There are two main hypothesized effects from movie piracy: a cannibalization effect which reduces legitimate sales, and a promotional effect which increases word-of-mouth and stimulates sales. While these two effects are commonly discussed, there has been no research to measure their relative impact on motion picture sales. In this paper we use a hidden Markov model adapted from MOVIEMOD to decompose, and separately measure, the cannibalization and promotional impacts of piracy.
Attachments
The Dual Impact of Movie Piracy on Box-Office Revenue: Cannibalization and Promotion
Michael D. Smith is a Senior Adjunct Fellow at Technology Policy Institute. He is also a Professor of Information Systems and Marketing and the Co-Director of IDEA, the Initiative for Digital Entertainment Analytics at Carnegie Mellon University. He holds academic appointments at Carnegie Mellon University’s School of Information Systems and Management and the Tepper School of Business. Smith has received several notable awards including the National Science Foundation’s prestigious CAREER Research Award, and he was recently selected as one of the top 100 “emerging engineering leaders in the United States” by the National Academy of Engineering. Smith received a Bachelors of Science in Electrical Engineering (summa cum laude) and a Masters of Science in Telecommunications Science from the University of Maryland, and received a Ph.D. in Management Science from the Sloan School of Management at MIT.
