Film-Tech Forum ARCHIVE: File Sharing's Impact On Movies Is Modest At Most

This is topic File Sharing's Impact On Movies Is Modest At Most in forum Film-Yak at Film-Tech Forum ARCHIVE.

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Posted by Frank Cox (Member # 6258) on 07-14-2014, 02:58 PM:

This was just posted on Slashdot

What is the impact of file sharing releases on the movie industry? Ask the studios and they will say billions. An economist named Koleman Strumph is presenting a paper at the National Bureau of Economics this week that tries to estimate the crowd out from these releases. His conclusion: "I find that file sharing has only a modest impact on box office revenue." In fact, Strumph finds that file sharing before the official release of a movie can actually be beneficial to revenues: "One consistent result is that file sharing arrivals shortly before the theatrical opening have a modest positive effect on box office revenue. One explanation is that such releases create greater awareness of the film. This is also the period of heaviest advertising. In conjunction with the main estimates, this suggests that free and potentially degraded goods such as the lower quality movies available on file sharing networks can have some beneficial effects on intellectual property."

Link to the paper (PDF file)

Posted by Mike Blakesley (Member # 26) on 07-14-2014, 08:55 PM:

The reason the studios say "billions" is because they assume that everyone who views a movie illegally WOULD have bought a ticket, had the illegal opportunity not been there -- which of course is silly.

There are some losses to be sure, but obviously there's no way to quantify EXACTLY how many tickets would have been sold to those illegal viewers.

Posted by Steve Guttag (Member # 268) on 07-14-2014, 09:41 PM:

What they don't see is that the BIGGEST losses to boxoffice revenue is the short release window. When you tell people that you can "own" the movie in a few short weeks/months they you've cheapened the product. There is no sense of urgency about it all...what is the rush? No need to see that in the theatre...we'll catch it on cable/netflix...etc.

You start making the home release AT LEAST a year away...then you'll see more attention being paid to the theatrical release and more hoopla on the eventual video release. You'll also see more of how much real theft is going on too.

Posted by Randy Stankey (Member # 64) on 07-14-2014, 10:42 PM:

Actually, file sharing brings more of a boost to the entire economy, as a whole, than movie companies claim they lose in box office revenue and home video sales.

In order to share and display those files, people have to buy bigger, better and faster computers, displays, hard drives, RAM, speaker systems and network equipment. All that stuff costs money.

The cost of all that bigger, better, faster equipment adds up to orders of magnitude more money than the studios claim they lose in tickets or sales.

Posted by Edward Havens (Member # 4715) on 07-15-2014, 10:09 AM:

Money that the studios don't see, Randy... unless everyone who is illegall downloading Amazing Spider-Man 2 is doing so on a Sony Vaio computer.

Posted by Randy Stankey (Member # 64) on 07-15-2014, 11:18 AM:

There is an equilibrium point where losses by the studios and gain by computer manufacturers produces maximum benefit for the economy.

Reductio ad Absurdum:

Therefore, if the studios resist the idea that there is a certain amount of file sharing which benefits all then they must be willfully trying to destroy the economy.