Avengers Assemble! When Digital Piracy Increases Box Office Demand

Using the film industry, we show how the content of information goods changes the substitutability or complementarity effects of copyright infringement. Leveraging the quasi-random timing of the appearance of a high-quality pirated movie after its release in-theaters, we find for “spectacle”-oriented films, where the value of the good is linked to in-theater viewing, piracy complements box-office sales. For “story”-oriented films, where the value of the good is inherent—unenhanced by in-theater viewing—piracy displaces sales. Our findings suggest the value of creative content is linked to its distribution context, with relevance for commercialization strategies of digital goods in creative industries.

Keywords: piracy, movies, box office, spectacle, information goods, release strategy

JEL Classification: L15, L82, K11, K42, O33, O34

Suggested Citation: Suggested Citation

Ackermann, Klaus and Bradley, Wendy and Cameron, Jack Francis, Avengers Assemble! When Digital Piracy Increases Box Office Demand (June 30, 2020). SMU Cox School of Business Research Paper No. 22-23, Available at SSRN: https://ssrn.com/abstract=4255171 or http://dx.doi.org/10.2139/ssrn.4255171