Hennig-Thurau, T., Henning, V.,

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[[The article Consumer File Sharing of Motion Pictures, written by authors Thorsten Hennig-Thurau, Victor Henning, and Henrik Sattler, focuses on how people consuming and file sharing of motion pictures illegally is considered a major threat to the movie industry. From the gathered research and utility theory, the three authors were able to provide a hypothesis about the consequences and risks of consumer file sharing. The data they collected includes information on the consumers’ intentions towards and their behavior to the consumption of 25 new motion pictures. Through their data collection they were able to determine that due to the substantial cannibalization of theatre visits, DVD rentals, and DVD purchases are responsible for annual revenue losses of $300 million.

The authors open up their article by stating how ever since internet file-sharing services were created and caused a sharp decline of the music industry’s worldwide sales, movie executives began to fear their industry would be similarly affected. Research shows that approximately 130,000 movies are downloaded each day through file-sharing networks in the United States alone. They included the statistics of since 2005 movie theater admissions dropped by 9% and how the Motion Picture Association of America believes movies trafficking represents the greatest threat to the economic basis of moviemaking. The authors scholarly paper includes the data they collected to prove whether or not illegally downloading movies really affects the industry. The first study they began was to see if industry representatives arguing that illegal motion picture file sharing has a negative impact on other kinds of movie consumption, is true. They began with stating how movie downloading or copying movies with a CD/DVD burner, influenced the consumption of motion pictures to reduce by 42%, 45% said they rented fewer DVDs, and 44% said they bought DVDs less often. They concluded that all of their data results rely on the “what if” approach, that asks consumer who have already downloaded illegal moves to question whether they would have paid for the movies if they had not been available as illegal copies.

The second group of researchers questions these finding and argues that file sharing has either no impact or a positive impact on industry revenues. People argue that file sharing represents a form of “sampling” for experience goods, they say that file sharing networks lower the total costs of evaluating, which increase purchases and industry profits. They include research findings that present empirical results that show no negative impact of file sharing on traditional music distribution channels. Analysis’ show that music file sharing has no significant impact on album sales. They include this analysis to bring awareness that movie industry representatives are arguing illegal movie downloading can damage the industry, however if the music industry is still stable, is file sharing really affecting them?

The authors then begin discussing how the existence of negative effects of movie file sharing on movie consumption in the three key commercial channels: theatre visits, DVD rentals, and DVD sales. They talk about the consumers of illegal downloading intentions and how if they choose to download movies it is because he or she is less susceptible to offers from theaters, DVD rental outlets, and DVD retailers. This is because his or her intention to watch an illegal copy usually entails the expectation to obtain a copy of the movie for free, instead of paying for it through legal channels. They state that once the consumers who have gained access to an illegal copy of a movie will then have lesser probability of seeing the movie in a theater or on DVD. They then begin to talk about the hypothesized effect and its relations to the consumer’s watching of illegal copies. They state that consumers who watch an illegal movie copy have a lesser probability of seeing that movie in a theater or on DVD, regardless of their original intentions toward watching an illegal copy of the movie.

The strengths that can be seen in this article is one, that they are one of the only peer reviewed articles that discusses the effects illegal movie sharing has on the movie industry. The authors conduct a detailed analysis that gathers data on the cause of the sales decline for commercial movies and the consumers intentions and behaviours towards illegal file sharing. The three authors outline a new idea of how each outlet of movie watching cannibalizes the others and how now file sharing officially has cannibalized all of them. They created an analysis of why people choose to illegally download movies but also touch base on whether or not people downloading movie over purchasing them is really creating an affect.]]

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