How Internet Pirates Stole The Hurt Locker’s Booty

The Hurt LockerI’ve long been an opponent of digital piracy, arguing that the spread of intellectual property without reimbursement will homogenize media and art, leading to a lowest common denominator economy in which films, music and books are only produced for those not technologically savvy enough to steal it. Recent studio thinking has already started leading us down this road. Unfortunately, the precise overall impact of piracy on the system is almost impossible to perceive. Much like the Global Warming, Illegal Immigration and Big Box Superstore arguments, there are fierce opponents on both sides, but little data either way. For all our talk of the behind-the-scenes changes in the independent film community and within the studios themselves, pro-theft groups are quick to point out heavily downloaded blockbusters like Transformers 2The Dark Knight and Avatar as films that can be successful, even while being downloaded illegally.

But then we come to the curious case of The Hurt Locker. This year’s Academy Award winner for Best Picture, The Hurt Locker performed dismally at the Box Office, drawing in a pathetic $16.4 million last summer domestically, and raking in only $45 million worldwide. The average price of admission in 2009 was $7.50, meaning that domestically only 2.1 million people paid to see it — 6 million if you extend that average to worldwide. As it turns out, 10 million people downloaded it for free. Let that rattle around in your noggin for a moment: five times as many people downloaded the film as saw it in the theater domestically. If every person who saw the film then downloaded it after going home (or downloaded it, liked it then paid to see it as many pirates *claim* is their viewing strategy). That still leaves 4 million worldwide, or 8 million domestically, that didn’t.

10 million downloads. That translates to $75 million in revenue. Now we’re talking about a film that should have/could have raked in $120 million, making it a surefire indie hit, but instead scraped by with $45 million, which after print and advertising and an Oscar campaign, isn’t exactly what one would call a payday. This is usually the point at which the piracy fans will argue special cases and try to whittle that number down. People who weren’t interested in the film but downloaded it anyway. People without  a theater nearby showing the film. People in countries without movie theaters. You know, people who have never heard of DVD. Oh, yeah. Three million of those people downloaded it after it came out on DVD. That’s 150% more people than paid to see it in the U.S.

The Hurt LockerIndies are the point where piracy arguments tend to break down. While some in the community will argue that piracy helps get the word out on smaller, independent bands and films, it never seems to be able to pony up help at the box office. Here we have one of the best-reviewed films of last year, a film that won Best Picture and was available for download four months before the film was released (thanks internets!) and still the film barely scraped by. So much for the word of mouth factor.

The chief problem is that pirates don’t think they’re the problem. They think about their participation locally, not globally. Their thought process is, “What is it going to hurt if *I* download this? It’s not like I am actually taking anything physical that someone paid to produce.” But that’s because they think of the download as a product and not a service. The picture becomes clearer when you think of entertainment as a theme park. Someone paid to design the rides and build it, staff it and open it. The park has become its own economy, employing people in a number of careers. Pirates are the guys who cut a hole in the fence and sneak in. Who are they hurting, right? The rides are already there, and they’re not taking them away. But the lines are longer as a result. Security begins hassling paying customers to try to keep out the wall jumpers. The park sees a drop in revenue as a result of people learning how easy it is to find a hole in the wall. And ultimately, some of the rides have to be shut down because they cost too much and don’t bring enough paying customers to the park. It doesn’t matter how good they are – only the big rides that accommodate lots of people will remain.

Homogenized entertainment. Last year pirates told the studios they don’t want to pay for something like The Hurt Locker. They’d rather steal it. So what do you think the likelihood of them funding something like it in the future is? Oscar cred or no, this is a business, not an award shelf.