MegaUpload shutdown bad for the Box Office business?

The resounding MegaUpload shutdown is almost history, Kim Dotcom is waiting to start a new (seemingly) legit business with its Mega service and researchers are now trying to understand what kind of impact (if any) the end of one of the most popular file sharing services on the Internet had on the entertainment business.

A new paper coming from European researchers is in particular focused on the film industry, being the Motion Picture Association of America (MPAA) one of the most powerful organizations behind the MegaUpload demise.

The paper analyzes data about 1,344 films in 49 different countries and their corresponding performances in theatres over a five-year period, highlighting the audience differences before and after the MegaUpload shutdown.

The researchers state that the file sharing service demise did in fact had a noticeable (negative) effect on the box office revenue, even though different types of entertainment reacted in different (opposed) ways to the pivotal event: blockbusters, Hollywood-type films went up, while smaller products were negatively impacted by the shutdown.

“Our counter-intuitive finding may suggest support for the theoretical perspective of (social) network effects”, the researchers write, “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 “word of mouth” promotion theory is in fact true, the paper suggests, and the overall film industry lost a sizeable amount of money because of the MegaUpload shutdown.

Source: TorrentFreak

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