Pirates of the Caribbean

It’s generally accepted as fact that online piracy is bad for the movie business. Each illegal download means, theoretically, one fewer ticket or DVD sold, which means the cast, crew, and everyone else involved is being cheated out of fair pay for their hard work.

Except, according to one recent study, that conventional logic may actually only apply to blockbusters. The authors conclude that for smaller films, piracy is actually beneficial, likely because more pirates watching means more pirates spreading buzz.

Not surprisingly, this finding doesn’t sit well with everyone in the business. The Motion Picture Association of America has now responded with a dismissal, insisting that the study’s results “aren’t entirely clear” and are based on “total speculation.” Hit the jump to read both sides of the argument.

First, the study. Researchers at the Munich School of Management and the Copenhagen Business School recently published a paper examining the aftereffects of Megaupload‘s shutdown last year, based on the box office revenues of 10,272 films in 50 countries between 2007 and 2013.

They found that while major studio films like The Hobbit: An Unexpected JourneyThe AvengersIce Age: Dawn of the Dinosaurs, and Harry Potter and the Half-Blood Prince did indeed benefit from the closure of Megaupload, mid-range pics were hurt by it.

The authors theorized that the negative effect had to do with “social network effects.” Basically, they suggest, online pirates talk about the movies they see, which helps build awareness of “smaller films” with correspondingly more limited marketing campaigns. If illegal downloads are taken out of the picture, those pirates don’t watch the movie and therefore don’t share information about the film.

However, the MPAA begs to differ. “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,” said a spokesperson. ”Unfortunately, the findings in the study aren’t entirely clear and the authors’ speculation about the results and why they arrived at those results is just that – total speculation.”

Moreover, the organization argues, the study isn’t clear about the distinction between “blockbusters” and other films, and “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.”

The specific effects of piracy are tough to tease out because, as the MPAA points out, it doesn’t exist in a vacuum. It’s tied to other cultural, technological, or economic trends that also impact box office revenues. Which is to say that neither the Munich and Copenhagen findings nor the MPAA’s response is the final word.

On a personal level, I’ve witnessed incidents that’d prove both sides right. I’ve seen friends download movies to avoid paying for them at the theater; I’ve also seen people obtain a movie illegally only to like it so much that they tell others about it or even shell out for a legal copy later on. What do you make of the ongoing debate over piracy?

[Sources: DeadlineVariety]

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