Contrary to the claims of the movie industry, researchers from the University of Minnesota and Wellesley College concluded that there is no evidence that BitTorrent piracy hurts U.S. box office returns, as reported by TorrentFreak. They did find, however, that there is a link between illegal movie downloads and movie revenue in international markets, which the researchers attributed to long release windows.
The paper, titled "Reel Piracy: The Effect of Online Film Piracy on International Box Office Sales," hypothesized that international movie revenue losses due to piracy are directly linked to the sometimes long delay between U.S. and foreign movie premieres. According to the study, international box office revenues will be impacted by piracy more significantly the longer it takes for a movie to be released in that market.
“We find that longer release windows are associated with decreased box office returns, even after controlling for film and country fixed effects. This relationship is much stronger in contexts where piracy is more prevalent: after BitTorrent’s adoption and in heavily pirated genres,” the researchers wrote in the paper. “Our findings indicate that, as a lower bound, international box office returns in our sample were at least 7% lower than they would have been in the absence of pre-release piracy.”
In contrast to these findings, the researchers reported that this negative effect of BitTorrent movie piracy does not extend to the domestic box office. “We do not see evidence of elevated sales displacement in US box office revenue following the adoption of BitTorrent, and we suggest that delayed legal availability of the content abroad may drive the losses to piracy,” the researchers wrote.