Study: Online Piracy Doesn’t Hurt U.S. Box Office Returns, But Foreign Release Delays May Harm International Receipts
Posted on Wednesday, February 15th, 2012 by Angie Han
For the past several years, the movie industry has been up in arms about online piracy and its potential to harm box office returns. It’s not a totally unreasonable fear; given the choice between shelling out $12.50 for a ticket to the latest middling sci-fi blockbuster sequel and downloading it for free online, it’s easy to imagine plenty of people going with the latter. However, a new study suggests that piracy doesn’t actually have an effect on the U.S. box office. Piracy may, however, take a toll in international markets, especially if there’s a long delay between the U.S. theatrical release and the international one. More details after the jump.
Researchers at Wellesley College and the University of Minnesota examined the U.S. box office receipts before and after the introduction of BitTorrent in 2003, and found no evidence that piracy displaced domestic sales. It seems that American movie fans still love going to the theater as much as they ever did, and that those who are pirating a film online may never have been inclined to pony up for a trip to the theater to begin with.
The same was apparently not true of the international market. Foreign box office returns were found to be 7% lower after BitTorrent’s adoption, with declines in box office correlating with international release lags. In other words, the longer the period between a film’s U.S. release and its release in a given country, the more likely residents of that country were to illegally download the picture instead of buying a ticket when it eventually hit their homeland.
Again, this makes a fair amount of sense. In the days surrounding a movie’s release in the U.S., its availability on BitTorrent and other illegal online channels skyrockets. Meanwhile, folks abroad are reading Internet reviews and seeing clips for a film they won’t be able to access legally for weeks or months. The example Boing Boing (via Mashable) offers up is The Muppets, which hit American cinemas in November to glowing reviews, but was only just released in the U.K.
The finding about international box office returns seems especially relevant given the increasing importance of the international market in Hollywood. Even if a movie flops domestically, it can still turn a tidy profit if it does well overseas — and tidier still, apparently, if studios don’t wait so long to open it internationally. Closing the gap between domestic and international releases won’t solve all of the film industry’s problems, of course, but it seems like a much easier and more rational step than, say, introducing drastic and misguided laws.