Research: Megaupload Shutdown Impacted Box Office Sales

The research investigated box office sales over a five-year period covering 1,344 released movies in 49 countries. According to their findings, overall movie revenues decreased following the shutdown, but smaller and major movie releases were affected in different ways:

"[…] the shutdown had a negative, yet in some cases insignificant effect on box office revenues." Not all movies were negatively affected: "For blockbusters (shown on more than 500 screens) the sign is positive (and significant, depending on the specification)."

The finding that blockbusters were positively affected by the Megaupload shutdown opens the door for a wide range of speculation, without any clear-cut explanation. However, the researchers offered this version:

"Our counterintuitive finding may suggest support for the theoretical perspective of (social) network effects where file-sharing acts as a mechanism to spread information about a good from consumers with zero or low willingness to pay to users with high willingness to pay. The information-spreading effect of illegal downloads seems to be especially important for movies with smaller audiences."

If that is the case, then we could conclude that the word-of-mouth engine promoted by Megaupload especially benefited smaller productions that don't have access to the marketing resources of larger movies.

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  • Deadboy90
    How did they determine that Megauploads shutdown affected blockbuster movies? Perhaps the public was just more keen to go see a movie in a theatre than they were for seeing them before the shutdown. Theres really no objective way to measure this.
  • unoriginal1
    Agreed with deadboy90... To me it always seems like movies go in cycles. About 2 years of crap movies and 1 year of ones I actually want to see. Plus it's not like Megavideo was the only site that hosted pirated copies...
    You've got movie2k, Potlucker, videoweed etc etc just to name a few.
  • drwho1
    Although I would like to see Megaupload back somehow...
    this is a failed attempt at an AD disguise as a "research article".
  • demonhorde665
    most files on mega upload were legit user s posting stuff they created , how f--- does that affect box office sells , this is just a shallow attempt to make mega upload look more important in the pirating scene than it was. if the site was sucha huge pirating tool then WHY did many professors in my school. direct student's there to uplaod large files the school site couldnt handle .. my school was FOR GAME ART DESIGN !!!!! if the site was that big of a pirate place they'd not have recomemended it, as the gaming industry is even more notorious for fighting piracy than mpaa is .
  • Jerky_san
    I gotta admit megaupload wasn't exactly legitimate but all the stuff coming out about the FBI's handling of this smells incredibly bad..
  • goodguy713
    how can they say it was not related to the economic conditions around the theaters them selves .. not every one has money to blow on movies and 15 dollar popcorn n drinks
  • foody
    I've literally been saying this about pirating for years.
  • lamorpa
    demonhorde665most files on mega upload were legit user s posting stuff they created...Cute. Blind naivety always is.
  • ridri
    Have to wonder how much the global recession skewed these numbers as they seem to cover the same time period.
  • demonhorde665, just because your school used megaupload doesn't mean megaupload wasn't a huge hub for piracy. Your school (and the gaming industry) can be anti-piracy and still happen to use the same data server that pirates use. I seriously doubt that your school will struggle to find a different (and more legitimate) file server for the scale that they need.

    Even though this particular article is nearly as bad as some others, it's embarrassing how Tom's Hardware floats so many stories that implicitly mock the fight against piracy. Perhaps it's because so many of its readers (and writers, I'm sure) actively participate in illegally downloading and sharing content, and would like to continue doing so. Somehow the concept of downloading someone else's hard work illegally is not viewed in the same light as stealing a cd box from a store.