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Smaller movies hurt more by file locker crakdowns

Copyright lobby groups have changed their strategy for preventing illegal downloads of movies and music over the past decade. For a while it was all about suing the humble downloader/uploader, leveraging fines over tens if not hundreds of thousands of [insert any Western currency here] for sharing a few bits of copyright “protected” media. More recently though, they’ve focused on targeting the distribution platforms themselves – essentially cracking down on universal freedoms rather than those of individuals.

They’ve been quite successful too, depending on how you look at it. Many file file lockers shut down to avoid heavy fines or restrictions, others have tried to appease the groups and have had to continually scale back their services, whilst some, like Megaupload, were shut down altogether.

While the copyright lobby groups and the movie industry have hailed these moves as victories, new research has shown that it in-fact hurt a lot of studios and movie makers. Some blockbuster profits went up, but smaller movies suffered a lot.

This report comes from the Munich School of Management and Copenhagen Business School, which looked at 10,272 movies from 50 different countries and compared their revenue before and after the Megaupload shutdown on 20th January 2012. It was found that while some of the larger movies did see small increases in revenue, smaller and medium movies often suffered and saw revenue drop.

Rap music sales must have taken a big hit though. 

“The results of our analysis suggest that the shutdown of Megaupload did not – as one might expect – generally increase box office revenues of movies,” said author of the piece, Christian Peukert, while speaking with TorrentFreak.

But how could this be? We’ve been taught by movie studios and lobby groups for years, that piracy = direct loss of sales and if that piracy was eliminated, all of those that would have downloaded it would purchase the movie instead. Not so apparently, as this study suggests that it was the loss of word-of mouth promotion for these movies that harmed them. While the larger films had the marketing budget to get the word out and still maintain their fanbase, the smaller ones without such financial might behind them struggled to make an impact.

“Smaller movies usually have smaller marketing campaigns, making word-of-mouth therefore a more important success driver. If some of this word-of-mouth effect is then taken away with the shutdown of illegal content, performance of smaller movies is likely to be hit harder,” the paper notes.

However, we have to give copyright lobbyists their due. Some blockbuster movies did see revenue increases, which the study suggests could have been the result of people not downloading the movie and therefore buying a ticket to see it instead. But, this evidence doesn’t necessarily equate to that conclusion, as the study also highlights how the Megaupload shutdown didn’t hinder the availability of pirated movies. There are thousands of sources of illegally copied movies online – shutting down one has no effect on the supply.

KitGuru Says: Just watch. The media lobby groups will take this study and spin it in a way that suggests that shutting down Megaupload increased movie revenue. The cherry picking will be ridiculous. 

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