Studios experiment with release models what this means for movie piracy

2021 will be a very different year for the cinema sector. The studios, hoping to find ways to profit from big box office successes, resorted to new methods for launching films.

For Warner Bros., the pandemic prompted its parent company AT&T to decide to release all of its films in theaters and on HBO Max on the same day. Comcast-owned Universal has chosen to strike deals with individual theaters to shorten the time their films have to stay in theaters before making the transition to premium on-demand video.

Then there are those like Disney who, for the most part, postponed most of their films until 2021 and put a handful on their own streaming service.

But box office analysts won’t be the only ones watching closely the performance of these films over the next year. Piracy experts are eagerly anticipating how these new launch 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 a great experiment.”

Towards 2021, piracy experts told CNBC that they have theories about how pirates will react to these different models, but are not sure what will happen.

On the one hand, piracy is a difficult thing to track. Experts can track some downloads from major piracy sites, but once the file is downloaded, it can be distributed and transmitted to thousands of other viewers in particular.

This is also why experts provide a range of how much piracy can cost the United States economy, rather than a fixed number. Last year, the Global Innovation Policy Center estimated that global online piracy cost the United States economy between $ 29.9 billion and $ 71 billion in lost revenue each year.

But much can be learned from 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.

On the one hand, Chatterley noted that the bigger the buzz around a blockbuster, the more piracy he will see. Movies with big marketing campaigns, pent-up demand from fervent fans and a lot of media exposure will generate more illegal downloads online.

MUSO data also suggests that piracy increases when high-quality versions of films are available on piracy sites. For example, “Bad Boys for Life” hit theaters in January and saw a “moderate” amount of piracy, Chatterley said. However, when it became available on video on demand in mid-March, there was a huge increase in online piracy.

On the other hand, Disney’s “Mulan”, which immediately went to streaming, had a big increase on the day of its release and then a reduction in overtime.

“Piracy was launched ahead,” said Chatterley. “But piracy was not necessarily more or less.”

For companies like AT&T, which will release high-quality versions of films on the first day, there are a few ways to stop piracy. For example, two weeks before “Wonder Woman 1984” opened in theaters in North America and on HBO Max, the film was released internationally.

This allowed the public to see the film in theaters first, before a high-quality copy was posted on piracy sites. This is especially important because HBO Max is just a household product at the moment.

“Of course, you have people who will always pirate,” said Michael Smith, professor of information technology and marketing at Carnegie Mellon University. “The people you’re concerned about are the ones who would have legally purchased your content but found [piracy] it’s more convenient. “

Smith said that most people who have pirated do so because they have no other legal way to consume a product. If an easier legal form had been provided for these viewers, they would have paid to see the film.

While online piracy can have negative financial impacts on media companies, the data collected by experts can also help those companies determine what their audience wants to watch. Data from groups like MUSO can tell companies which movies or TV shows they should buy or license, both domestically and internationally.

For example, the European Union’s Intellectual Property Office determined 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 it may want to make “The Mummy” more widely available in Spain and Viacom that it may want to make a deal with a Finnish streaming service.

As Danaher said, 2021 will be a great experience for the industry when it comes to piracy. It is the first time that there will be several different launch strategies, all happening at the same time and for an extended period of time.

Even though some titles are more popular than others, there must be trends in the data that show how people are consuming their entertainment.

As in the previous year, it will be difficult for experts to determine a clear financial impact, mainly because the pandemic is likely to affect the way people choose to watch certain films. Those who cannot go to theaters can choose to broadcast legally when available, but can choose illegal methods for the main films.

In addition, with premium on-demand video becoming an earlier-than-normal purchase option, it may not be immediately clear whether it is purchase on demand or piracy that is cannibalizing movie revenue.

“Unfortunately, I can’t say who will win the horse race,” said Danaher.

Disclosure: Comcast is the parent company of NBCUniversal and CNBC.