P2P file-sharing black-market and Hungarian cinemas

Throughout the past few years, peer-to-peer file-sharing has become the major form of piracy in developed countries. Debates on its negative impact on the cultural industry and the legal struggle over its criminalization continue into the next decade. Surprisingly, despite the attention devoted to the subject, research into p2p downloading – especially in Hungary – is still rudimentary, and the majority of empirical studies can only establish circumstantial evidences on the nature of relationship between the legal and pirate marketplaces. Also, data on the consumption of content are typically self-reported (i.e., questionnaire-based), rather than observed which may be appropriate for the offline and legal context but is inadequate (or at best highly inaccurate) in the case of p2p piracy. In this article we look at the interconnections between the p2p and legal marketplaces in the case of the film industry using data collection methods that avoid the pitfalls of questionnaire-based surveys. Central to our analysis is the assessment of two piracy paradigms: substitution and shortage, that is whether pirated content is available through legal or only through illegal channels. In this first part of our article we review the evolution of both marketplaces of audiovisual content, outline the data collection method using real-time transactional data and present the main characteristics of online movie piracy.

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Using transactional data (real time observation of p2p downloading activity by users of three major Hungarian torrent trackers) and movie distribution statistics in the first part of our article we found that shortage-driven downloaders (pirating old catalogues only) outnumber those downloading only current theatrical releases, while the majority pirates both categories. The analysis of causal relationships reveals nonetheless that demand for a film among online pirates is impacted by its theatrical distribution (number of copies) rather than its actual success at the box offices, the effect of which is insignificant. This leads to the conclusion that part of the marketing efforts directly contributes to propping up piracy. At the same time, the high diversity of movie genres downloaded by individual users may suggest that p2p pirating is also, to a considerable extent a behavior difficult to describe using conventional sets of sociological factors and as such is characterized by a high degree of freedom whose consequences may include the enrichment of one’s cultural experience, or cultural omnivorousness.

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