about 20 minutes away that seems like everybody in Cincinnati treats as hallowed ground. It's always in good shape and the crowd's always been great. I think that has a lot to do with it. If the theater owners show that they care, the audience is likely to be more respectful as well.

At the same time, I usually prefer paying $20 for a blu ray version of a movie for my 52" tv. But there are also some movies that are just better with a crowd, like comedy movies or nerdy scifi/fantasy.

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sackyhack:

Holy crap where do you live?? Admittedly the theater closest to my house is kinda crappy, but there's one about 20 minutes away that seems like everybody in Cincinnati treats as hallowed ground. It's always in good shape and the crowd's always been great. I think that has a lot to do with it. If the theater owners show that they care, the audience is likely to be more respectful as well.

At the same time, I usually prefer paying $20 for a blu ray version of a movie for my 52" tv. But there are also some movies that are just better with a crowd, like comedy movies or nerdy scifi/fantasy.

 

Queens / Brooklyn border, the closest theater is one of those Magic Johnson owned National Amusements theaters where you need to go through metal detectors just to get in. I often travel a fair distance so i can go to a decent theater. Too be honest I have had my house on the market for 2+ years.

 

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digitaldd:

The experience of seeing a movie in the theater. For me that means pot smoke all over the place, small children running around during the movie even during R rated flicks shown after 9pm, actual graffiti on the screen usually in permanent marker (and when the theater pays to get it cleaned off the screen you can see the faint outline of the graffiti forever in the lower portion of the screen).

Wow; the area you live in in New York must be bad enough to have a bad poorly maintained local theater. The theaters here are clean cut and have patrol guards where you'd least expect them. I'm guessing the theater experience depends on which theater you visit; the big chains do have better quality then your local theater but the experience is different (as in a lack of identity from theater to theater.) so I guess there's pros and cons to each option.

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