Copyright Bombshell: New Study Finds Megaupload's File-Sharing Supported Box Office
By Staff News & Analysis - November 26, 2012

A new paper suggests that box office revenues were negatively impacted after the shutdown of Megaupload. The dip in revenues was most visible for average size and smaller films. According to the researchers this may have been caused by the loss of word-of-mouth promotion by people who used the popular file-hosting site to share movies. For blockbuster movies the Megaupload shutdown had the opposite effect. In common with every file-sharing service, Megaupload was used by some of its members to host copyright-infringing movies. For this reason the MPAA was one of the main facilitators of the Megaupload investigation, which ultimately led to the shutdown of the company in January. The movie industry was quick to praise the government's actions, but a new report suggests that Megaupload's demise actually resulted in lower box office revenues. – Torrent Freak

Dominant Social Theme: Copyright infringement steals the very bread out of the artist's mouth.

Free-Market Analysis: It is common knowledge that if one copies intellectual property, one is stealing. Only crazy libertarians and crackpot anarchocapitalists would ever adopt a belief that helping oneself to intellectual property was not a criminal offense.

But now it looks like such loony crackpots may indeed have a point. Criminalizing copyright may actually have an adverse effect on media distributon. It's actually a fairly sane theory. The idea is that one can steal a chair or table but not an idea. A poem is not a chair. A tune is not a table.

There are other interpretations, of course. But it is only "artists" in this day and age that insist (via the West's judicial system) on receiving pass-through revenue.

When people do not pay said royalty, the idea goes, the artist is being deprived of rightful wealth. Pretty simple, eh? Or maybe not. Maybe selective "thievery" has its place, after all. Here's some more from the article excerpted above:

Researchers from Munich School of Management and Copenhagen Business School published a short paper titled "Piracy and Movie Revenues: Evidence from Megaupload." The study analyzes weekly data from 1344 movies in 49 countries over a five-year period, to asses the impact of the Megaupload shutdown on movie theater visits.

The researchers theorize that some films may actually benefit from piracy due to word of mouth promotion, and their findings partly support this idea.

Comparing box office revenues before and after the Megaupload raids shows that overall box office revenues went down. The effects are small, but consistent across different sample designs when taking into account factors such as inflation, Internet penetration and the popularity of Megaupload in each country.

"In all specifications we find that the shutdown had a negative, yet in some cases insignificant effect, on box office revenues," the researchers write.

The researchers therefore believe that their findings may support the notion that piracy can act as promotion. Those who pirate movies may talk about them to friends, who unlike them do pay for movie tickets.

"Our counter-intuitive finding may suggest support for the theoretical perspective of (social) network effects 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," they write.

We've written quite a bit about both copyright and the shutdown of Megaupload. Megaupload was a company located in New Zealand that was accused by Hollywood of encouraging downloads of movies and songs without making appropriate royalties available.

The US finally sent a squad of FBI agents halfway around the world to illegaly confiscate Megaupload's file servers, incarcerate Megaupload founder Kim Dotcom and freeze and impound the assets of the company.

Many observers found this shocking because Kim Dotcom lost his company and his millions without ever being convicted in a court of law. Ultimately, much of what happened to Dotcom was deemed illegal by New Zealand courts and the resulting litigation has yet to be sorted out.

The issue of copyright itself is contentious, as we have reported in a number of past articles. There is a historical interpretation that claims copyright was not created hundreds of years ago to legally enrich artists but actually to slow the spread of printed information – after the advent of the Gutenberg press.

English copyright was especially onerous, while German copyright was less draconian. As a result, according to certain historical interpretations, German culture expanded more rapidly than British culture. A golden age of German literature, philosophy and painting resulted from lagging copyright enforcement.

In Britain, energetic copyright enforcement enriched publishers but had a deleterious effect on the larger society. For this reason, according to certain historical interpretations, England went to war with Germany twice, to reduce Germany's knowledge base and intellectual and industrial edge.

The power elite that evidently and obviously wants to control the world is intent once more on enforcing powerful copyright sanctions to slow the spread of what we call the Internet Reformation. The information on the Internet is damaging to elite dominant social themes.

These themes seek to frighten middle classes into giving up power and wealth to specially created globalist facilities that are providing the underpinnings of global governance.

When it comes to copyright itself, the obvious elite meme is that copyright infringement is stealing. A subdominant social theme would be that intellectual property is different from – and superior to – physical objects created with the sweat of one's brow. Only intellectual property is eligible for revenue-in-perpetuity.

The raid on Megaupload created a massive amount of 'Net controversy that has yet to die down. The evidence that pilfering copyrighted movies and songs and placing them in Megaupload electronic lockers did not harm the artists or products in question is bound to ignire further vehement discussion.

We don't anticipate that much of this wil be covered in the bought-and-paid-for mainstream press. But US officials are already reeling from adverse court rulings in New Zealand. Now the very heart of the case has been attacked. Megaupload's support – knowing or not – of copyright infringement might actually have had a beneficial effect.

It should be pointed out that Megaupload did everything that could be expected of a vendor in its position. Its workers warned users not to view copyrighted material without paying for it and actually shut down accounts when it discovered that copyright was being contravened. In fact, the Megaupload case is fraught with so many contradictions and so much law enforcement bullying that it is hard to see how Dotcom and Megaupload can be convicted in an impartial venue.

Of course, the elites behind this raid do not intend to conduct a fair trial. They intend to use Megaupload as a cautionary example to ensure that copyrighted material is not traded or traduced.

But the real reason is likely because the elites – as before – wish to slow the spread of information on the Internet and to make people afraid of passing on relevant facts about how the World Really Works and how much is actually "directed history" – predetermined results intended to build one-world government.

After Thoughts

For this reason, we predict that the idea that copyright infringement is actually beneficial to products and artists won't gain much traction in the mainstream press. But you read about it here … and elsewhere in the alternative media.