Study: Internet piracy can cost movie studios up to 10 percent of annual revenue

We are sure there are a few Florida residents who have illegally downloaded a movie or two. “What’s the harm?” the thinking goes. “Movie studios make millions. This will not affect them at all.”
Au contraire, according to a recent study.

“Gone in 60 Seconds: The Impact of the Megaupload Shutdown on Movie Sales” is the name of a recently published paper that explores the research of two professors, a Wellesley economist and a Carnegie Mellon public policy scholar.

The two professors assessed what impact internet piracy (which, of course, amounts to copyright infringement) had on movie sales and rentals.

Essentially, the two researchers looked at sales and rentals of movies when the website megaupload.com, which was popular among illegal file sharers, was available and then a period when it was not. They found that revenues were between 6 and 10 percent higher in the era after authorities shut down Megaupload.

While Megaupload was just one site for illegally file sharing, it was certainly the market leader. It logged about 50 million hits a day during the era when it was most popular and was visited by people from across the globe.

One researcher said people who are very determined to illegally download copyright material won’t be foiled by Megaupload’s shutdown, but it seems the site’s closing deterred casual downloaders.
If you are ever tempted to illegally download a book, movie or music album, please be advised that this is illegal. Also, do not make the mistake of thinking it is a victimless crime. Piracy is not very different from other forms of stealing, and it is wrong.

Sources:

  • BuzzFeed, “Carnegie Mellon Study Claims Online Piracy Has Strong Effect On Movie Sales,” Tessa Stuart, March 11, 2013
  • Social Science Research News, “Gone in 60 Seconds: The Impact of the Megaupload Shutdown on Movie Sales,” Brett Danaher and Michael D. Smith, March 6, 2013

If learning more about copyright law interests you, our “Copyright Law” page might have more information that you would find worthwhile.