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Researchers Find Megaupload Shutdown Hurt Box Office Revenues 203

Posted by samzenpus from the free-preview dept.
An anonymous reader writes "We've heard this one before, over and over again: pirates are the biggest spenders. It therefore shouldn't surprise too many people to learn that shutting down Megaupload earlier this year had a negative effect on box office revenues. The latest finding comes from a paper titled: 'Piracy and Movie Revenues: Evidence from Megaupload.'"
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Researchers Find Megaupload Shutdown Hurt Box Office Revenues More

Researchers Find Megaupload Shutdown Hurt Box Office Revenues

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  • Shallow research (Score:5, Insightful)

    by suso ( 153703 ) * on Sunday November 25, 2012 @02:01PM (#42087971) Journal

    What movies did they use in their control group? I'm sorry but a 3 page paper with little details on the research is not enough to convince me that they can
    make any kind of valid conclusion.

    • Re:Shallow research (Score:5, Funny)

      by seepho ( 1959226 ) on Sunday November 25, 2012 @02:06PM (#42088023)
      But the conclusion is that piracy is awesome; we have to agree with it.

    • Re:Shallow research (Score:5, Interesting)

      by Trepidity ( 597 ) <delirium-slashdot@@@hackish...org> on Sunday November 25, 2012 @02:09PM (#42088055)

      In addition, they don't even claim their findings were statistically significant...

      • Re: (Score:2)

        by Reziac ( 43301 ) *

        However, combine a whole bunch of such insignificant influences, and perhaps you've got a significant total.

    • Re: (Score:2)

      by nzac ( 1822298 )

      Of course you can't get do it scientifically your population is your sample group and the movies are not the same as last year.
      The only way to look at these thing is just though the numbers.

      The other conclusion could be that movies were less desirable to see this year or that the avengers was so disable it effected other ticket sales.

      • Re: (Score:2, Insightful)

        by seepho ( 1959226 )
        I could write a paper that shows that the bacon shortage hype earlier this year affected box office revenues that would make exactly as much sense as this paper does. It reads like the only research tool the writer used was a thesaurus.
      • As the OP pointed out they claim a negative but INSIGNIFICANT effect, in other words the numbers say megaupload has no observable influence on box office sales.

      • Re: (Score:3)

        by Kergan ( 780543 )

        The other conclusion could be that movies were less desirable to see this year or that the avengers was so disable it effected other ticket sales.

        Ok, I'll bite this one...

        Who else boycotted movie theaters this year because the stuff that went out was absolute garbage? FFS, Hollywood, get your act together because this year was crap to no ends.

        Or then what movie did I miss? And no, I definitely won't take Avengers or Batman or James Bond for an answer. They were mediocre at best.

        • OK, I'll bite on this bite ...

          I didn't go and see Avengers in the cinema but would very much have liked to. Also want to go and see Bond. Feedback on both has been overwhelmingly positive, and having watched Avengers on blu-ray, I was not disappointed.

          I did go and see Cabin in the Woods (in a small independent cinema, no less), and enjoyed it immensely.

          Many people rated The Dark Knight Rises highly (although it's not my sort of film). The Hunger Games was equally quite popular.

          The Woman in Black.

          The Lorax

          Ti

        • Re: (Score:2)

          by moeinvt ( 851793 )

          "...what movie did I miss?"

          Looper
          Killer Joe
          Safety Not Guaranteed
          Savages
          The Thing

    • If you really wish to confirm the issue, try looking at box office records pre and post internet, or even the VCR. The numbers I've found are pretty impressive. In fact I would prefer more downloading, authorized or unauthorized, if it would keep the punks and their damn cell phones out of the theater.

      • If you really wish to confirm the issue, try looking at box office records pre and post internet, or even the VCR. The numbers I've found are pretty impressive.

        Adjusted for inflation, yes?

        • Which measure of inflation? Consumer inflation? Money supply inflation?

          Probably better to go with 'As a percent of disposable income,' or 'Films consumed (legally) per capita.'

          • The standard measure of inflation is the CPI, another common measure is PPI. The main difference between the two is one looks at retail prices the other looks at wholesale prices. Money supply is not a measure of inflation, it's just one possible cause of either deflation or inflation. Never heard of "consumer inflation". Having said that, your suggested measures do sound more appropriate.

    • Re:Shallow research (Score:4, Informative)

      by Ksevio ( 865461 ) on Sunday November 25, 2012 @02:28PM (#42088195) Homepage
      It looks like the control group was big name movies that people would go to see with friends no matter what happened on the Internet. I guess the theory is people will have heard of them so the social aspect of sharing movies online wouldn't affect them, but at the same time the people who share the movies and watch them either don't go to movies at all, or will still go to a big name movie with their friends.

    • Re: (Score:2)

      by Anonymous Coward

      Yeah, because it's all about LOC ("lines of code"), a metric which works *so* well,
      and compactness and efficiency must mean it's bad.

      If it can be said in 3 pages, it should be said in 3 pages. End of story.

      PROTIP: The longer a paper is, the more likely it is, that it’s complete bullshit.

      • Re:Shallow research (Score:4, Insightful)

        by TapeCutter ( 624760 ) on Monday November 26, 2012 @03:44AM (#42091841) Journal

        If it can be said in 3 pages, it should be said in 3 pages. End of story.

        Indeed! Einstein's famous 1905 paper was three pages long and had zero references.

        The longer a paper is, the more likely it is, that it’s complete bullshit.

        Reversing the "logic" does not make one jot of difference, judging the worth of a document by the number of words is just plain silly.

  • There is more to it. Or actually, less. (Score:5, Informative)

    by wvmarle ( 1070040 ) on Sunday November 25, 2012 @02:06PM (#42088021)

    The actual conclusion of the researchers was:

    We find that the shutdown had a negative, yet insignificant effect on box office revenues.

    (emphasis mine)

    So basically there was basically no effect either way on overall box office revenues. Blockbusters gained from the shutdown of megaupload (probably due to more people forced to go see it in the theatres as they couldn't download it any more), many smaller and less well known movies lost (probably due to less people being able to preview the movie, resulting in less word-of-mouth promotion of a movie).

    Interesting results anyway.

    • The fact that their results were insignificant means something different in statistics than it does in everyday speech. What it means is they are less than 95% certain their results were due to changes in the independent variable (Megaupload being shutdown or not) rather than chance.

      Typically this means you can't make any conclusion about the strength or direction of the correlation.

    • incorrect quote (Score:5, Informative)

      by almechist ( 1366403 ) on Sunday November 25, 2012 @03:11PM (#42088431)

      The actual conclusion of the researchers was:

      We find that the shutdown had a negative, yet insignificant effect on box office revenues.

      You have misquoted the article, leaving out an important qualifier. The true quote actually reads:

      "we find that the shutdown had a negative, yet in some cases insignificant effect on box office revenues.”

      I need hardly add that this is not a trivial distinction. Assuming you used copy and paste for the quote, you must have then deliberately removed the text reading "in some cases" before you posted. Why exactly would anyone do this, except to change the meaning of the quote, however slightly?

      • Re:incorrect quote (Score:4, Interesting)

        by jc42 ( 318812 ) on Sunday November 25, 2012 @04:16PM (#42088763) Homepage Journal

        That "negative, yet insignificant" bit was actually in the abstract. When I read it, my immediate thought was "Typo?" But yeah, it was a case of someone dropping the "in some cases" phrase. This wasn't an error in the reporting; it was done by whoever wrote the published abstract.

        You'd think they'd have noticed and fixed it by now. Or perhaps (being social scientists ;-) they didn't understand the issue, and were really just using common speech rather than technical speech in the abstract. As someone already pointed out, "(in)significant" means something different in common speech and statistical terminology.

      • how easily this is done, eh? Lovely example of this being done to influence policy, is the Lisbon Treaty. A few letters were changed and a single comma added, and it changed the entire meaning of the document. John Major did that, and from the moment he signed it signed away the UK's right to self govern but more importantly, to run its own Judiciary. That's treason, in my book.

  • Good and Bad (Score:5, Informative)

    by Bigbutt ( 65939 ) on Sunday November 25, 2012 @02:10PM (#42088069) Homepage Journal

    Apparently the smaller films were negatively affected by the shutdown of the site (made less money). The larger films (500 or more screens) were positively affected by the shut down (made more money).

    Box office revenues of movies shown on the average number of screens and below were affected negatively, but the total effect is not statistically significant. For blockbusters (shown on more than 500 screens) the sign is positive (and significant, depending on the specification).

    [John]

    • Re: (Score:2)

      by guruevi ( 827432 )

      But the shutdown of the site also coincided with a recovering economic situation. That could also be the reason more people go to see movies in theaters. Who knows what affected a particular set of sales, could be the election, the hurricane, ... I doubt MegaUpload or TPB has much to do with blockbuster sales, they are good and have been improving regardless of the witch-hunt against free speech.

    • Apparently the smaller films were negatively affected by the shutdown of the site (made less money). The larger films (500 or more screens) were positively affected by the shut down (made more money).

      Didn't read TFA so dunno how valid it is. But that would actually makes sense.

      Big movie advertised everywhere. Person wants to watch it but doesn't want to pay. Before the shutdown they'd download it from Megaupload and watch it. But after the shutdown they really want to watch it, so they fork over the

    • Comment removed based on user account deletion

  • Cause or correlation? (Score:5, Interesting)

    by xetovss ( 17621 ) on Sunday November 25, 2012 @02:10PM (#42088071) Journal

    Just because there is alleged correlation between the two events doesn't mean the lower box office revenues were caused by the shutdown. Perhaps it is due to lackluster movies this year, perhaps it was due to the ever dwindling economy so those who would have normally gone to a movie couldn't justify spending an ever increasing amount on tickets (and concessions if the choose to get those), or perhaps it was just more people going to see "matinee" showings which are often a lot less expensive which drives down revenues but perhaps increases ticket sales. Heck one local theater to me has matinee showings that are $3 and most other showings are less than $5 before 6PM.

    Perhaps instead of counting revenues they should count actual ticket sales. Like when they say a movie has broken a box office revenue record, is it because more people are actually seeing the movie or is it because ticket prices are at record highs?

    • What about the other "C" - coincidence?

    • Re:Cause or correlation? (Score:5, Interesting)

      by klingers48 ( 968406 ) on Sunday November 25, 2012 @05:12PM (#42089067)
      Come back to me when your movie prices are like they are here in Australia.

      We currently have higher-than-parity with the US dollar, but an adult movie ticket is now sitting around the $17 range. For 3D, they usually charge $20... then another few bucks for the 3D glasses. They're also starting to get into the habit of not giving you a choice of 2D or 3D on the big movies, so you have to pay more for an arguably inferior movie format.

      They wonder why Australia has one of the highest piracy rates in the world.

  • Really? (Score:3, Insightful)

    by brit74 ( 831798 ) on Sunday November 25, 2012 @02:11PM (#42088085)
    Was this report written by the same people who scream that "correlation does not equal causation" when we point out that US per-capita music sales revenue has dropped by 70% in the last 10 years (to the lowest point anytime in the last 50 years) - during the exact period when piracy was on the rise?

    • Re: (Score:3, Insightful)

      by Anonymous Coward

      So no real effect either way then. Then why was it shut down again? Because people who are cheap (or have no money) will not go see it anyway? Yet they could affect others slightly?

      Eventually digital music will cut its own throat. Once you get a 'good enough portable copy'. There is 0 reason to buy it again, ever. Unless someone can convince you that their digital copy is better. Also the 'album' format is basically dead. Instead of 10 songs you may or may not want, people just buy the 1 or 2 songs

    • Re:Really? (Score:5, Informative)

      by Pentium100 ( 1240090 ) on Sunday November 25, 2012 @03:06PM (#42088407)

      Alternative explanations:

      It could be that new music is mostly crap - I rarely buy new releases, but I have a relatively big collection of older records and I still buy "new to me" records. I also do not buy "remastered" versions with the dynamic range squashed to almost zero.

      It could also be that people are only buying one copy of a song, instead of buying the CD/record for their home and a cassette for their walkman/car they now buy the file and play it everywhere. Also, files can be backed up easier than records or tapes, so the need to buy them again in case of damage is reduced.

      There is also the fact that iTunes and similar services sell single songs, not albums, which means that I can buy only the good songs for ~$1/each instead of buying the album (with one good and 10 mediocre songs) for $11 (to keep the song price the same) or more. Even a CD "single" usually contains remixes of the original song which I pay for when I buy that CD, but now I can just buy the original song.

      There's also Youtube. With their content filters I would expect that if the video has survived for a year and got a low of view that the copyright owner approved of it (since otherwise it would be taken down). Yet, I can find a lot of music there for free.

      • My own anecdotal experience as someone who likes a lot of current music.

        I hear a song premiered on the radio during one of the evening shows that promote new music (Zane Lowe mostly). I get really excited over this great song I just heard. I go home, find it on youtube or soundcloud (usually posted by the artist or label) and listen the hell out of it. Post about it on twitter and facebook and so on.

        However, this song is a good month or two months away from actually being released. By the time it's actually

    • Re: (Score:2)

      by mcgrew ( 92797 ) *

      Sales dropped 70%? Looks to me like the boycott worked.

  • More importantly, there are serious issues with the paper. Here is the only thing they said about the composition of their control group:

    The control group is based on matching movie characteristics to the treatment group.

    If I wanted to be able to repeat their experiment to see if I got the same results, would I be able to do it based on this description? No I would not. The research might be good, but the presentation is extremely poor.

  • " file-sharing acts as a mechanism to spread information about a good from consumers with zero or low willingness to pay to users with high willingness to pay."

    This!

    +1

  • Retardation of the MPAA... (Score:5, Insightful)

    by Lumpy ( 12016 ) on Sunday November 25, 2012 @02:33PM (#42088215) Homepage

    If anyone thinks a bad camcorder copy of a screener will keep someone from going to see a film, then they are a complete and total idiot. 90% of the "pirated" movies on the internet are really low quality screeners or early edits that have crap audio and video quality. And these same videos are the ones the MPAA are claiming HURT their income. Where in fact it helps their income. When you are looking at dropping $40-$80 to go see a movie in the theater, Yes $40 is a realistic number, I recently paid that to take my wife to see SkyFall, you will have people that will not see a film unless they are sure it is not crap.

    But the executives out there are so under educated they cant see marketing that is working for them. Now we have metrics that show that "pirated" films do in fact increase sales....

    After my experience of taking my wife to a movie opening, I'm not going back again. The movie was OK, but smelling the disgusting feet of a unbathed idiot in the row behind, me or the rude idiots that must text on their phones through the movie as well as the sticky seating and floor means I'll watch them at home when they ome out on BluRay. My theater at home has better sound anyways....

  • Even if the correlation is real... (Score:2, Insightful)

    by Anonymous Coward

    ...it doesn't mean anything in the bigger picture of whether piracy affects sales. Closing Megaupload didn't shut down piracy, everyone just moved onto another hosting services, not to mention all the plethora of peer-to-peer downloading options still available.

    I would be far more interested if research would focus on the effect of transformative use of copyrighted material. If there's one change to copyright law that I would back without hesitation, it is a strengthening of protections for, and an expans

  • The paper itself calls it an insignificant effect, so even taking it at face value, it basically amounts to almost nothing.

    • Re: (Score:2)

      by mcgrew ( 92797 ) *

      It sounds like that pot study a couple of years ago that's extremely hard to find now, the one that showed that cigarette smokers who smoked pot had half the cancers of those who smoked only cigarettes, while non-smokers had more yet statistically insignificant cancers than pot smokers.

      What this study actually showed was that megaupload had no affect on ticket sales at all; that's what every comment I've seen has sorely missed.

  • Just keeping the streak going (Score:5, Insightful)

    by rbrander ( 73222 ) on Sunday November 25, 2012 @03:32PM (#42088527) Homepage

    I think the content industries have a perfect streak going: they always oppose technologies that turn out to be, not only not harmful, but actively good for their bottom line.

    Radio was going to ruin record sales. A few decades after they lost that one, they were shelling out payola to get on the air.
    The cassette tape recorder was going to destroy records. After losing that one, they made a mint selling everybody the same record twice, the new version being portable.
    VCRs were going to be to the movie industry what the Boston Strangler was to women; after the Betamax decision, they made money selling cassettes.

    The lesson is, that when content industries oppose a new technology, they have to be beaten ... for their OWN good....

  • Correlation does not imply causation. One can even make the same argument that because Megaupload closed, tiger attacks in Chicago have gone down, too.

    Oh, and the obligatory xkcd cartoon: http://xkcd.com/552/ [xkcd.com]

    • Re: (Score:2)

      by Dan667 ( 564390 )
      everyone can agree though that a few rich people in Hollywood lobbying the US government to do their bidding is wrong and needs to be stopped.

  • I don't have cable, and I don't really watch TV. That said I typically hear about shows from friends, co workers etc and end up going on line to check them out. If I like them I tend to watch the entire series online.

    Typically these shows are on pirate/rogue tv sites and I have to fish through dead links to find working ones. Why? Because I can't watch current or even last seasons episodes online from legit sources 95% of the time.

    Now after I watch a show I'll get hooked and watch all of it and then stop an

  • All pirates spend, but only some spenders pirate (Score:3)

    by kubernet3s ( 1954672 ) on Sunday November 25, 2012 @04:15PM (#42088761)
    Wait, if pirates are the biggest spenders, why would shutting down Megaupload make them into not-spenders? Because it made them into not-pirates? How does a correlation between pirates the demographic and spending habits correlate intuitively with piracy the activity and spending habits? This actually is pretty surprising.

    • Because they find it harder to do product research, and as a result find less material that they can justify spending money on.

      • That seems specious. Are you telling me not only that pirates constitute at least a plurality of theatergoers, but that they do so based on whether or not they could pirate leaked copies? Megaupload was never a big source of pre-release content, and even after that it was all bootlegs until a DVD rip was made

        See, that also confuses me. Because piracy has always been something that affects MEDIA sales: not theater tickets. If anti-piracy organizations a have successfully finagled the dialogue so that the m

      • Re: (Score:2)

        by Inda ( 580031 )
        Product research. Exactly.

        I downloaded a comedy Christmas DVD last night. It's a family favourite comedian touting "unseen TV footage".

        After 45 minutes of "unseen TV footage", which I'm sure I've already seen, the DVD started showing "best bits from previous episodes", which I have seen before on TV.

        So, it's an "unseen" DVD where I've already seen most of the content.

        Would it make a good Christmas present? Would it bollocks and I feel offended by its misleading "unseen" title.

        Deleted.

        The only thing burned i

  • you give the product away for free, and you thereby create interest

    duh

    • Radio isn't given away for free. It's interleaved with advertisements that compel you to buy various products via various forms of psychological manipulation.

  • You can create studies that prove whichever point you're advocating. So while downloaders like this article, I'm pretty sure the movie industry will be pointing at things like this: best ever Thanksgiving weekend. [deadline.com]

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