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".