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February 2019
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Movie Torrents Shown To Actually Boost Box Office Sales For Post-Release Movies

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With what is now many, many years covering issues of piracy and intellectual property, it will come as no surprise to you that we've specifically dived into the intersection of copyright infringement and the film industry over and over. What is something of a counter-intuitive notion, however, is that we also have a decade-long post history pointing out that, despite all the fear-mongering about how piracy is killing the movie industry, box office records keep getting broken on the regular. The easy point to make is that obviously piracy is not killing the film industry, given how many movie tickets are being sold. But perhaps, according to a recent study, we should have gone one further and explored whether box office records were being broken in part because of piracy.Researchers from the University of Houston and Western University dug into the effect of The Pirate Bay's offline status in part of 2014 and came away with some surprising findings.

Movies shared on The Pirate Bay are the main focus. The researchers use the Pirate Bay downtime following the 2014 raid to measure its impact on word-of-mouth promotion and box office revenues.Based on a sample of hundreds of movie torrents and data from most popular movie review sites, Lu and his colleagues estimated this effect. Their results are rather intriguing.
And, as you might expect, those results are also more nuanced than either "Piracy bad!" or "Piracy fine!" mantras. Instead, the research suggests that having pirated copies of a film prior to release has a definite negative impact on box office numbers. But, importantly, the opposite is true when a film is made illicitly available after release.
This changes when the researchers look at post-release piracy. That is, piracy which occurs after a film has premiered at the box office. In this case, there’s a positive effect on box office revenue through an increase in word-of-mouth promotion (WOM).“We find that the volume of online WOM mediates the impact of piracy on the box office. Based on counterfactual simulations, the WOM-effect from post-release piracy on the box office increases revenue by about 3.0%,” they write. In other words, when The Pirate Bay went down, box office revenue dropped as well. This effect is significant and not linked to seasonal changes, as it wasn’t there in previous years. The positive effect is strongest during the beginning of a movie’s release and differs per genre.  Action movies, comedies, and thrillers, benefit more from a positive piracy “buzz” than dramas, for example.
So what does this mean? Well, for starters, it means that the MPAA's myopic notion that piracy is always bad, full-stop, is refuted by the data. Instead, the data suggests that movie studios could make very good use of piracy in the right circumstances, or at the very least they could focus their enforcement efforts only in the areas where piracy appears to cause actual harm, rather than where it helps sales numbers. This would be the logical course to take, given that post-release piracy appears to be a boon to box office revenue.
“Pre-release piracy can have a substantial negative effect, in our data this overwhelms the positive effect we look at. That is, the overall effect of piracy is still negative,” Lu tells us.That said, there is an interesting lesson to be learned. Based on this study, copyright enforcement should be mainly targeted on early leaks. If these are dealt with, the main problem is ‘gone.’“Our findings suggest approaches to target scarce anti-piracy resources, such as focusing on tackling damaging pre-release piracy,” the researchers write.
Makes sense. Hollywood, however, has never shown itself to be capable of this kind of nuance. Instead, sledgehammers are preferred over more precise approaches, with lobbying power dedicated to broad policy statements that apparently would at least in part be a detriment to sales revenues. And if that isn't stupid, I don't know what is.

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Interested In Helping Advance Tech Policy In The Right Direction? Here's An Amazing Opportunity

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There are a few common themes around Techdirt: (1) the lack of tech understanding among people crafting policy these days, and (2) our general annoyance at the cynics who insist there's nothing to be done to stop bad policy making. Well, here's an opportunity to actually do something, and to help be in a position to craft better, knowledgeable tech policy. The Aspen Institute recently launched a new Aspen Tech Policy Hub out here in the Bay Area, with a program designed to "train the next generation of policy entrepreneurs." The approach they're taking is a good one. I've complained many times in the past that the way that most DC folks try to "bridge the gap" between tech and policy is to come out to Silicon Valley and wag their fingers at annoyed entrepreneurs and technologists, lecturing them on how they need to care about policy -- when so many of those entrepreneurs and technologists believe the answer is just for policymakers to "stay out of the way."Of course, if anything has become clear over the last few years, it's that folks in DC (and Brussels and lots of other places) have no interest or intent in staying out of the way, and much of the rest of the world also wants them to get more and more engaged in directing and regulating technology. And if that's going to happen, we'd all be a lot better off if the folks making the decisions actually knew what the hell they were talking about.That brings us to the new Fellowship Program that the Aspen Tech Policy Hub is launching. They're comparing it to a startup incubator like Y Combinator, but for getting technologists and entrepreneurs (and journalists) up to speed on tech policy.

Incubator fellows will spend a minimum of 2 months with us for mandatory programming in summer 2019, from early June to mid-August 2019. The fellowship is tentatively scheduled for June 10 through August 9, 2019. The exact start date for this pilot cohort is still tentative based on space availability and fellow scheduling....This is an intense, full time program, and we expect fellows' full attention while they are participating. Fellows will be paid a stipend of $7,500/month for 2 months to defray their living costs in the Bay Area, with an option to apply for a 3rd month of stipend funding if the fellow is available to remain in residence for an additional month after formal programming concludes. (We will provide office space, but fellows will need to find their own housing if they are not already local.) We also have limited funds to assist with relocation to the Bay Area if needed. So long as space is available, fellows are eligible to continue to work out of our facility for an additional three months free of charge, through November 2019.During residence, fellows will be required to create at least one practical policy outputfor instance, mock legislation, toolkits for policymakers, white papers, op-eds, or an app. Fellows have to propose a possible project in their application for the fellowship, but they are not tied to working on that project once in residence. In fact, we encourage fellows to work together to identify new ideas for projects on arrival.
I have no association with the organization. I just think it's a great program concept. The tech policy world is quite small, and right now the vast majority (though certainly not all...) of the people who end up in that world tend to be lawyers, rather than technologists and entrepreneurs. Nothing against the lawyers, but the tech policy world could use some other perspectives as well. So if you've always complained about dumb policy makers and you're actually interested in breaking through the cynicism and actually doing something, check out the program and apply.

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