Did Megaupload Shutdown Have Impact On Box Office Returns?

Ten months ago, the federal government brought criminal copyright infringement charges against the executives behind the popular cyberlocker Megaupload. The government also shut down the site -- and in the process left users with no way to retrieve their files.

The move was cheered by the Motion Picture Association of America, which considers Megaupload a threat to the entertainment industry. But a recent study by researchers from the Munich School of Management and the Copenhagen Business School casts doubt on claims that Megaupload is bad for movies.

The researchers analyzed five years' worth of data from and found no evidence that shutting Megaupload helped the film industry overall take in more ticket revenue. In fact, the researchers say that the opposite might be true: If anything, the shutdown had a negative (although statistically insignificant) effect on the box office, according to the report. The researchers speculate that 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."



In other words, people who aren't going to pay to see a movie can nevertheless generate interest in the film among the people who are willing to buy a ticket. That seemed to especially hold true for "movies with smaller audiences," according to the report. On the other hand, big blockbusters did slightly better at the box office after the January shutdown of Megaupload. The report was summarized this weekend on TorrentFreak.

The findings will almost certainly be challenged by other researchers. But this report's conclusions don't seem all that surprising, considering that some people will always prefer seeing movies in theaters -- despite the fact that they have to pay for tickets. And many of those theatergoers also want information about movies before shelling out to view them. That information can just as easily come from critics or friends who purchased tickets as from Web users who streamed pirated copies.


1 comment about "Did Megaupload Shutdown Have Impact On Box Office Returns? ".
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  1. Pete Austin from Fresh Relevance, November 27, 2012 at 8:39 a.m.

    More significantly, this action somewhat damaged the brands of all movie companies, in the same way as all the litigation around mobile phones is somewhat damaging the brands of companies seem as the instigators. One one might expect a slight sales drop, because nobody likes a bully.

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