Feeds

BitTorrent not to blame for movie revenues, says economist

Movie futures traders provide better data than Hollywood sockpuppets

The essential guide to IT transformation

An economist known for sticking pins in big content's dire warnings about file sharing has produced a new study suggesting that BitTorrent's impact on movie revenues is small and sometimes even positive.

Koleman Strumpf, who has taken the adding machine to RIAA and MPAA claims of monetary loss since the heyday of Kazaa, has looked back over years of data for his latest opus, titled Using Markets to Measure the Impact of File Sharing on Movie Revenues.

This time around, Strumpf looks at the relationship between the stock price of producers, and when illicit copies of movies hit the file-sharing sites. The thesis is that if investors considered a Torrent of Transformers: Age of Extinction represented a greater risk for DreamWorks than the quality of the movie, it would be reflected in the share price.

In the more academic language Strumpf uses: “forward-looking markets can be used to establish the unobserved counter-factual of how movie revenues would change on any possible file sharing release date, particularly those prior to the theatrical premier.

“Using movie-level tracking stocks in conjunction with the arrival date of illicit copies, I find that file sharing has only a modest impact on box office revenue”, he continues.

Using data covering the six years from 2003 to 2009, Strumpf looked at a movie box-office futures exchange, the HSX (Hollywood Stock Exchange), and compared price movements on that data to when movies were copied, based on a large-but-unnamed BitTorrent index site.

He notes that the size of the datasets involved – since, for example, the HSX represents lots of trades – should provide better statistics than merely recording an apparent, immediate change to a movie's revenue on the date that a Torrent hits.

“In typical observational studies, there is essentially one observation per movie (the time of the file sharing release and the total revenue),” he writes. “With markets, the price moves continuously and each price change provides useful information. Market traders know there is some probability a movie will be released on file sharing networks at each time, and expectations about this release pattern are impounded in market prices”.

As a control, he looks at how HSX traders react to trailer releases (a demonstration of how quickly the exchange reacts to new information).

An interesting observation in the paper is that “one consistent result is that file sharing arrivals shortly before the theatrical opening have a modest positive effect on box office revenue”, suggesting that “free and potentially degraded goods such as the lower quality movies available on file sharing networks can have some beneficial effects on intellectual property”.

Overall, however, “The estimates indicate that the displacement effect is quite small, both on a movie-level and in aggregate” – in other words, no, BitTorrent isn't what's destroying Hollywood.

The study was presented to the National Bureau of Economic Research. ®

Secure remote control for conventional and virtual desktops

More from The Register

next story
6 Obvious Reasons Why Facebook Will Ban This Article (Thank God)
Clampdown on clickbait ... and El Reg is OK with this
No, thank you. I will not code for the Caliphate
Some assignments, even the Bongster decline must
Caught red-handed: UK cops, PCSOs, specials behaving badly… on social media
No Mr Fuzz, don't ask a crime victim to be your pal on Facebook
Barnes & Noble: Swallow a Samsung Nook tablet, please ... pretty please
Novelslab finally on sale with ($199 - $20) price tag
Ballmer leaves Microsoft board to spend more time with his b-balls
From Clippy to Clippers: Hi, I see you're running an NBA team now ...
Banking apps: Handy, can grab all your money... and RIDDLED with coding flaws
Yep, that one place you'd hoped you wouldn't find 'em
Video of US journalist 'beheading' pulled from social media
Yanked footage featured British-accented attacker and US journo James Foley
Call of Duty daddy considers launching own movie studio
Activision Blizzard might like quality control of a CoD film
Primetime precrime? Minority Report TV series 'being developed'
I have to know. I have to find out what happened to my life
prev story

Whitepapers

A new approach to endpoint data protection
What is the best way to ensure comprehensive visibility, management, and control of information on both company-owned and employee-owned devices?
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Maximize storage efficiency across the enterprise
The HP StoreOnce backup solution offers highly flexible, centrally managed, and highly efficient data protection for any enterprise.
How modern custom applications can spur business growth
Learn how to create, deploy and manage custom applications without consuming or expanding the need for scarce, expensive IT resources.
Next gen security for virtualised datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.