8 ms·

The Impact of the Megaupload Shutdown on Movie Sales

112 points by valgaze 14y ago

kevinwuhoo 14y ago
There are a few points from this publication that are suspicious: 1. There's no mention of funding sources for this study. 2. It's a small sample size of "two major studios". 3. Most importantly, this study isn't peer reviewed. [1] [1]: http://www.ssrn.com/update/general/ssrn_faq.html http://www.ssrn.com/update/general/ssrn_faq.html
- a_bonobo 14y ago
  I think one can assume that the funding comes from the IDEA from this sentence: >This research was conducted as part of Carnegie Mellon University’s Initiative for Digital Entertainment Analytics (IDEA). The IDEA is apparently a think-tank to help "groups like MPAA and policymakers [to] navigate the changing digital media landscape."[1] Interestingly, funding for the IDEA has been made possible by "an unrestricted gift from the Motion Picture Association of America." [2] Edit: From one of the author's blog it looks like the study has been submitted for peer review: "The study is currently under peer review at a good econ journal." [3] It seems that the SSRN where this paper is currently hosted is to social sciences and economics as to what arxiv is for natural sciences: a repository for yet unreviewed drafts of papers. [1] http://www.bizjournals.com/pittsburgh/blog/innovation/2012/10/mpaa-teams-with-cmu-to-fund-new-center.html http://www.bizjournals.com/pittsburgh/blog/innovation/2012/1... [2] http://www.techtaffy.com/carnegie-mellon-launches-digital-entertainment-analytics-initiative/ http://www.techtaffy.com/carnegie-mellon-launches-digital-en... [3] http://brettdanaher.wordpress.com/2013/03/12/megaupload-shutdown-increased-sales-of-digital-movies/ http://brettdanaher.wordpress.com/2013/03/12/megaupload-shut...
dude_abides 14y ago
The authors are from a prestigious school, CMU. Still, I was curious to know who funded this research. Alas, not surprisingly, it is MPAA. The CMU lab is called Initiative for Digital Entertainment Analytics (IDEA), and according to CMU's press release "The creation of IDEA was made possible through a gift from the Motion Picture Association of America (MPAA)" http://www.cmu.edu/homepage/society/2012/fall/entertainment-analytics.shtml http://www.cmu.edu/homepage/society/2012/fall/entertainment-... "The MPAA was interested in CMU in part because of our unique strengths in the performing arts, computer science and technology, and management," noted Smith. Looks like MPAA also had something else in mind, when they funded this lab.
- maxmcd 14y ago
  Not disagreeing, but whenever there is a study posted where the funding comes from a source that has an obvious interest in the outcome of a study there is always a comment like this one pointing out the conflict. I understand providing information beyond that would be likely very difficult, but having never been in a similar research situation, could someone outline what this influence is like? If there an underlying pretense during the research that they have to reach a specific outcome? Is it more subtle/obvious? Any additional insight would be appreciated.
  - dude_abides 14y ago
    I became suspicious because the writing style of this paper was very superfluous, yet the conclusions were very strongly worded. Here is an example in the very first page: for each additional 1% pre-shutdown Megaupload penetration, the post-shutdown sales unit change was 2.5% to 3.8% higher, suggesting that these increases are a causal effect of the shutdown. This does not suggest causality. You need more rigorous inductive reasoning, and randomized trials, if you want to conclude causality. Edit: Just found out that SSRN is not even a peer reviewed journal! ( http://www.ssrn.com/update/general/ssrn_faq.html#no_paper_sub http://www.ssrn.com/update/general/ssrn_faq.html#no_paper_su... )
    - andrewfelix 14y ago
      I agree it would be hard to draw sound conclusions from the study. The changes probably aren't even outside variability. But are these the claims really that outrageous? ie. The biggest piracy site in the world has a slight effect on sales?
      - drucken 14y ago
        It is meant to be a scientific study. What's the use of an unsubstantiated claim? In fact, its been proven to be highly counterproductive (at least in other fields) as others go on to build works and further claims around it, only to later discover the errors and depth of uncertainties. Using the same principle, I could posit (probably quite defensibly), that the amount of alleged copyright infringment of Megaupload Limited's limited access and centralized services would be dwarfed by that from Bittorrent and other P2P methods.
waterlesscloud 14y ago
Is it really so far-fetched that closing down a major piracy site would increase legitimate downloads by 4-6%?
- salman89 14y ago
  Not so far-fetched, but I do feel that it will be very difficult to have conclusive evidence to prove as such.
- tptacek 14y ago
  Yes. It is IMPOSSIBLE TO BELIEVE.
  - badgar 14y ago
    We all know that piracy increases sales, if anything, because [personal story about buying something].
    - ihuman 14y ago
      [Reference to gaming legend agreeing with this]
      - anigbrowl 14y ago
        [Snooty takedown wrapped in silky false humility]
        L0j1k 14y ago
        [comment about doing it better in haskell]
- andrewfelix 14y ago
  No. Quite interesting looking at the comments here furiously looking for flaws in the study. If the results had found the opposite, I doubt the study's legitimacy would have been so vigorously questioned.
jared314 14y ago
Brett Danaher: http://scholar.google.com/citations?user=w7W3zn0AAAAJ&hl=en&oi=ao http://scholar.google.com/citations?user=w7W3zn0AAAAJ&hl... Michael D. Smith: http://scholar.google.com/citations?user=rzPlMfQAAAAJ&hl=en&oi=ao http://scholar.google.com/citations?user=rzPlMfQAAAAJ&hl... From the paper: Our [Megaupload] Internet penetration data is based ... Google AdWords estimates of the total number of unique visitors ... [and] ... the total number of Internet users in each country in our sample... As such, the shutdown of Megaupload influenced the policies of several other cyberlockers focused on piracy, and our results necessarily measure the “net impact” of the Megaupload shutdown across the cyberlocker industry, as opposed to just measuring the impact of Megaupload.
wizawuza 14y ago
Anyone that read the 26 pages (sorry, I'm lazy), can you comment on whether they take into account timing of releases? In other words, if the best and biggest movies come out right after the shutdown, sales could have increased due simply to that.
- anigbrowl 14y ago
  I can't access the site right now (HN effect??) but it would be surprising if they didn't, given the widespread understanding of release scheduling within and without the industry. Whole books are written about release timing, and the film industry supports two daily trade newspapers, whose economic analysis is as sophisticated as those in any other industry.
DigitalSea 14y ago
This is most certainly not a biased funded study with links to the MPAA guys. Without-a-doubt it is definitely an independent study performed by real people with no links to the entertainment industry. Now if you'll excuse me guys I'm just going to go to the cinema to watch a $30 per ticket blockbuster movie because the entertainment industry needs our support. I'll be back later. Definitely not suspicious!
- fragsworth 14y ago
  If piracy didn't actually cost the entertainment industry anything, wouldn't you think they would stop wasting any money trying to prevent it? I would assume they'd try to be fairly objective with this study, because they'd be very happy to discover that piracy is a good thing for them.
  - chaostheory 14y ago
    Well the RIAA still firmly believes that litigation is what slowed down music piracy. However in reality it was probably the advent of easy to use and cheap (or even free) music streaming services that really hurt music piracy.
  - bluedanieru 14y ago
    Large corporations are rarely driven by profit, but rather petty political bullshit and personal crusades.
  - vacri 14y ago
    On favourite tactic of the movie houses is to report on decline in US domestic sales (and they are, or at least were last year), but report on piracy globally. They don't report on global sales, because they're raking it in.
    - anigbrowl 14y ago
      Half-true. Foreign distributors get a large cut of that on a hit, but lots of films don't play to a foreign audience while still suffering from the decline in domestic sales. Said decline hits theaters and the people who work there, who are not subsidized by a film's overseas profits.
tudorconstantin 14y ago
Assuming that the 5% increase in sales is real - I wonder if the total costs invested in lobbying, bribering politicians to create favorable laws and all the anti piracy pr campaigns are worth it in the end
- deleted 14y ago
  [deleted]
- waterlesscloud 14y ago
  VERY rough ballparking to follow. Call it 200,000 digital sales per week total, 350,000 digital rentals total. That's for 2 studios, so let's multiply by...I dunno, 4 sounds good to account for the other distributors (this might be way off). So 800,000 sales, 350,000 rentals. Say the sales net an average of 8 bucks per sale and the rentals 2 bucks each. I made these numbers up, but they match my ancient retail experience. So that's 6.4 million in sales and 700,000 in rentals per week. Times 52 and that's 333 million in sales, 36 million in rentals. So, call it 370 million total for a year. So 5% is 18.5 million. Be generous since we're ballparking and call it $20 million. Hmm. Digital alone would probably be a close call. But factor in dvd/bluray and theatrical and it would certainly be worth doing. EDIT- I didn't do too bad! http://latimesblogs.latimes.com/entertainmentnewsbuzz/2011/02/online-movie-downloads.html http://latimesblogs.latimes.com/entertainmentnewsbuzz/2011/0... says in 2010 the digital market for movies was $385 million. But then tv was an additional $366 million, so double that $20 million estimate to $40 million. And it's going to grow fast.
DanBC 14y ago
> Governments spend resources in order to win court cases against such sites and to mount shutdown operations. Why, if there is no criminal offence, are governments getting involved? Why aren't the rights holders (who claim to be the ones losing money) suing for lost earnings?
zacharyvoase 14y ago
It says that they analysed 12 countries. Is it possible that they selected these countries specifically, and rejected others that may have refuted their hypothesis? I'm trying to say this with as little judgement as possible. I just know that deciding to look only at certain countries to support a hypothesis has been done before (c.f. Ancel Keys's Seven Countries Study).
- andrewfelix 14y ago
  They were looking at data from two major studios. I assume those studios had good penetration/data for those particular countries.
  - lessnonymous 14y ago
    I am concerned that the MPAA, in commissioning the study, provided the researchers with data from two studios who saw a big lift in sales in the period following the shutdown. I've not read the paper so I've no idea if this is an issue or not, but only using the data of two studios seems to be a low sample size. Imagine if the week after the shutdown "Lord of the Rings" was released, or "Twilight", or any other blockbuster. Find two studios with big releases in the period after the shutdown and it looks like some significant causation.
    - sambe 14y ago
      Is it completely unreasonable to also suggest that they would simply manipulate the data? I know, it's a strong claim without evidence. However, I'm under the impression that sales figures are routinely manipulated for other reasons, and it definitely wouldn't be beyond these companies morally-speaking to do so here.
    - TheCapn 14y ago
      "Our sales data are provided by two major U.S. movie studios and include all digital purchases and rentals through their major digital channels aggregated at a weekly level from September 2, 2011 until May 31, 2012. These data include each of the 12 countries where these digital channels were available as of September 2011." Quote from page 8 of the paper (First paragraph of section 4 if you care to look it up in context). My concerns are that (1) the study was funded by the same individuals who provide the data showing immediate conflict of interest and (2) the data does not span a 12 month spread. So even though they claim to make consideration for seasonal attributes like Christmas sales we don't have a full data set to know if the rise/fall pattern they display is typical for this timeframe. The release of "summer blockbusters" or other studio phenomenon cannot be compared to the data unless we have data spanning multiple years to know when peak seasons of sales are. Heck, a third issue is their lack of physical sale data. So although they have source showing digital piracy to digital sale correlation is likely it doesn't account for digital adoption of newcomers to the market.
iambibhas 14y ago
6-10% increase should be the normal sales amount variation, right? Any given month/week, this much of variation can occur without any reason.
- Evbn 14y ago
  That's why multiple data points are used.
  - AnthonyMouse 14y ago
    There was only one shutdown. That isn't multiple data points. They could be measuring the effect of anything that occurred during the same time period as the shutdown: The recovering economy, which specific films were new releases during that period of time, the popularity of other goods or activities that serve as substitutes for movies during that period of time, the weather, etc. To get multiple data points you need multiple events.
nextstep 14y ago
Even if the result of this study is accurate, the point is irrelevant. Piracy cannot be stopped, and eventually free methods of consuming content will become so prevalent that content creators will be forced to adopted entirely new business models. I don't believe there will ever be a silver bullet that can block piracy; DRM schemes will only serve to ruin the experience for paying customers, while free, pirated alternatives will continue to proliferate and present better and better user experiences. Perhaps a revenue model based solely on product placement could work, but most likely entirely new business models that haven't yet been dreamt up will resurrect entertainment for profit. Perhaps digital sales will serve purely to advertise performances or other tangible art experiences. Regardless, I imagine the entertainment industry will look vastly different in 10-15 years.
- anigbrowl 14y ago
  eventually free methods of consuming content will become so prevalent that content creators will be forced to adopted entirely new business models ...or just exit the market and do something else. Musicians can play live; that doesn't work very well for film directors or actors. Sure, there's the theater, but but the size of the audience you can play to is limited to the distance within which actors can be easily seen and heard. You can't really stage a play in a stadium the way you can stage a music event. Perhaps a revenue model based solely on product placement could work Producers and screenwriters already make the most of their opportunities there. It's possible, up a point; if I'm writing a script based in the 19th century I can look for some premium brands with a long legacy for placement or cross-promotion opportunities (you'd be surprised how many there are). But that won't work for earlier periods, science-fiction, or contexts that brands typically prefer not to be associated with, like war movies or stories with gloomy themes. Entirely new business models are pretty thin on the ground. 'Make something and charge admission to people who want to see it' has been around for a while. The latest attempt is the current crop of 3d movies, since that doesn't really work on the sofa, but it's a big increase in production costs for relatively little box-office gain.
- snowwrestler 14y ago
  It's easy to hand wave about "new business models" without being specific. If you know of a better way to create a profitable media business, why not go out and eat the incumbents' lunch?
caublestone 14y ago
Does this study account for the fact that 2011 was the worst year for movies (in terms of quality) ever? Look at the academy award winners and the top box office performers of that year and compare it to 2012. Side note: I would like to see a study on the quality of movies in 2011 vs 2008 based on economies 3 years previous. So when movies were getting funding in 2005 for release in 2008, we got some real gems. In 2008, when the economy took a down-turn, we see some bad ones in 2011. http://boxofficemojo.com/yearly/chart/?yr=2011 http://boxofficemojo.com/yearly/chart/?yr=2011 http://en.wikipedia.org/wiki/84th_Academy_Awards http://en.wikipedia.org/wiki/84th_Academy_Awards http://boxofficemojo.com/yearly/chart/?yr=2012&p=.htm http://boxofficemojo.com/yearly/chart/?yr=2012&p=.htm http://en.wikipedia.org/wiki/85th_Academy_Awards http://en.wikipedia.org/wiki/85th_Academy_Awards
- sturadnidge 14y ago
  Exactly this. The 'study' hasn't controlled for anything. There precisely no discussion of the weather (the summer months are suspiciously absent from the data set, nor the weather patterns commented on - Sydney, Australia had one of the wettest summers on record over 2011/2012), the economies of the countries involved, let alone a year over year data comparison. The only thing "gone in 60 seconds", is the credibility of the authors of this study.
mtgx 14y ago
Says the research lab with "unlimited" funds from MPAA. Okay.
jowiar 14y ago
Personally, I don't pirate movies/music, but as a CMU (SCS + Heinz) alum, the lack of rigor and potential conflicts of interest displayed in this paper are disheartening. More than that, they cheapen the value of my degrees. One of my big pet peeves in data analysis is making major inferences and broad, sweeping statements based on a very small sample size. This paper appears to be a prime offender. Looking at this case, there's a pretty good argument that Netflix and the LoveFilm app launching in the UK, QuickFlix Streaming launching in New Zealand, The Artist (with a French director and star actor) getting a lot of attention and being released to rental, a particularly chilly winter in western Europe, and god knows what else all contributed in whole or part to the observed phenomenon. I'd love to have whatever data the authors of the paper had, to facet the data by movie studio and country - did different countries peak on different weeks, and the like. Alas, the data consists of the sales and rentals of two anonymous major motion picture studios. That none of these potentially seriously confounding factors were mentioned or explored before reaching for a conclusion is somewhere on the scale between negligence and dishonesty, and the lack of data transparency renders the the paper useful for nothing more than kindling. Any fellow Tartans here on HN (I know there are a bunch of us) want to sign on to a letter requesting an investigation into the integrity of the paper and IDEA?
- L0j1k 14y ago
  Just...... thank you.
- saucetenuto 14y ago
  I'd sign that letter. SCS '06
- nonamegiven 14y ago
  "Personally, I don't pirate movies/music, but as a CMU (SCS + Heinz) alum, the lack of rigor and potential conflicts of interest displayed in this paper are disheartening. More than that, they cheapen the value of my degrees." It's probably also worth writing a letter stating exactly that to your school, your department, and the department involved, as well as a letter to your alum magazine.
dmak 14y ago
"Aggregating these increases, our analysis across 12 countries suggests that, in the 18 weeks following the shutdown, digital revenues for these two studio’s movies were 6-10% higher than they would have been if not for the shutdown. " How can you compare with something that is nonexistent? If they had a control, a timeline with piracy, then this comparison would be valid right? I mean, the effects of 6-10% higher could be just the hottest titles that came out in the summer such as The Avengers, etc...
- anigbrowl 14y ago
  You can compare year-on-year because studios spread their releases to maximize revenue. I'm having problems accessing the site to DL the paper right now but I have a hunch you're arguing with the adstract, not the methods.
HunterV 14y ago
Just from a completely personal viewpoint, I find that in my extended social groups it takes more than a few months for "non geeks" to find a new site to stream/download new illegal content from. It takes more than 18 weeks for the word to get out about a new site and then trickle down to the normal population. The study should be done after at least a year, and not with MPAA funds, duh.
joshka 14y ago
I read the article and have a few questions to the authors: How was the megaupload estimate calculated? Various parts of the article use per week data to measure sales / rental trends, however the megaupload estimate for each country was held constant, given there's a likely correlation (with a potential time lag - i.e people buy stuff on the advice of people that have already seen it and recommended), how would this variation effect the modelling? What sort of measurement error does the google adwords estimate have? How does this effect the model? Are there any factors that might impact the adwords estimate on a per country basis (such as prevelance of use of particular browsers, adblocking plugins, etc.)? How does this effect the model? Do you have year on year data to compare this data with? Do you have any data to show correlation between sales and MPR over time? Does your data differentiate on movies that were available on megaupload before it closed vs those that were released afterwards? How does this effect your model?
youngerdryas 14y ago
I wish HNers got half as upset about pay walled research papers as they do about movies. If your time has no value you can get any film for free, and that will never be stopped. If you are openly profiting from someone else's IP you will get smacked down, until the apocalypse comes, which some would welcome in exchange for free movies.
t4nkd 14y ago
So, using their extremely scientific method, did anyone else experience increased site traffic, or sales? I'm sure we can link other industries who deliver digital goods(software) so the closing of a digital locker site. Correlation === Causation; the pinnacle of statistical research!
- qompiler 14y ago
  One of the authors of this 'paper' is Brett Danaher. He is a member of the SERCI (The Society for Economic Research on Copyright Issues) which directly gets funding from SGAE (Sociedad General de Autores y Editores) which is a large collecting society (copyright collective) for songwriters, composers and music publishers in Spain.
  - t4nkd 14y ago
    So, what you're saying is, the next published paper will be on how Megauploads shutdown has increased the sales of music? I wonder what dinner theatre ticket sales look like over this term, maybe digital piracy is killing the stage!?
y1426i 14y ago
The conclusion seems to be written before the research.

112 points by valgaze 14y ago

There are a few points from this publication that are suspicious: 1. There's no mention of funding sources for this study. 2. It's a small sample size of "two major studios". 3. Most importantly, this study isn't peer reviewed. [1] [1]: http://www.ssrn.com/update/general/ssrn_faq.html http://www.ssrn.com/update/general/ssrn_faq.html

a_bonobo 14y ago
I think one can assume that the funding comes from the IDEA from this sentence: >This research was conducted as part of Carnegie Mellon University’s Initiative for Digital Entertainment Analytics (IDEA). The IDEA is apparently a think-tank to help "groups like MPAA and policymakers [to] navigate the changing digital media landscape."[1] Interestingly, funding for the IDEA has been made possible by "an unrestricted gift from the Motion Picture Association of America." [2] Edit: From one of the author's blog it looks like the study has been submitted for peer review: "The study is currently under peer review at a good econ journal." [3] It seems that the SSRN where this paper is currently hosted is to social sciences and economics as to what arxiv is for natural sciences: a repository for yet unreviewed drafts of papers. [1] http://www.bizjournals.com/pittsburgh/blog/innovation/2012/10/mpaa-teams-with-cmu-to-fund-new-center.html http://www.bizjournals.com/pittsburgh/blog/innovation/2012/1... [2] http://www.techtaffy.com/carnegie-mellon-launches-digital-entertainment-analytics-initiative/ http://www.techtaffy.com/carnegie-mellon-launches-digital-en... [3] http://brettdanaher.wordpress.com/2013/03/12/megaupload-shutdown-increased-sales-of-digital-movies/ http://brettdanaher.wordpress.com/2013/03/12/megaupload-shut...

dude_abides 14y ago

The authors are from a prestigious school, CMU. Still, I was curious to know who funded this research. Alas, not surprisingly, it is MPAA. The CMU lab is called Initiative for Digital Entertainment Analytics (IDEA), and according to CMU's press release "The creation of IDEA was made possible through a gift from the Motion Picture Association of America (MPAA)" http://www.cmu.edu/homepage/society/2012/fall/entertainment-analytics.shtml http://www.cmu.edu/homepage/society/2012/fall/entertainment-... "The MPAA was interested in CMU in part because of our unique strengths in the performing arts, computer science and technology, and management," noted Smith. Looks like MPAA also had something else in mind, when they funded this lab.

maxmcd 14y ago
Not disagreeing, but whenever there is a study posted where the funding comes from a source that has an obvious interest in the outcome of a study there is always a comment like this one pointing out the conflict. I understand providing information beyond that would be likely very difficult, but having never been in a similar research situation, could someone outline what this influence is like? If there an underlying pretense during the research that they have to reach a specific outcome? Is it more subtle/obvious? Any additional insight would be appreciated.
- dude_abides 14y ago
  I became suspicious because the writing style of this paper was very superfluous, yet the conclusions were very strongly worded. Here is an example in the very first page: for each additional 1% pre-shutdown Megaupload penetration, the post-shutdown sales unit change was 2.5% to 3.8% higher, suggesting that these increases are a causal effect of the shutdown. This does not suggest causality. You need more rigorous inductive reasoning, and randomized trials, if you want to conclude causality. Edit: Just found out that SSRN is not even a peer reviewed journal! ( http://www.ssrn.com/update/general/ssrn_faq.html#no_paper_sub http://www.ssrn.com/update/general/ssrn_faq.html#no_paper_su... )
  - andrewfelix 14y ago
    I agree it would be hard to draw sound conclusions from the study. The changes probably aren't even outside variability. But are these the claims really that outrageous? ie. The biggest piracy site in the world has a slight effect on sales?
    - drucken 14y ago
      It is meant to be a scientific study. What's the use of an unsubstantiated claim? In fact, its been proven to be highly counterproductive (at least in other fields) as others go on to build works and further claims around it, only to later discover the errors and depth of uncertainties. Using the same principle, I could posit (probably quite defensibly), that the amount of alleged copyright infringment of Megaupload Limited's limited access and centralized services would be dwarfed by that from Bittorrent and other P2P methods.

waterlesscloud 14y ago

Is it really so far-fetched that closing down a major piracy site would increase legitimate downloads by 4-6%?

salman89 14y ago
Not so far-fetched, but I do feel that it will be very difficult to have conclusive evidence to prove as such.
tptacek 14y ago
Yes. It is IMPOSSIBLE TO BELIEVE.
- badgar 14y ago
  We all know that piracy increases sales, if anything, because [personal story about buying something].
  - ihuman 14y ago
    [Reference to gaming legend agreeing with this]
    - anigbrowl 14y ago
      [Snooty takedown wrapped in silky false humility]
      - L0j1k 14y ago
        [comment about doing it better in haskell]
andrewfelix 14y ago
No. Quite interesting looking at the comments here furiously looking for flaws in the study. If the results had found the opposite, I doubt the study's legitimacy would have been so vigorously questioned.

jared314 14y ago

Brett Danaher: http://scholar.google.com/citations?user=w7W3zn0AAAAJ&hl=en&oi=ao http://scholar.google.com/citations?user=w7W3zn0AAAAJ&hl... Michael D. Smith: http://scholar.google.com/citations?user=rzPlMfQAAAAJ&hl=en&oi=ao http://scholar.google.com/citations?user=rzPlMfQAAAAJ&hl... From the paper: Our [Megaupload] Internet penetration data is based ... Google AdWords estimates of the total number of unique visitors ... [and] ... the total number of Internet users in each country in our sample... As such, the shutdown of Megaupload influenced the policies of several other cyberlockers focused on piracy, and our results necessarily measure the “net impact” of the Megaupload shutdown across the cyberlocker industry, as opposed to just measuring the impact of Megaupload.

wizawuza 14y ago

Anyone that read the 26 pages (sorry, I'm lazy), can you comment on whether they take into account timing of releases? In other words, if the best and biggest movies come out right after the shutdown, sales could have increased due simply to that.

anigbrowl 14y ago
I can't access the site right now (HN effect??) but it would be surprising if they didn't, given the widespread understanding of release scheduling within and without the industry. Whole books are written about release timing, and the film industry supports two daily trade newspapers, whose economic analysis is as sophisticated as those in any other industry.

DigitalSea 14y ago

This is most certainly not a biased funded study with links to the MPAA guys. Without-a-doubt it is definitely an independent study performed by real people with no links to the entertainment industry. Now if you'll excuse me guys I'm just going to go to the cinema to watch a $30 per ticket blockbuster movie because the entertainment industry needs our support. I'll be back later. Definitely not suspicious!

fragsworth 14y ago
If piracy didn't actually cost the entertainment industry anything, wouldn't you think they would stop wasting any money trying to prevent it? I would assume they'd try to be fairly objective with this study, because they'd be very happy to discover that piracy is a good thing for them.
- chaostheory 14y ago
  Well the RIAA still firmly believes that litigation is what slowed down music piracy. However in reality it was probably the advent of easy to use and cheap (or even free) music streaming services that really hurt music piracy.
- bluedanieru 14y ago
  Large corporations are rarely driven by profit, but rather petty political bullshit and personal crusades.
- vacri 14y ago
  On favourite tactic of the movie houses is to report on decline in US domestic sales (and they are, or at least were last year), but report on piracy globally. They don't report on global sales, because they're raking it in.
  - anigbrowl 14y ago
    Half-true. Foreign distributors get a large cut of that on a hit, but lots of films don't play to a foreign audience while still suffering from the decline in domestic sales. Said decline hits theaters and the people who work there, who are not subsidized by a film's overseas profits.

tudorconstantin 14y ago

Assuming that the 5% increase in sales is real - I wonder if the total costs invested in lobbying, bribering politicians to create favorable laws and all the anti piracy pr campaigns are worth it in the end

deleted 14y ago
[deleted]
waterlesscloud 14y ago
VERY rough ballparking to follow. Call it 200,000 digital sales per week total, 350,000 digital rentals total. That's for 2 studios, so let's multiply by...I dunno, 4 sounds good to account for the other distributors (this might be way off). So 800,000 sales, 350,000 rentals. Say the sales net an average of 8 bucks per sale and the rentals 2 bucks each. I made these numbers up, but they match my ancient retail experience. So that's 6.4 million in sales and 700,000 in rentals per week. Times 52 and that's 333 million in sales, 36 million in rentals. So, call it 370 million total for a year. So 5% is 18.5 million. Be generous since we're ballparking and call it $20 million. Hmm. Digital alone would probably be a close call. But factor in dvd/bluray and theatrical and it would certainly be worth doing. EDIT- I didn't do too bad! http://latimesblogs.latimes.com/entertainmentnewsbuzz/2011/02/online-movie-downloads.html http://latimesblogs.latimes.com/entertainmentnewsbuzz/2011/0... says in 2010 the digital market for movies was $385 million. But then tv was an additional $366 million, so double that $20 million estimate to $40 million. And it's going to grow fast.

DanBC 14y ago

> Governments spend resources in order to win court cases against such sites and to mount shutdown operations. Why, if there is no criminal offence, are governments getting involved? Why aren't the rights holders (who claim to be the ones losing money) suing for lost earnings?

zacharyvoase 14y ago

It says that they analysed 12 countries. Is it possible that they selected these countries specifically, and rejected others that may have refuted their hypothesis? I'm trying to say this with as little judgement as possible. I just know that deciding to look only at certain countries to support a hypothesis has been done before (c.f. Ancel Keys's Seven Countries Study).

andrewfelix 14y ago
They were looking at data from two major studios. I assume those studios had good penetration/data for those particular countries.
- lessnonymous 14y ago
  I am concerned that the MPAA, in commissioning the study, provided the researchers with data from two studios who saw a big lift in sales in the period following the shutdown. I've not read the paper so I've no idea if this is an issue or not, but only using the data of two studios seems to be a low sample size. Imagine if the week after the shutdown "Lord of the Rings" was released, or "Twilight", or any other blockbuster. Find two studios with big releases in the period after the shutdown and it looks like some significant causation.
  - sambe 14y ago
    Is it completely unreasonable to also suggest that they would simply manipulate the data? I know, it's a strong claim without evidence. However, I'm under the impression that sales figures are routinely manipulated for other reasons, and it definitely wouldn't be beyond these companies morally-speaking to do so here.
  - TheCapn 14y ago
    "Our sales data are provided by two major U.S. movie studios and include all digital purchases and rentals through their major digital channels aggregated at a weekly level from September 2, 2011 until May 31, 2012. These data include each of the 12 countries where these digital channels were available as of September 2011." Quote from page 8 of the paper (First paragraph of section 4 if you care to look it up in context). My concerns are that (1) the study was funded by the same individuals who provide the data showing immediate conflict of interest and (2) the data does not span a 12 month spread. So even though they claim to make consideration for seasonal attributes like Christmas sales we don't have a full data set to know if the rise/fall pattern they display is typical for this timeframe. The release of "summer blockbusters" or other studio phenomenon cannot be compared to the data unless we have data spanning multiple years to know when peak seasons of sales are. Heck, a third issue is their lack of physical sale data. So although they have source showing digital piracy to digital sale correlation is likely it doesn't account for digital adoption of newcomers to the market.

iambibhas 14y ago

6-10% increase should be the normal sales amount variation, right? Any given month/week, this much of variation can occur without any reason.

Evbn 14y ago
That's why multiple data points are used.
- AnthonyMouse 14y ago
  There was only one shutdown. That isn't multiple data points. They could be measuring the effect of anything that occurred during the same time period as the shutdown: The recovering economy, which specific films were new releases during that period of time, the popularity of other goods or activities that serve as substitutes for movies during that period of time, the weather, etc. To get multiple data points you need multiple events.

nextstep 14y ago

Even if the result of this study is accurate, the point is irrelevant. Piracy cannot be stopped, and eventually free methods of consuming content will become so prevalent that content creators will be forced to adopted entirely new business models. I don't believe there will ever be a silver bullet that can block piracy; DRM schemes will only serve to ruin the experience for paying customers, while free, pirated alternatives will continue to proliferate and present better and better user experiences. Perhaps a revenue model based solely on product placement could work, but most likely entirely new business models that haven't yet been dreamt up will resurrect entertainment for profit. Perhaps digital sales will serve purely to advertise performances or other tangible art experiences. Regardless, I imagine the entertainment industry will look vastly different in 10-15 years.

anigbrowl 14y ago
eventually free methods of consuming content will become so prevalent that content creators will be forced to adopted entirely new business models ...or just exit the market and do something else. Musicians can play live; that doesn't work very well for film directors or actors. Sure, there's the theater, but but the size of the audience you can play to is limited to the distance within which actors can be easily seen and heard. You can't really stage a play in a stadium the way you can stage a music event. Perhaps a revenue model based solely on product placement could work Producers and screenwriters already make the most of their opportunities there. It's possible, up a point; if I'm writing a script based in the 19th century I can look for some premium brands with a long legacy for placement or cross-promotion opportunities (you'd be surprised how many there are). But that won't work for earlier periods, science-fiction, or contexts that brands typically prefer not to be associated with, like war movies or stories with gloomy themes. Entirely new business models are pretty thin on the ground. 'Make something and charge admission to people who want to see it' has been around for a while. The latest attempt is the current crop of 3d movies, since that doesn't really work on the sofa, but it's a big increase in production costs for relatively little box-office gain.
snowwrestler 14y ago
It's easy to hand wave about "new business models" without being specific. If you know of a better way to create a profitable media business, why not go out and eat the incumbents' lunch?

caublestone 14y ago

Does this study account for the fact that 2011 was the worst year for movies (in terms of quality) ever? Look at the academy award winners and the top box office performers of that year and compare it to 2012. Side note: I would like to see a study on the quality of movies in 2011 vs 2008 based on economies 3 years previous. So when movies were getting funding in 2005 for release in 2008, we got some real gems. In 2008, when the economy took a down-turn, we see some bad ones in 2011. http://boxofficemojo.com/yearly/chart/?yr=2011 http://boxofficemojo.com/yearly/chart/?yr=2011 http://en.wikipedia.org/wiki/84th_Academy_Awards http://en.wikipedia.org/wiki/84th_Academy_Awards http://boxofficemojo.com/yearly/chart/?yr=2012&p=.htm http://boxofficemojo.com/yearly/chart/?yr=2012&p=.htm http://en.wikipedia.org/wiki/85th_Academy_Awards http://en.wikipedia.org/wiki/85th_Academy_Awards

sturadnidge 14y ago
Exactly this. The 'study' hasn't controlled for anything. There precisely no discussion of the weather (the summer months are suspiciously absent from the data set, nor the weather patterns commented on - Sydney, Australia had one of the wettest summers on record over 2011/2012), the economies of the countries involved, let alone a year over year data comparison. The only thing "gone in 60 seconds", is the credibility of the authors of this study.

mtgx 14y ago

Says the research lab with "unlimited" funds from MPAA. Okay.

jowiar 14y ago

Personally, I don't pirate movies/music, but as a CMU (SCS + Heinz) alum, the lack of rigor and potential conflicts of interest displayed in this paper are disheartening. More than that, they cheapen the value of my degrees. One of my big pet peeves in data analysis is making major inferences and broad, sweeping statements based on a very small sample size. This paper appears to be a prime offender. Looking at this case, there's a pretty good argument that Netflix and the LoveFilm app launching in the UK, QuickFlix Streaming launching in New Zealand, The Artist (with a French director and star actor) getting a lot of attention and being released to rental, a particularly chilly winter in western Europe, and god knows what else all contributed in whole or part to the observed phenomenon. I'd love to have whatever data the authors of the paper had, to facet the data by movie studio and country - did different countries peak on different weeks, and the like. Alas, the data consists of the sales and rentals of two anonymous major motion picture studios. That none of these potentially seriously confounding factors were mentioned or explored before reaching for a conclusion is somewhere on the scale between negligence and dishonesty, and the lack of data transparency renders the the paper useful for nothing more than kindling. Any fellow Tartans here on HN (I know there are a bunch of us) want to sign on to a letter requesting an investigation into the integrity of the paper and IDEA?

L0j1k 14y ago
Just...... thank you.
saucetenuto 14y ago
I'd sign that letter. SCS '06
nonamegiven 14y ago
"Personally, I don't pirate movies/music, but as a CMU (SCS + Heinz) alum, the lack of rigor and potential conflicts of interest displayed in this paper are disheartening. More than that, they cheapen the value of my degrees." It's probably also worth writing a letter stating exactly that to your school, your department, and the department involved, as well as a letter to your alum magazine.

dmak 14y ago

"Aggregating these increases, our analysis across 12 countries suggests that, in the 18 weeks following the shutdown, digital revenues for these two studio’s movies were 6-10% higher than they would have been if not for the shutdown. " How can you compare with something that is nonexistent? If they had a control, a timeline with piracy, then this comparison would be valid right? I mean, the effects of 6-10% higher could be just the hottest titles that came out in the summer such as The Avengers, etc...

anigbrowl 14y ago
You can compare year-on-year because studios spread their releases to maximize revenue. I'm having problems accessing the site to DL the paper right now but I have a hunch you're arguing with the adstract, not the methods.

HunterV 14y ago

Just from a completely personal viewpoint, I find that in my extended social groups it takes more than a few months for "non geeks" to find a new site to stream/download new illegal content from. It takes more than 18 weeks for the word to get out about a new site and then trickle down to the normal population. The study should be done after at least a year, and not with MPAA funds, duh.

joshka 14y ago

I read the article and have a few questions to the authors: How was the megaupload estimate calculated? Various parts of the article use per week data to measure sales / rental trends, however the megaupload estimate for each country was held constant, given there's a likely correlation (with a potential time lag - i.e people buy stuff on the advice of people that have already seen it and recommended), how would this variation effect the modelling? What sort of measurement error does the google adwords estimate have? How does this effect the model? Are there any factors that might impact the adwords estimate on a per country basis (such as prevelance of use of particular browsers, adblocking plugins, etc.)? How does this effect the model? Do you have year on year data to compare this data with? Do you have any data to show correlation between sales and MPR over time? Does your data differentiate on movies that were available on megaupload before it closed vs those that were released afterwards? How does this effect your model?

youngerdryas 14y ago

I wish HNers got half as upset about pay walled research papers as they do about movies. If your time has no value you can get any film for free, and that will never be stopped. If you are openly profiting from someone else's IP you will get smacked down, until the apocalypse comes, which some would welcome in exchange for free movies.

t4nkd 14y ago

So, using their extremely scientific method, did anyone else experience increased site traffic, or sales? I'm sure we can link other industries who deliver digital goods(software) so the closing of a digital locker site. Correlation === Causation; the pinnacle of statistical research!

qompiler 14y ago
One of the authors of this 'paper' is Brett Danaher. He is a member of the SERCI (The Society for Economic Research on Copyright Issues) which directly gets funding from SGAE (Sociedad General de Autores y Editores) which is a large collecting society (copyright collective) for songwriters, composers and music publishers in Spain.
- t4nkd 14y ago
  So, what you're saying is, the next published paper will be on how Megauploads shutdown has increased the sales of music? I wonder what dinner theatre ticket sales look like over this term, maybe digital piracy is killing the stage!?

y1426i 14y ago

The conclusion seems to be written before the research.