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Movie piracy caused by foreign availability and premiere schedule, study shows

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A new study suggests that people who pirate Hollywood movies at the expense of paying to see them in theaters only do so when the movie’s not available in their country.

That’s not to say, of course, that people don’t illegally download movies in droves. But piracy only coincides with significant box office losses in countries outside the U.S., where Hollywood movies premiere first. And the longer the delay before a given country gets a movie’s premiere,  the greater the losses due to piracy. As a result, the study finds, Hollywood loses about 7% of its potential foreign revenue.

A joint effort between researchers at Wellesley College and the University of Minnesota, the study looks at two major variables: What’s the staggered timetable of movie premieres as they slowly spread across the world? And how do box office sales of action and science fiction films—the most commonly pirated genres—compare before and after BitTorrent became widely used to pirate movies?

“We find that the longer the lag between the US release and the local foreign release, the lower the local foreign box office receipts. Importantly, this relationship is larger after widespread adoption of BitTorrent than before.”

The study found that in 2003-04, immediately before BitTorrent’s prevalence, a country where a movie premiere was delayed until eight weeks after it opened in the U.S. could expect to lose 22% in revenue from the delay alone. In 2005-06, that number jumped to 40%.

Though it seems an obvious solution would be for Hollywood to adopt a model of premiering movies simultaneously worldwide, there are a few hindrances with that: Digital cinemas are still rare, and physical prints of movies cost between $750 and $1200. Staggered releases coincide with prints being shipped from one country to another. Moreover, common wisdom in the industry is that stars should fly from country to country as movies are released to promote their films.

“We do not see much evidence that piracy displaces US box office sales,” it adds.

Upon their official U.S. release, pirated movies are “available to US consumers in the theater at this time but not to consumers abroad.” This indicates “consumers in the US who would choose between the box office and piracy choose the box office...[but] international consumers who would consider both options choose piracy due to a lack of legal availability.”

This is consistent with a 2010 study that found users were much more likely to pirate TV shows if there were no legal ways to watch them.

Photo by fuzzcat