A photographic illustration of pirated copies being illegally downloaded with the legal music service iTunes in the background in London, England.
Matthew Lloyd | Getty Images
2021 will be a completely different year for the cinema business. Hoping to find ways to make a profit from big budget blockbusters, new methods of film publishing have turned.
For Warner Bros., the pandemic led parent company AT&T to decide to release all films in theaters and on HBO Max on the same day. Universal, owned by Comcast, has chosen to sign contracts with individual theaters to reduce the time their films have to stay in theaters before they switch to premium video-on-demand.
Then there are those like Disney, who have largely postponed the majority of their films to 2021 and put a handful on their own streaming service.
But box office analysts won’t be the only ones watching closely how these films perform over the next year. Piracy experts are excited to see how these new publishing methods will affect illegal streaming.
“As a data science researcher, this is a dream,” said Brett Danaher, professor of entertainment analysis and data science at Chapman University. “It’s such a great experiment.”
Heading into 2021, piracy experts told CNBC that they have theories about how pirates will react to these different models, but aren’t entirely sure what will happen.
What we know about piracy
For one thing, piracy is difficult to track. Experts can track some downloads from major piracy websites, but once this file is downloaded it can be privately distributed and streamed to thousands of other viewers.
It’s also why experts make a range of claims that piracy could cost the US economy, rather than a fixed number. Last year, the Global Innovation Policy Center estimated that global online piracy cost the US economy between $ 29.9 billion and $ 71 billion in lost revenue each year.
But you can learn a lot from people who are pirates. Looking at the data, experts like Andy Chatterley, CEO and co-founder of MUSO, a global authority on digital piracy, can provide insights to media companies around the world.
For one thing, Chatterley noted that the bigger the buzz around a blockbuster, the more piracy it will see. Films with large marketing campaigns, pent-up inquiries from enthusiastic fans and a lot of media exposure lead to more illegal online downloads.
MUSO’s data also suggests that piracy will increase as higher quality versions of films become available on piracy sites. For example, “Bad Boys for Life” came out in theaters in January and saw a “pretty mild” amount of piracy, Chatterley said. However, when it became available on video-on-demand in mid-March, there was a huge surge in online piracy.
Conversely, Disney’s “Mulan,” which immediately went streaming, saw a massive spike and then a fall in overtime on its release day.
“The piracy was front loaded,” Chatterley said. “But the piracy wasn’t necessarily bigger or smaller.”
How to prevent illegal downloads
For companies like AT&T that release high quality versions of films on day one, there are a few ways to prevent piracy. For example, the film was released in theaters and on HBO Max internationally two weeks before the North American debut of “Wonder Woman 1984”.
This allowed audiences to see the film in theaters first before a high quality copy was released on piracy websites. This is especially important as HBO Max is currently only a domestic product.
“Of course there are people who always become pirates,” said Michael Smith, professor of information technology and marketing at Carnegie Mellon University. “The people you worry about are the people who would have legally bought your content but found it [piracy] is more convenient. “
People wearing masks walk past a billboard for the film ‘Wonder Woman 1984’. Photo taken on December 26th, 2020.
Simon Shin | SOPA pictures | LightRocket via Getty Images
Smith said the majority of pirates do this because they have no other legal way to consume a product. Had these viewers been given an easier legal route, they would have paid to watch the film.
While online piracy can have a negative financial impact on media companies, the data experts gathered can also help those companies determine what their audiences want to see. Data from groups like MUSO can tell companies which films or TV shows to buy or license domestically or in international locations.
For example, the European Union Intellectual Property Office found that “The Mummy” was disproportionately pirated in Spain and the TV show “South Park” was a popular illegal download in Finland.
This information tells Universal that “The Mummy” may be made more widely available in Spain and Viacom in order to sign a contract with a Finnish streaming service.
What could happen in 2021
As Danaher said, 2021 will be a big experiment for the industry when it comes to piracy. It is the first time that several different release strategies are carried out simultaneously and over a longer period of time.
While some titles are more popular than others, the data should include trends that show how people are consuming their entertainment.
As in the previous year, it will be difficult for experts to pinpoint a clear financial impact, especially since the pandemic is likely to have an impact on how people watch certain films. Those who cannot go to the theaters may opt for legal streaming when available, but choose illegal methods for big movies instead.
With premium video-on-demand becoming an option to buy sooner than usual, it may not be immediately clear whether on-demand buying or piracy is cannibalizing theater revenue.
“Unfortunately, I can’t tell you who will win the horse race,” said Danaher.
Disclosure: Comcast is the parent company of NBCUniversal and CNBC.
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