High-Quality Pirated Films and Rising Ticket Costs Are Shaping How Americans Choose What to Watch

Movie piracy has been part of the entertainment landscape for years, but a new study digs into something far more specific: how the quality of pirated copies and the cost of going to the theater influence the choices people make. This research, carried out by teams at Carnegie Mellon University, the University of California, Davis, and Boston University, offers a detailed look at what drives moviegoers toward legal or illegal viewing. The results reveal patterns that movie studios can’t afford to ignore—especially as piracy becomes easier, faster, and more sophisticated.

The study is based on a unique dataset that blends piracy-related information, theatrical performance numbers, Google search data, and demographic statistics from the U.S. Census Bureau. By combining these sources, the researchers built an econometric model to understand how people weigh the choice between watching a movie legally in theaters or illegally through pirated platforms. The findings help explain not only who pirates movies, but why they do it—and how much it costs the industry.

One of the biggest insights is the impact of high-quality pirated sources appearing early in a movie’s release window. When a clear, easily watchable pirated version hit the internet in the first week of a film’s theatrical debut, the film saw a 7.9% drop in box-office revenue within the first eight weeks. If only low-quality versions were available, the damage was noticeably smaller. This highlights a major problem for studios: piracy doesn’t just exist in the background; the quality of pirated content directly affects legal ticket sales.

The study also found that certain groups of moviegoers respond differently to ticket prices and the effort of going to a theater. Higher-income and older viewers were less affected by ticket prices but more affected by the overall cost of going out—transportation, time, convenience, and the general hassle involved. Meanwhile, 15- to 24-year-olds still showed a stronger preference for watching certain movies on the big screen, suggesting that younger audiences value the experience more than older ones in many cases.

Interestingly, the financial hit caused by early piracy is not the same for all movies. Smaller films—those earning $100 million to $200 million domestically—experienced a 9.4% revenue loss, while blockbusters making over $200 million saw only a 4.3% loss. This suggests that piracy may actually widen the gap between big and mid-level movies. Independent filmmakers and smaller studios, already operating with tighter margins, may suffer disproportionately when pristine pirated versions leak early. This could ultimately influence the kinds of movies studios feel safe producing, potentially shrinking the diversity of films available in theaters.

The researchers didn’t stop at identifying the problem—they tested different solutions through policy simulations. Surprisingly, two commonly suggested strategies turned out to have little real impact: lowering ticket prices and increasing the number of screenings. These options do very little to offset the damage caused by piracy. In other words, making tickets cheaper or adding showtimes won’t necessarily convince people to avoid pirated copies.

What did show more promise was delaying the availability of high-quality pirated content and investing in the theatrical experience itself. Improving seating, projection technology, audio systems, and overall ambiance can create an environment that piracy can’t fully replicate. The study emphasizes that theater operators should focus on offering a more immersive, comfortable, and engaging experience—something that gives moviegoers a reason to pick the big screen over the couch.

Another important approach is targeting piracy at the source. Reducing the availability of pirated content—especially clean, high-definition copies—can significantly limit its impact. Pirate websites collectively earn around $1.3 billion per year from online ads alone, so cutting off their supply of high-quality files could disrupt a massive revenue stream that currently encourages piracy platforms to thrive.

The study does come with several limitations. It only looks at movies with domestic box-office revenue above $100 million, so results shouldn’t be applied to smaller releases. It also focuses on the first eight weeks of theatrical sales and primarily examines piracy through peer-to-peer file-sharing networks, leaving out other modern methods such as illicit streaming or Telegram-based distribution. Despite these boundaries, the findings offer valuable guidance for theater companies, policymakers, and anyone working to protect creative industries.

To understand this study better, it helps to look at the broader picture of movie piracy. Piracy today is not like traditional counterfeiting. Digital files can be copied perfectly, distributed instantly, and accessed globally at almost zero cost. That combination makes enforcement extremely difficult. A pirated movie isn’t a single physical item someone has to produce—it’s a digital file that can be downloaded millions of times. This makes the problem fundamentally different from counterfeit handbags or fake electronics.

Researchers also note that piracy affects genres differently. For visually driven, effects-heavy films—think superhero movies or large-scale action films—the theatrical experience still holds strong appeal. Even if people watch a pirated version, some may end up buying tickets later because they want to experience the movie in its intended format. In contrast, dialogue-heavy dramas or smaller films don’t have that same advantage. A high-quality pirated version captures most of what the movie offers, so theaters lose out more directly.

Another area worth mentioning is how piracy influences decision-making for film studios. Mid-budget films have already been shrinking in number over the past decade. Streaming services have absorbed some of that space, but piracy adds an extra layer of financial risk that could push studios even further toward massive blockbusters or safe, formula-driven franchises. If early high-quality piracy hurts smaller movies more severely, studios may choose to avoid making them altogether.

From a consumer behavior standpoint, the study’s demographic findings also reflect broader trends. Younger viewers tend to value the social and immersive aspects of going to the movies, which explains why they are less drawn to piracy for certain types of films. However, older and higher-income groups prioritize convenience and comfort, and may opt for piracy—or legal home viewing—if theaters feel inconvenient or outdated.

The research suggests that improving the moviegoing experience may be the most dependable long-term strategy for theaters. As home technology improves—with massive TVs, surround sound systems, and fast internet—cinemas need to elevate their offerings to stay competitive. Enhanced audio-visual quality, better seating, unique formats like IMAX or Dolby Cinema, and amenities such as recliners or premium food options can all help set theaters apart.

Ultimately, this study highlights an important message: piracy is not a simple problem with a one-size-fits-all solution. It affects different movies and different audiences in different ways. But one thing is clear—high-quality pirated content appearing early has measurable and significant consequences, and both studios and theaters need to rethink the strategies they use to address it.

Research Paper:
Operational Decision-Making Around Movie Piracy & Theatrical Release: A Structural Model of Movie Piracy vs. Legal (In-Theater) Consumption
https://pubsonline.informs.org/doi/10.1287/msom.2024.1340