Are Hollywood’s piracy claims overblown?

A new report claims that despite Hollywood’s insistence to the contrary, movie piracy has very little actual impact on box office results within the United States.

However, the report – titled  “Reel Piracy: The Effect of Online Film Piracy on International Box Office Sales” – does acknowledge the negative impact piracy has on overseas studio profits.

“Our findings indicate that, as a lower bound, international box office returns in our sample were at least 7% lower than they would have been in the absence of pre-release piracy,” Brett Danaher of Wellesley College and Joel Waldfogel at the University of Minnesota wrote in the paper’s abstract. 

“By contrast, we do not see evidence of elevated sales displacement in US box office revenue following the adoption of BitTorrent, and we suggest that delayed legal availability of the content abroad may drive the losses to piracy.”

Danaher and Waldfogel also noted that while piracy for science fiction and action films is on the rise, US audiences still prefer a theatrical experience. 

Nevertheless, movies analyzed in the study would have likely returned a total of nearly $3.52 billion if not for piracy – implying the practice caused films to lose a cool $240 million in weekend box office returns overseas.

As such, the researchers recommended that studios continue to accelerate international showings of films shortly after their US release (effectively reducing lag between US/international releases), particularly for genres that are most heavily pirated, like science fiction and action movies.