Delays in International DVD Releases Lead to Increased Piracy

Carnegie Mellon University’s Initiative for Digital Entertainment Analytics released a report that establishes a link between delays in international DVD releases and piracy. Delays hurt aftermarket sales, which often account for the lion’s share of a movie’s revenue, mainly because it opens the door for piracy. Although artificial delays may help movie theaters maximize their revenues, minimizing or eliminating “unneeded delays” is an important consideration, says the report.

TorrentFreak notes that, “pirates can often get their hands on a high quality rip of a movie before the DVD is officially released in their country.” Carnegie Mellon researchers examined this “window of opportunity” for pirates and, using real-world data, studied “to what degree the availability of pirated movies during international release delays impact subsequent sales.”

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The result was that they found “a clear positive relation.” “Our results suggest that an additional 10-day delay between the availability of digital piracy and the legitimate DVD release date in a particular country is correlated with a 2-3 percent reduction in DVD sales in that country,” says the report.

With the Internet, a pirated movie can be shared globally within seconds, the report notes, so delays “do more harm than good.” The research also found that longer delays aren’t problematic in and of themselves, but only if it results in a longer “piracy window.”

Sales drops are “proportional to piracy levels in a country.” For example, Spain experiences movie piracy at “about six times larger” than in other countries. The report states that, for Spain and Italy, “we observe a 10 percent drop in sales for every 10-day delay in legal availability, as compared to a 2 percent drop in sales for every 10-day delay in the entire sample.”

Researchers suggest that, in addition to going after pirates, Hollywood can “tweak its own business strategies to target the problem.” According to the report, shorter delays “may have positive spillover effects in the form of reduced piracy in the DVD window.” Carnegie Mellon University’s Initiative for Digital Entertainment Analytics receives “significant funding” from the MPAA, but the researchers state that their work is independent of that organization.