The effect of film sharing on P2P networks on box office sales Kęstutis Černiauskas Faculty of Computing Blekinge Institute of Technology SE-371 79 Karlskrona Sweden i This thesis is submitted to the Faculty of Computing at Blekinge Institute of Technology in partial fulfillment of the requirements for the degree of Master in Informatics (120 credits). Contact Information: Author(s): Kęstutis Černiauskas E-mail: [email protected] University advisor: Sara Eriksén Department Faculty of Computing Internet : www.bth.se Blekinge Institute of Technology Phone : +46 455 38 50 00 SE-371 79 Karlskrona, Sweden Fax : +46 455 38 50 57 ii ABSTRACT Context. Online piracy is widespread, controversial and poorly understood social phenomena that affects content creators, owners, and consumers. Online piracy, born from recent, rapid ITC changes, raises legal, ethical, and business challenges. Content owners, authors and content consumers should benefit from better understanding of online piracy. Improved, better adapted to marketplace and ITC changes content distribution models should benefit content owners and audiences. Objectives. Investigate online piracy effect on pirated product sales. Improve understanding of online piracy behaviors and process scale. Methods. This observational study investigated movie-sharing effect on U.S. box office. Movie sharing was observed over BitTorrent network, the most popular peer-to-peer file-sharing network. Relationship between piracy and sales was analyzed using linear regression model. Results. File sharing was found to have a slightly positive correlation with U.S. box office sales during first few weeks after film release, and no effect afterwards. Most of newly released movies are shared over BitTorrent network. File sharing is a global, massive phenomenon. Conclusions. I conclude that online movie file sharing has no negative correlation on U.S. box office. Slightly positive movie sharing correlation to box office sales could have occurred because sharing rather informs, than substitutes cinema going. Keywords: online piracy, P2P network, BitTorrent, file sharing, movie industry, box office 3 CONTENTS Abstract ......................................................................................................................................................... 3 Contents ........................................................................................................................................................ 4 1. Introduction .......................................................................................................................................... 6 2. Related Work ........................................................................................................................................ 8 2.1. What is piracy? ............................................................................................................................. 8 2.2. Piracy impact ................................................................................................................................ 8 2.3. Piracy culture ................................................................................................................................ 9 2.4. Methods of piracy research ......................................................................................................... 10 2.5. Data sources ................................................................................................................................ 11 2.6. BitTorrent investigation methods ................................................................................................ 12 3. Method ............................................................................................................................................... 14 3.1. BitTorrent system ........................................................................................................................ 14 3.2. Data structures ............................................................................................................................ 15 3.2.1. BitTorrent file metadata .......................................................................................................... 15 3.2.2. Torrent data reported by torrent indexers ................................................................................ 15 3.2.3. BitTorrent data reported by tracker server .............................................................................. 15 3.2.4. Film sales data ......................................................................................................................... 15 3.2.5. Torrent indexers ...................................................................................................................... 16 3.2.6. Trackers ................................................................................................................................... 16 3.3. Data processing ........................................................................................................................... 17 3.3.1. Torrents ................................................................................................................................... 17 3.3.2. Data transformations ............................................................................................................... 18 3.3.3. Tracker-reported data cleaning, correction and removal ........................................................ 19 3.3.4. Sales and torrent usage data alignment ................................................................................... 20 3.4. Analysis....................................................................................................................................... 21 4. Results ................................................................................................................................................. 22 4.1. Descriptive statistics ................................................................................................................... 22 4.2. Representative individual movie statistics .................................................................................. 25 4.3. Models......................................................................................................................................... 27 4.3.1. Weekly models ........................................................................................................................ 28 4.3.2. Monthly models ...................................................................................................................... 30 4 4.3.3. Daily models ........................................................................................................................... 32 5. Analysis and Discussion ....................................................................................................................... 35 5.1. Variables and causality ............................................................................................................... 35 5.2. Context ........................................................................................................................................ 36 5.3. Data quality ................................................................................................................................. 37 5.4. Usefulness ................................................................................................................................... 37 5.4.1. For studies ............................................................................................................................... 37 5.4.2. For industry ............................................................................................................................. 39 5.5. Limitations .................................................................................................................................. 40 6. Conclusions ......................................................................................................................................... 42 7. Future work ......................................................................................................................................... 44 8. References .......................................................................................................................................... 45 5 1. INTRODUCTION Online piracy is unauthorized duplication of copyrighted material online. It is a widespread, controversial and poorly understood social phenomena affecting content authors, owners and consumers. Online piracy affects spread to many areas of interest, such as legal, moral, behavioral, economic and behavioral. Content owners are concerned of how they are affected by online piracy, because freely distributed digital products might cannibalize sales of legal products. Owners could try to limit potentially disruptive piracy impact, and modify existing business practices to adapt to challenges. Online piracy provide consumers with opportunities to obtain digital products free, bypassing authorized content distributor’s channels. Some consumers might forego a purchase of product, what would result in lost sales. Others could still purchase products. This is a study of digital movie piracy over Internet. Study investigates movie files sharing on P2P networks correlation to U.S. box office sales. There is a gap of understanding