Study: Movie studios can fix their own box-office losses to piracy without SOPA

Bulk of losses in box-office take is due to delays in showing new flicks overseas

Standing in line at the local movie theater to pay twice the reasonable rate for a seat and 10 times too much for popcorn you probably figured this out already: .

But U.S. movie studios are losing little, if any, money to content pirates in this country, and already have full control of the means to reduce or eliminate the 7 percent of box-office receipts they lose on some movies in overseas markets, according to an economic study from researchers at the Univ. of Minnesota and Wellesley College. ( via TorrentFreak)

In a study called Reel Piracy: The Effect of Online Film Piracy on International Box Office Sales , economists Brett Danaher and Joel Waldfogel compared box office receipts to BitTorrent traffic in specific national markets to find out how big an impact content piracy really carries.

They found that, while some countries have much higher rates of BitTorrent downloads of illegal files than others, it's not the amount of piracy or even the type of movie that indicates a particular movie is going to be heavily pirated.

The biggest factor is the delay between the time the movie opens in the U.S. and when it opens in theaters overseas.

"We find that longer release windows are associated with decreased box office returns, even after controlling for film and country fixed effects," the two wrote in the report, which was published on the Social Science Research Network. "This relationship is much stronger in contexts where piracy is more prevalent: after BitTorrent’s adoption and in heavily pirated genres."

Within the U.S. there was no discernible drop in box-office receipts based on the existence of BitTorrent and/or content pirates the two found.

Basically that means people who would download and watch an illegal copy of a movie weren't going to buy a ticket to watch it at a movie theater anyway, at least in the U.S.

Overseas, where the delay between the peak of hype in U.S. media about a particular movie and the time it shows up in local theaters can be weeks or months long, more people are willing to download and watch illegal copies rather than wait until Hollywood gets around to sending out copies for them.

That doesn't mean content piracy isn't a problem – in movies, music and software.

It also doesn't mean the 7 percent studios lose on box office is the total potential loss. Movies released by U.S. companies make, on average, more money overseas than within the U.S. and can double their total box-office take with aftermarket showings on premium-paid cable channels, basic cable, pay-per-view, DVD and other sales that take place long after the big first-weekend box-office bonanza.

What it does mean is that movie studios – like music producers and software makers – have far more control over the rate at which their product is pirated than they pretend, their losses are much less than they'd like you to believe and they can reduce their losses at the box office at least, by shipping new movies to foreign theaters more quickly.

That's a lot simpler and more constitutionally sound than putting responsibility for enforcement of someone else's copyrights on the heads of web site owners, forum administrators and individual fans – all of whom would be liable for prosecution under the late SOPA and PIPA bills if someone else were to post copyrighted content on servers for which they are responsible.

It also means the movie studios are just as aggressive about twisting reality and begging for reliev as the music business, though so far the RIAA – the music-industry's mouthpiece and enforcement arm – shows far more hypocrisy and dishonesty than the movie business has been caught doing so far.

It also means that, no matter how clear the problem seems to be and how loudly the complainers wail about how badly they're being hurt and how close to death they are, it's not worth rushing draconian new laws into force without considering whether they're needed.

Thetakedown of Megaupload while SOPA and PIPA were still being debated demonstrates existing laws are enough to pursue and stop even copyright violators based in other countries.

This most recent study also shows neither Congress nor the ordinary citizens who would be affected should let any special interest push through draconian new laws to solve a problem the complainers should be able to resolve themselves.

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