MPAA slams study finding Megaupload’s closure hurt films’ revenue

Megaupload founder Kim Dotcom has been charged by the U.S. Justice Department with copyright infringement. Above, Dotcom in custody in New Zealand in January.
(David Rowland / EPA)

Hollywood’s chief lobbying group is taking issue with some academic research suggesting that the shutdown of popular file-hosting website Megaupload has hurt some movies’ box-office revenues.

Researchers at the Munich School of Management and the Copenhagen Business School recently posted a two-page summary concluding that the closing of Megaupload in January had a negative effect on box-office revenues of some movies, particular independent films that may benefit from the exposure to file-sharing sites.

“The information-spreading effect of illegal downloads seems to be especially important for movies with smaller audiences,” the authors wrote in an abstract published on the Social Science Research Network. The findings were seized on by some bloggers and opponents of efforts to shut down websites offering illegal downloads of movies and TV shows.


But Julia Jenks, head of research at the Motion Picture Assn. of America, said the findings were “flimsy” and relied on a questionable methodology, including comparing the performance of movies before and after Megaupload was closed. Among other things, Jenks said, the report failed to account for various factors that affect box-office performance, including audience taste.

“It is impossible to evaluate the validity of the approach or the reliability of the conclusions based on the abstract, which does not fully present the methodology or results of the study,” Jenks wrote. “In fact, in its present form, this abstract raises more questions than answers.”

The U.S. Department of Justice shut down New Zealand-based Megaupload in January and charged its founder, German Internet entrepreneur Kim Dotcom, with copyright infringement. Dotcom, born Kim Schmitz, has denied wrongdoing and is fighting attempts to extradite him to the United States.


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