BitTorrent doesn't hurt US box-office, delayed international releases drive downloading

Economics researchers at Wellesley College and U Minnesota have published a study showing that feature films' US box office returns are not correlated to BitTorrent sharing. They also show that shorter delays between the US exhibition and overseas releases result in less file-sharing -- that is, people outside the US download movies because they can't buy tickets to them.

The second point is an important one. There's only one Internet, networked culture doesn't respect national boundaries. A particularly effective marketing campaign for a new release in America will stimulate demand in other countries, and if there's no legitimate way to fulfill demand, then some portion of viewers will choose illegitimate routes. For example, the new Muppets movie has only just been released in the UK, some months after the US theatrical release (which was attended by enormous publicity). Presumably, someone at a studio concluded that there were too many UK movies in the pipeline at Christmas and not enough in February, and chose to delay the film's release to now. However, a certain portion of the audience for Muppet movies have been reading reviews, watching viral YouTube clips, and sitting through extended online discussions of the movie without being able to see it and participate. I'm pretty sure that a lot of these people downloaded the movie so that they could be a part of this moment.

Maybe they'll still buy tickets to the cinema, too. I'd guess that a lot of middle-class families with small children will do this. There aren't many kids' movies in cinematic release at the moment, and Muppets is certainly the best bet for a Sunday matinee during the record-breaking cold-snap, when no one wants to take the kids to a park on the weekend or during half-term break. But child-free adults who love the Muppets may well have slaked their thirst, and there are a lot of adults in the Muppet cohort, and adults who like kids' movies often complain about paying a lot of money to attend screenings that are disrupted by crying, talking, squirming children. If you've already seen the movie on your computer, that may be enough. Finally, there are families in the "squeezed middle" who are struggling to pay the bills may want to see the movie in the cinema, but simply lack the funds to do so, and the amount of time that's gone past since the initial release has meant that there are more online copies and that they're easier to download (for example, more BitTorrent seeds) than at the initial release. For them, the delayed release makes downloading easier and more attractive.

"Anti-piracy" efforts are often painted as life-or-death struggles for the studios. But in the case of international windows, this is about profit maximization, not survival. If the studios can outsource the titanic expense of policing copyrights in delayed-release nations to the countries themselves, they can wring a few more points of profit by delaying release to an otherwise optimum moment. But considered as a societal problem, it makes no sense to spend a million euros on copyright enforcement just so Disney can save a few thousand euros on the cost of making new 35mm prints.

Here's the study: Reel Piracy: The Effect of Online Film Piracy on International Box Office Sales, by Brett Danaher (Wellesley College - Department of Economics) and Joel Waldfogel (University of Minnesota - Twin Cities - Carlson School of Management ; National Bureau of Economic Research (NBER); University of Minnesota - Twin Cities - Department of Economics).

“Consumers in the US who would choose between the box office and piracy choose the box office (and the remaining US pirates had valuations lower than the ticket price) but that international consumers who would consider both options choose piracy due to a lack of legal availability,” wrote the researchers. “If piracy displaced box office sales in the US, we would have expected the slope of the returns profile to shift more significantly as BitTorrent became more widely adopted.”

In other words, researchers were unable to discern an irregular drop in returns of domestic box office sales, which could fault BitTorrent as the culprit.

Despite the mounting evidence and studies providing evidence to the needlessness of the movie studios’ assault against file-sharing services, their attacks have been intensifying. At the end of the day, these results suggest that, while directing the blame at file-sharing services induces the fear of prosecution among other file-sharing competitors, much of the power to curb piracy remains in the hands of the studios.

Study suggests U.S. box office not affected by BitTorrent (Thanks, Xeni!)


  1. I fully agree. In my country the Muppets movie is getting released in the original version next weekend. That’s months after the US release and they don’t even have some technical excuse, like having to translate it. It’s the same with TV series. They sometimes take 1-2 years to get to european channels. No wonder that BitTorrent has a very active tv release scene.

    If you’re frequently visiting websites about the film/TV industry, you really have to pay a lot of attention to avoid spoilers. Downloading an episode immediately and not having to stay abstinent of the Internet for a year is so much easier. The industry could even make a lot of money, if they would provide the same service for a paid flat rate. And by that I don’t mean DRM ridden iTunes that’s only available for some countries.

  2. I also see the anti-piracy campaigns as a directed assault on user generated content, particularly through provisions of these laws meant to undermine the ‘safe havens’ given to service providers. If big media can prevent artists from self publishing, they can retain control of the media the public consumes. Already many consumers are spending more time on the internet and less in front of a TV or listening to broadcast radio. Big media wants to eliminate the competition, and the competition is YOU!

  3. This particular film’s delay is baffling to me -” The Muppet Show” is listed as a British TV Show, and is hugely loved by millions – The toys were in the shops @ US release (The Disney Store ran the trailer constantly), the hype was global – Have some balls Hollywood, if your film is good people will see it, regardless of the “competition” – Don’t just plan to be the least bad film on the week of release!

    1. The Muppet Show was produced in the U.K. because Jim Henson couldn’t get U.S. networks to back it at the time.

  4. It’s half term school holidays this week in the UK,  so I guess they’ve timed released for that. 

    There are days in the year when Americans go to the cinema – around certain public holidays – which are just normal days or weekends elsewhere. In the UK, there’s a culture of taking the kids to the pictures during half-term or full term holidays. That would explain why a film might come out 10 weeks later (but not much more than that).

    1. That holds true in an economy that isn’t global and a world without the internet.

      It’s a perfect example of these industries desperately holding onto an old way of doing business and getting annoyed at those that are finding their own way to update it.

      Sure, people will still want to take their kids to the pictures during half-term, but then this film would have still been available during half-term if they’d released it at the same times as in the US – it just couldn’t have ridden a big PR train that’s also still based entirely on an old business model.  The kids going to see it this half term will have seen YouTube trailers for months, and the PR attack this week may have even been desaturated because of it.

      We live in more complex times, but fear not, Big Media are trying to rectify that.

      1. But there are are only a finite number of screens in a cinema. Put The Muppets on in the UK from US release date  to half-term, and some other film cannot be shown in that screen.  That barrier goes if it’s on DVD or if it is streamed, but it’s still there in the cinema.

        1. I just checked and it appears that the Muppets movie was released in November LAST YEAR!?

          In which case it could have been on over Christmas, instead of half-term.

          Either way a break from school is never far away from a release date.

          In fact I’m guessing the US release was for Christmas, so it would have been the exact same marketing justification – or was it for that day Americans celebrate the genocide of the indigenous population? Either way, it’s close to Christmas.

    2.  How amazing that theatres can only run one film in a week! Seriously, if I were a modern movie theatre wanting to maximise my school vacation revenue, I would run a different, relatively recent and/or relatively popular kids’ movie from 9am to 6pm every day.

      Heck, I might even offer insanely expensive weekly passes, to help parents keep the kids out of trouble while they’re at work. Give a free admission to an adult accompanied by a child under those circumstances too — knowing you’ll only likely have to honour it once or twice.

      As an additional point, none of this has to affect the evening schedule *at all*


      1. The weekend matinee used to be a family outing, with a single entry fee that allowed them to sit there as long as they wanted. Usually this resulted in a couple of movies (more like feature length episodes of a couple of series), some news reels and some random comedy shorts.

      2. I would guess that the distributors have contracts with the theaters that prevent them doing anything sensible.

        1.  I asked this question (and why they don’t show films for free during the work/school day and make money out of popcorn etc.) of a friend who is a lawyer who works in the movie business, and yes, there are indeed contracts which prevent the theaters from doing anything sensible.

  5. Since Cory Doctorow wrote this and we know his bias, I suggest reading the paper for yourself.

    The last three paragraphs of the article are very misleading. It looks like he’s quoting the article, or some third-party analytsis of the article, but it fact the first paragraph in the block-quote is from the article and the final two paragraphs are Cory’s own incorrect interpretation. The researchers themselves in fact don’t share Cory’s conclusions.

    CORY: “In other words, researchers were unable to discern an irregular drop in returns of domestic box office sales, which could fault BitTorrent as the culprit.”

    WHAT THE ARTICLE ACTUALLY SAYS:”The theoretical literature on piracy yields ambiguous predictions, and empirical studies as yet have not reached a consensus on whether piracy depresses movie revenue…

    We estimate that movies in our data would have returned a total of nearly $3.52 billion if not for piracy, implying that piracy caused films to lose $240 million in weekend box office returns in the non-US countries in our data during 2005. Thus we estimate that weekend box office returns in our data were about 7% lower than they would have been in the absence of pre-release piracy. This estimate may be conservative if the actual losses to piracy are greater than those suggested by our triple difference estimate or if returns in the US box office are also reduced by piracy.”

    CORY: “Despite the mounting evidence and studies providing evidence to the needlessness of the movie studios’ assault against file-sharing services, their  attacks have been intensifying.”

    “As a first step, policy makers need to know whether piracy is depressing sales, and our results suggest that piracy depresses international box office.”

    1. If you wanted to show that Cory has no interest in what the report actually says, one quote would have sufficed: “It is important to note that any evidence we have pointing to an effect of piracy on box office revenues is for countries other than the US, since release lag in the US is always zero. In fact, our coefficients would only indicate piracy in foreign countries over and above any piracy occurring in the US.”

      1. You are mistaken here. That quote concerns their main experiment, but immediately after they use another model to consider the effects of piracy in the US, where they conclude:

        In short, we do not see much evidence that piracy displaces US box office sales in our data, although this result should be taken cautiously as the “experiment” for examining US piracy is less clean than that for international piracy

        Max is partly right here – Cory’s interpretation of this, which is really from Francis Bea’s article, is much less tentative than the paper’s. But it is still in keeping with what they found. And at the least, the lack of a clear correlation does support saying the threat of piracy has been exaggerated.

        In short, Francis paid more attention to what they said than you did.

    2. As opposed to the completely made up and misqutoed studies used to push SOPA and in every other discussion on the epeidemic of “piracy”.

      GAO finds them unwilling to release information about how they arrived at their 32 kajillion dollar number, so they run their own.  And the numbers never manage to match up with the made up figures pull from the arses of the leadership of the **AA’s.

      Or maybe if they stopped trying to treat the planet as completely disconnected from each other, and actually worked things out so paying customers actually had the chance to pay them when the CONSUMER wants the product, not months lather when the flowchart says it is safe ot ship the digital file across the ocean past the sea monster clearly drawn on the map they are still using to navigate the world.

      But this is about them maintaining how much they made once upon a time, not about having to deal with the fact that they now face competition or that the technology has reduced their costs, while they keep raising the price blaming it all on piracy.

      Piracy depresses international box office, but it could be handled by actually meeting consumer demand.  Rather than a chart form the 1850’s telling them when it is safe to begin a sea voyage to carry booty laden vessels across the seas.

      But by all means tell us where we actually went wrong…

  6. Doctor Who & Downton Abby are examples of this in reverse; anecdotally I know people who pirate those shows because there aren’t legal ways of getting it.

        1. TV is bad for this… So many examples for both sides.  From the UK side for North Americans – Second season of Look Around You? No DVD. Charlie Brooker shows, Christopher Morris shows, Mitchell & Webb shows (one season of Peep Show? Come on), any of the River Cottage shows or any number of other cooking shows, QI, tons of great British docs. I could go on.

    1.  Doctor Who is on BBC America, but with so many commercials it’s outrageous. At the start of the season last spring I thought I’d try watching it on BBCA instead of just downloading it like I normally do, but there were more commercial breaks than BBCA usually runs and each one was longer than usual too – for a show that runs on the BBC without commercials, and is clearly not designed with good places to break.

      At each commercial break, they had clips from what I assume is the “Doctor Who Confidential” show that you hear the BBC announcers mention coming up next on downloaded episodes. This was rather disconcerting because it’s all the same people but they’re out of character, or giving away plot details – from the episode that you’re currently trying to watch!

      For me, this made it impossible to watch. I made it about twenty minutes into the second episode of the season before I literally said “fuck this” out loud and went to the torrents. I got the first episode of the season as well because the commercials meant I couldn’t follow what was going on (quite a convoluted plot lately).

      As for Downton Abbey, I heard about the show and decided to try it about a month ago so I downloaded the first season. I liked it so I started the second season downloading while I watched the first season. Then when the buzz started up about the show, I assumed it was for a third season – nope, the second season, which is from last year, has just started on PBS.

      My point was supposed to be, though, is that actually there are legal ways of watching these shows in the US. They’re just ridiculously bad compared to downloading.

  7. Indeed, english is now more than ever a lingua franka. And unlike before (NTSC vs PAL variants), there are no real technical barrier for watching a video recorded in USA on hardware elsewhere in the world.

    And now more than ever, the popular talk of the day on chatrooms, around kitchen tables, water coolers, college park benches and elsewhere is the latest movies, music and (to some extent at least) books. Not having experienced those (i dislike using the word consumed in this context), one can’t take part of the daily social interactions to the same degree.

    For fear of going hyperbolic, it may be the modern equivalent of being unable to take part in the sacrament.

  8. Well here in Ireland, Breaking Bad which is heading into it’s fifth season, has yet to air.

    What are people expected to do? Wait a decade for it to appear on the airwaves, or buy €50 box sets for each season?

    AFAIK box sets have only recently become available in the shops.

    1. I agree.

      €50 is not a fair price to pay for watching a television series once (breaking bad might actually be an exception here, but only one that proves the rule).

      Whereas advertising is a fantastic way to fund television.  So, content creators, stick ads in your TV shows and stick ’em online for everyone to watch, in all countries (shock, gasp) – and guess what, you probably won’t have many pirates any more – and you’ve increased your revenue.

      But sure, take the alternative route and punish the world for not falling in line; it’s a perfectly viable alternative.

      1. So buy the box set so? I think that this is still a very lame solution.

        OK I picked the figures out of the air. My point was breaking bad has not aired after so many series, and buying box sets is a very poor solution.

        But I’ll address your point, which intentionally misses my point by concentrating purely on cost.

        Let’s say Downton Abbey. Series 1 and 2 is on special at UK£ 24.97 = €30.10 as a box set, and for two Christmas episodes come in as UK£ 9.99 = €12.04 (a whopping €6 per episode)

        That’s more than I pay for a months subscription for my TV, on one series.

        If I am to pay this much to buy this media for a single viewing, which I subsequently dump, there seems to be something wrong with this business model.

    1. They got really close with a couple of US series here in the UK – within a day or two, which was a very good effort. 

      Although a day or two is still enough for Reddit to ruin an entire series; it’s close enough that I didn’t bother downloading/streaming those shows; and I appreciate that there are logistical issues with airing shows at the exact same time.

      1. Ah, Torchwood, that week delay that meant bloody Americans knew what OUR CAPTAIN JACK was shagging before we did.  I’d say the networks are actively malicious but, you know, Hanlon’s Razor.

  9. Not just box office, but this effects TV and TV advertisers too.

    95% of the stuff I download is because it’s released in the US before the UK.  I don’t download TV because I want to avoid the ads, it’s simply because I want to watch it and it’s available, but not to me.  Sure, I don’t see the ads, but this isn’t an active choice, unlike a TIVO user who skips through them. And I’m the criminal?

    Reverse time-shifting, I call it.

    Incidentally the other 5% is due to access; normally because I missed it on TV and it was on one of the channels that doesn’t have a catch-up service; or from a license-owner that doesn’t allow catch-up.

    And that’s only illegal because I didn’t record it myself, someone else did – which is pretty tenuous from a legal perspective if you ask me.

  10. Another question that should be examined is whether pirating effects DVD sales or if it is in the same boat as theatrical releases.

    And a 7% loss doesn’t really seem like that much, at least not as much as they claim it has been.

  11. Hugo is coming out on DVD/Blu-ray in North America at the end of February but isn’t slated to open in my country until mid-March. In other words, it’ll be readily available in pristine 1080p HD online a month or so before it comes out in theaters here, and it’s not hard to imagine that a lot of people will choose to download it not because they’re cheap but because they’ve been dying to see it and don’t want to wait another month.

    It’s understandable that films can’t always be released simultaneously everywhere, there are other factors that play into it too like the local movie industries and their releases. But it’s utterly ridiculous when we’re talking 4-5 months of waiting in this day and age when everything’s so much more global.

  12. I’m in the UK and was really bummed about the nearly 3-month wait for The Muppets to come out. I normally would have found and streamed a film (because that’s not downloading, right?), but because it is The Muppets and I am a super fan, I wanted to see it properly in the cinema. (When I say super fan, I mean it: If I had the funds available, I would have visited family in the US over Thanksgiving just to see the film sooner. )

    I take my experience to support the idea that films should be an event that you can’t replicate at home or over a computer. Some films are big deals and have to be seen in the cinema or you do not get the same experience. Others could be marketed as events that are better done in the community setting of the cinema.

    1. I take my experience to support the idea that films should be an event that you can’t replicate at home or over a computer.

      I’m pretty sure that I couldn’t get my living room floor that sticky, and I don’t own a cell phone, so I can’t text people while I’m watching the movie.

      1. I knew someone would say that! I was actually quite irritated with other people merely existing in the cinema and the overpriced food, as well as the restriction on me to not cheer and react ridiculously (and loudly). However, I wouldn’t miss the opportunity to see The Muppets in the big screen!

  13. The only time I watch a pirated film or TV show is when I’m not 100% excited for it, and the only alternative is to wait months for it to be made available for purchase – if it is released at all.

    For example – on this page I’m served ads for Netflix. Have you seen the UK Netflix’s offering? Their sci-fi section contains a paltry 18 titles including ‘The Last Unicorn’ and Rob Schneider’s ‘The Hot Chick’. The only reason for this is the distribution companies can’t get their act together; when will they realise that people like me want to give them money?

  14. Yup. Piracy is not driven by the audience’s desire to steal or the greed of the artists, but by the stupidity of the ‘business geniuses’ at the production and distribution companies. If the (now largely useless) middlemen were gotten rid of, piracy levels would fall by much more than they would with PIPA, SOPA and ACTA combined.

  15. As bad as delays for movies can be, the wait for anime (Japanese animation) to come to the US and other countries is often much worse. Sometimes it will be upwards of a year before some titles are brought overseas while others don’t make it at all. Furthermore, less and less titles are even getting TV airtime.

    The worst part is that both US distrbutors and the Japanese studios keep looking at the situation and scratching their heads wondering, “Why are we losing non-Japanese sales to piracy?”. The reason is simple: Our world is no longer separated by distance. Fans anywhere in the world can know about a title’s release in mere minutes. Because of this, people want this stuff –now–, not a year and half from now when said fans have lost interest and moved on to something else.

  16. Great article and an excellent discussion.   boingboing remains an oasis of thought in a desert of invective.

    I think Louis CK’s online release of his Beacon Theater show shines some light on this.   He released it DRM free assuming that if he put out good entertainment at a reasonable price ($5), it would make him good money, and keep the piracy to a minimum.   S0 far, he’s been right

  17. they don’t even make prints these days… the cinemas have digital projectors… so there’s even LESS excuse for delaying the release…

  18. It isn’t all ‘evil’.

    Distribution companies often stagger Hollywood releases, to decrease
    competition for local releases. Australia, for example, is very precious about its local content. Unfortunately small indepedent releases can’t compete for advertising here.

  19. But only by the timezone offset these days. The airdate of the finale was a plot device in Series 5, which made BBCA look even worse than usual, so they at least aired Series 6 on the same day. PenguinChris is spot on with the rest of it, though.

    Seriously, I’d buy a UK TV license for full access to iPlayer from the States.

    Edit: This was intended as a reply to Mordecai’s comment on BBC America delaying broadcasts.

  20. Bit-torrent has made me purchase DVD’s I’d never had a chance to see. I have small kids that watch tv and things I’d like to see are inappropriate/boring for kids. Download episode , get hooked, buy DVD’s Box sets. Put adds in the torrent. I’d still watch.

  21. Some people will never learn.  If a customer comes up to me and asks for a movie, I’ll say, “Yes, I have it in stock and it’s $10 .”  But then they might say, “Oh, but I can just download it for free from a  torrent site.”  Eventually, when you lose sales like this on nearly a daily basis, it does put a huge dent in your income.  If a consumer has a choice of buying something for $10 or getting it for free, a large portion of people will lean towards free.  So yes, Bit Torrents ARE hurting box office and dvd sales.  It’s just common sense.  If you want a movie, just BUY it or RENT it.  Spend some money, you cheap bastards.

  22. I could imagine people doing exactly this, because of that reason (not that I would know *cough*). I see torrents as a distribution system, which – if the content-distributors and middle-men would be smart about – would find ways to embrace. 

    Living in Germany and avoiding (US-) Credit Cards online – I am stuck with 1-year later dubbed versions (awful translations) in bad cinemas, or 5-year later, also (dubbed) overprized DVD-Editions. iTunes Store or Amazon are NOT selling English version movies to me in Germany. Nor do I have access to Netflix like services. The same with TV-Shows, everybody is tweeting instantly after it airs on the US East-Coast. Am I to wait 3-5 years, for some German TV company to pick up the license eventually?!

    It’s if the Internet and real-time media does not exist in the mind of territorial marketing schemes. The drug … sorry content distributors, worry about their distribution channels & everyone of them getting their cut (national-level – exclusive – licensing deals/trades) – the end-consumer is just a pawn. We are milked when they see fit and how they see fit. And stupid consumers, as we are (we WANT their stuff), we play along.

  23. Well said Cory. Living outside North America (in Asia) presents me with some really stupid release dates – sometimes as much as 6 months after USA. Guess what? If we have to wait 6 months to see a movie that’s already showing in USA we will just download it. 

    Sadly a major problem is that the USA remains one of the most desirable entertainment creation hubs in the world but also operates so many backwards services such as Hulu. Hulu was founded in 2007 but still some 5 years later this service AND Netflix (founded in 1997) some 15 years later are no closer to being internationally accessible. By the way, claiming expansion into Canada is international doesn’t fly with the rest of the world.

    So in summary as long as movies and digital content remain delayed or locked-up in the USA, illegal file sharing won’t go away. 

  24. In New Zealand, contrary to what the Motion Picture Distributors’ Association might think [1], movies take an average of 57 days to get to our theatres, and some as many as 216 days [2]. Many films never come out here at all, not even on DVD—and distributors think the piracy ‘problem’ isn’t their fault.


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