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Heresy: Piracy is good for you!

December 3, 2012

So, an academic study has suggested that the closure of Megaupload may have harmed legitimate box office takings for some movies. To some this kind of declaration is the media equivalent of being a climate change ‘denier’.

I have said here before that the phalanx of content rights representation bodies – there are many of them – do themselves no favours with their, sometimes, incredible claims for the amount of money being lost by their members to piracy. 1. They can’t possibly tell with any accuracy how many of any particular piece of content has been stolen. 2. They assume that every piece of content stolen would otherwise have been bought at the full retail price and use this calculation to come up with their multi-billion ‘losses’.

What researchers at the Munich School of Management and Copenhagen Business School found was that while it is true the original theft may theoretically deny revenue to the owner – if you assume the thief would have bought the item – that theft may also add to the ‘social media effect’ giving the movie wider exposure and – so long as it was widely distributed legitimately – driving more customers to the box office.

They describe the finding as ‘counterintuitive,’ but say the evidence suggests the social network effects of file-sharing acts as a mechanism to spread information about a good film from consumers with zero or low willingness to pay to users with high willingness to pay.

Why did Quantum of Solace do very badly at the box office while Skyfall is doing extremely well? You can be sure that at the time the studio would have mixed piracy liberally into its cook-up of excuses. For sure QoS (what an ironic acronym in this case), was pirated, and the social network vibe spreading as a result was the accurate up sum that it was pants. Sky Fall was also pirated and the vibe was it is brilliant. And then it did record box office business.

Studios spend millions trying to create a buzz – a positive one that is – about their films. But no matter how effective their buzz buck bang, if the film is a turkey it will flop. The P2P to social network buzz is probably more accurate and, therefore, a better predictor of success. Some day some studio will probably hit on the idea of leaking the film to pirates as a cheaper form of marketing….

Anarchy? Maybe. But they are on to something, and it certainly gives the lie to the idea that all those mediocre and plain bad films that make their illicit way across the murky side of the Internet, mostly unwatched, would ever have been bought at full, or any other, price.






Categories: Blogs, Business, Content, Nick Snow, Piracy, Rights