NBER Study proposes counter-intuitive correlation between video quality and piracy

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A study published by the National Bureau of Economic Research, written by researchers from the University of British Columbia and Eastern Michigan University found that, by modeling motion picture and online piracy data, high-quality illegal copies of movies made available through pirate channels during the movie’s launch phase could actually result in positive impact on revenues for legal viewing.

Later in the movie’s life-cycle, post-launch, higher-quality movies were found to have a negative impact on revenues.

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Source: NBER

Why it matters

The possibility that high quality illegal copies of movies could drive revenue through legal distribution channels at the time of a movie’s release seems counterintuitive: “If I have a high-quality copy, why pay to see it?”

Also, once a high-quality copy finds its way into the piracy distribution ecosystem, it’s not likely that it could somehow be taken out of distribution.

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