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New paper disputes claim that MegaUpload helped mid-sized movies

By | Published on Wednesday 18 September 2013


The Motion Picture Association Of America has welcomed a paper published by the Phoenix Center for Advanced Legal & Economic Public Policy Studies which questions that previously reported piece of research that claimed that the shutdown of MegaUpload had had a detrimental effect on smaller independent film releases.

The Hollywood trade body, of course, lobbied hard against file-transfer site MegaUpload while it was still running, them seeing it as a prolific enabler of movie piracy, and therefore welcomed the action by the US government that led to the controversial website being shutdown. And the trade body later told the Office Of The US Trade Representative that the closure of MegaUpload had been a “massive” benefit for copyright owners around the world.

But last month research from the University Of Munich and the Copenhagen Business School claimed that, while the closure of MegaUpload and the resulting reduction in movie piracy had likely contributed to a slight increase in revenues for blockbuster movies, mid-sized films had likely lost out, because file-transfer sites enabled peer-to-peer promotion of films that couldn’t afford massive advertising campaigns, and that could result in more tickets sold at the cinema.

However, Dr George Ford of the Phoenix Center argues that the Munich and Copenhagen academics reached that conclusion because of “a poorly-designed statistical model” and a misunderstanding of the economics of the film industry. The study, therefore, Ford reckons, “adds nothing constructive to the debate – save a little excitement”.

A key problem Ford has with the Munich/Copenhagen report is how the researchers defined big and mid-sized movies. He says they did so based on how many screens a film was shown on during its first weekend which, Ford says, ignores the fact some movies open small but expand out to many more screens in the following weeks.

Welcoming Ford’s paper, the MPAA wrote in a blog post on Monday: “Individuals who watch pirated films online do not discriminate based on a film’s size, and a review of the academic evidence available finds that in fact online piracy does hurt sales”.