Australian/Canadian Study Disputes Cost Of Piracy

Downloads make little mark on box office - Sydney Morning Herald

Academics for the University of Sydney and the University of Calgary have cast doubt over the long held claims of the movie industry that they are losing significant amounts of money due to the evils of digital piracy.  In fact AFACT (now the Australian Screen Association) once claimed the Australian Film Industry loses $1.3 billion a year, a figure somehow determined from a two month survey of a whole 3,500 adults.

These shocking figures are usually based on an assumption that every download is a lost sale.  The amount of assumed downloads is usually based on how many IP addresses that monitoring companies see attached to a particular torrent file.  I've always seen this as a very... loose translation of data.

This recent study looked at 166 films released in Australia between January 2010 and August 2011 and found that while there was some indication that piracy led to reduced sales it usually happened shortly after the films release and it took at least 6 to 8 downloads to equate to a lost sale.

Groups, such as the Intellectual Property Awareness Foundation, have already expressed cynicism over the results of the study even though it does, at least partly, agree with their claims!

Unfortunately the above story didn't delve too deep into the nitty gritty.  There are many factors beyond pure box office takings that can affect the profitability of a movie.  Movie budgets can run into incredible amounts of money and the marketing of a movie as well can add up to pretty astronomical figures all before a single ticket is able to be sold.  Plus there is ongoing revenue from licensing the movie for public broadcast through to distribution to disc and streaming services.  There has been many a box office flop predating the modern digital "free for all" that have gone on to do big business in the home and cult screening markets.

The results of this study may be getting closer to the real picture of the impact of digital piracy, but I still believe there are many more points that should be considered.  In order to take ongoing earnings from the home market into account the scope of the study needs to encompass a much broader period of time.  This is simply not possible with more recent blockbusters (or even box office flops) and since the anti-piracy focus is on "we need all the money now" it is very unlikely that we will ever see a fully comprehensive review.

As for the figures that are normally quoted, I'll just leave this here...