Impact of Digital Piracy on Movie Industry Box Office

Our subject of interest is to determine what effect film piracy in its various formats has on box office sales of films. However, unlike majority of empirical works on movie industry box office, our paper concentrates not only on availability of pre-release form of piracy, which is regarded as particularly lossmaking for studios, but also at periods of available pirated content in its various forms during theatrical run of films. Our analysis includes 688 films with wide releases in the US cinematic market opening during period from 2012 to 2017. We introduce two empirical models that can potentially explain piracy impact on box office revenuesWe find that for each day of available high-definition pirated copy during theatrical run of film, box office sales, on average, increase by 0.38%. We also conclude that, for increase in period of availability of similar copy, likelihood of expense recoup rises by 0.24 percent points.