The study finds that Megaupload’s disappearance benefited blockbuster movies — fewer people downloading the biggest films illegally meant more tickets sold at the box office. But the picture for all of the other, non-blockbuster, films was more complex. Megaupload’s shutdown appears to have actually decreased box office revenues for a wider category of non-blockbuster films.
The researchers speculate that less popular films may have suffered from Megaupload’s disappearance because fewer illegal downloads meant less word of mouth promoting good but lesser-known films. Put another way, there are lots of people who don’t engage in illegal downloading, but who hear about less popular films from those who do. Cut off the illegal downloads, and you cut off a potentially significant source of promotion. Which means that it’s possible — although it is important to understand that this study does not offer definitive proof — that illegal downloading is, on net, a benefit for at least those (many) films that don’t enjoy the sort of marketing budget that Hollywood devotes to Transformers 3.
So, what does this all mean? It’s another example of how the effects of illegal copying are much more subtle than we are willing to acknowledge. Some movies are hurt by illegal filesharing. Other movies benefit. That may not change your views on the ethics of filesharing. But it does raise the question why the United States government is spending what will eventually likely amount to tens of millions of taxpayer dollars to prosecute Megaupload impresario Kim Dotcom. If this study has the picture right and filesharing does not appear to impose big social harms, should filesharing be an area of criminal prosecution by the U.S. government? Or should it be left to Hollywood to sort out through civil lawsuits?