Directors and filmmakers often condemn torrent search engines, citing reasons like pirated content and illegal circulation on the Internet hurts their box office revenue.
In fact, many countries have taken harsh steps to block torrent websites. Back in 2014, Swedish police even raided a PirateBay data center near Stockholm to end its term. However, the popular torrent search engine managed to make a comeback.
Meanwhile, marketing professors from business schools at the University of Houston and Western University believe that shutting down torrent sites will do the opposite of what general belief is regarding content piracy.
For their research, Lu and his co-authors Xin Wang and Neil Bendle, analyzed revenues generated from movies released just after the shutdown of PirateBay in 2014. The aim of the research was to estimate the impact of piracy on word-of-mouth and ultimately revenue gained by a sample of movies.
The team discovered that piracy of a post-premiere film, in fact, had a good impact on the box office revenue. The reason was the word-of-mouth promotion generated on the torrent websites.
“We find that the volume of online WOM mediates the impact of piracy on the box office. Based on counterfactual simulations, the WOM-effect from post-release piracy on the box office increases revenue by about 3.0%,” the study notes.
While the revenue of torrent sites didn’t see a significant change after the release of a movie, the study notes that piracy before the box office release causes a heavy loss in the box office collection.
According to the research — “The impact of pre-release piracy is found to be negative regardless of piracy type. The total box office revenue is reduced by 11% due to the existence of piracy appearing before the movie release.”
The findings pretty much tell the story itself. This is why the film industry and various government bodies are targeting on the pre-release piracy by implementing new strategies.
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