Simon Collins

Simon Collins is the Herald’s social issues reporter.

Dotcom's shutdown good for US studios

Hollywood film studios claim to have gained from MegaUpload shutdown.
Hollywood film studios claim to have gained from MegaUpload shutdown.

Two Hollywood film studios may have gained more than an extra $1 million a week from paid legal downloads of their movies after last year's shutdown of Kim Dotcom's MegaUpload websites, a new study has found.

The study, by Carnegie Mellon University's Initiative for Digital Entertainment Analytics (Idea), estimates that the MegaUpload shutdown in January last year boosted the two studios' revenues from online movie sales and rentals by 6 to 10 per cent over the subsequent 18 weeks.

Based on average prices of US$15 ($18) for each online purchase and US$4.50 ($5.44) for each rental, the shutdown lifted the two unnamed studios' online revenue by between US$1.1 million ($1.3 million) and US$1.9 million ($2.3 million) a week across the 12 countries where the studios had digital sales channels.

The estimated revenue gains provide the first solid data pointing to how much revenue the studios may have lost while MegaUpload existed, allowing users to upload copies of movies to the website and share links enabling other people to download them free.

New Zealand police arrested MegaUpload founder Kim Dotcom and other executives in a helicopter raid on his Coatesville mansion north of Auckland in response to a charge of aiding copyright infringement issued by a US grand jury. At its peak MegaUpload accounted for 4 per cent of worldwide internet traffic.

The new study contrasts with one by German and Danish researchers last October which found that the MegaUpload shutdown actually reduced box office revenue for a majority of 1344 movies across 49 countries, because it reduced the amount of information-sharing about the films. However, that study also found that the shutdown boosted box office sales for "blockbusters", which everyone knew about without needing to swap information.

Telecommunications Users Association of NZ chief executive Paul Brislen said he did not trust the study because it was based on data from the two anonymous film studios, which were "world-famous for their accounting practices".

Idea was established last October with "an unrestricted gift" from the Motion Picture Association of America.

- NZ Herald

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