Studios are experimenting with release models what that means for movie piracy

2021 will be a very different year for the cinema world. Studios, hoping to find ways to make a profit from big-budget blockbusters, have turned to new movie release methods.

For Warner Bros. The pandemic prompted parent company AT&T to release all of its films in theaters and on HBO Max on the same day. Universal, owned by Comcast, has chosen to enter into agreements with individual theaters to shorten the time their movies have to stay in theaters before switching to premium video on demand.

Then there are folks like Disney who have most of their movies delayed until 2021 and put a handful on their own streaming service.

But box office analysts won’t be the only ones to take a keen look at how these movies are performing next year. Piracy experts are eagerly awaiting the implications of these new release methods for illegal streaming.

“As a data science researcher, this is a dream,” said Brett Danaher, a professor of entertainment analytics and data science at Chapman University. “It’s such a great experiment.”

Heading into 2021, piracy experts told CNBC they have theories about how pirates will react to these different models, but aren’t quite sure what will happen.

First, piracy is difficult to detect. Experts can track some downloads from major piracy websites, but once that file is downloaded, it can be privately distributed and streamed to thousands of other viewers.

It’s also why experts give a range of what piracy could cost the U.S. economy, rather than a set number. Last year, the Global Innovation Policy Center estimated that global online piracy costs the U.S. economy between $ 29.9 billion and $ 71 billion in lost revenue per year.

But a lot can be learned from people who are pirates. Looking at the data, experts like Andy Chatterley, the CEO and co-founder of MUSO, a global authority on digital piracy, can provide insights to media companies around the world.

First, Chatterley noted that the bigger the buzz surrounding a blockbuster, the more piracy it will see. Movies with major marketing campaigns, pent-up demand from ardent fans, and a lot of media attention will drive more illegal downloads online.

The data from MUSO also suggests that piracy is on the rise when better quality versions of films are available on pirated sites. For example, “Bad Boys for Life” hit theaters in January and saw a “fairly mild” amount of piracy, Chatterley said. However, when it became available on video on demand in mid-March, there was a major spike in online piracy.

Conversely, Disney’s “Mulan”, which immediately went to streaming, saw a massive spike on release day and a decrease in overtime afterward.

“The piracy was front loaded,” Chatterley said. “But the piracy was not necessarily bigger or smaller.”

For companies like AT&T that release high-quality versions of movies on day one, there are some ways to deter piracy. For example, two weeks before “Wonder Woman 1984” debuted in North America in theaters and on HBO Max, the film was released internationally.

This allowed the audience to see the film in theaters before a high-quality copy was posted on piracy websites. This is especially important because HBO Max is only a domestic product at this point.

“Of course there are people who will always commit pirates,” said Michael Smith, a professor of information technology and marketing at Carnegie Mellon University. “The people you’re concerned about are the people who would have legally bought your content but found it [piracy] is more convenient. “

Smith said the majority of people who use piracy do so because they have no other legal way to consume a product. If these viewers had gotten an easier legal way, they would have paid to watch the movie.

While online piracy can have negative financial consequences for media companies, the data experts who collect can also help these companies determine what their audience wants to watch. Data from groups like MUSO can tell companies what movies or TV shows they should buy or license, either domestically or to international locations.

For example, the European Union Intellectual Property Office found that “The Mummy” was disproportionately pirated in Spain and that the TV show “South Park” was a popular illegal download in Finland.

This information tells Universal it may want to make “The Mummy” more widely available in Spain and Viacom that it may want to make a deal with a Finnish streaming service.

As Danaher said, 2021 will be a big experiment for the industry when it comes to piracy. It is the first time that multiple different release strategies are taking place simultaneously and for a longer period of time.

Even if some titles are more popular than others, there should be trends in the data showing how people consume their entertainment.

Like last year, it will be difficult for experts to determine a clear financial impact, especially as the pandemic is likely to affect how people choose to watch certain movies. Those who cannot go to movie theaters can choose to stream legally when available, but can instead choose illegal methods for big movies.

Since premium video on-demand is becoming a purchase option sooner than usual, it may not be immediately clear whether it is on-demand purchases or piracy that cannibalize theatrical revenue.

“Unfortunately, I can’t tell you who’s going to win the horse race,” Danaher said.

Disclosure: Comcast is the parent company of NBCUniversal and CNBC.