‘Expendables 3’ Flop Shows Danger of Pre-Release Piracy, Expert Says

“The Expendables 3” flopped at the box office last weekend, the victim of scathing reviews and a concept that was looking bruised and battered by round three.

It was also hindered by widespread piracy, as a high-quality copy of the film that leaked online three weeks before it premiered was downloaded by an estimated 2.2 million people.  “The Expendables 3” pulled in a meager $16.2 million for its premiere, a franchise low-point and roughly $10 million less than some analysts expected it to make.

It’s not clear how much the illegal downloads are to blame for “The Expendables 3’s” failure, particularly given that other films were more widely pirated last week. However, a 2011 report by Carnegie Mellon researchers found that when a film leaks before its debut, box office revenues can drop by 19.2 percent.

To get a handle on piracy’s repercussions for “The Expendables 3” and for the film industry as a whole, Variety spoke to Michael D. Smith, a professor of information technology and marketing at Carnegie Mellon University’s Heinz College school of public policy, and one of that report’s authors.

Do you think that piracy hurt “The Expendables 3”?

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We don’t know what it would have done were it not pirated, but this looks exactly like what we were talking about in the paper — it was a high quality leak, before a movie opened, that attracted fans who would have paid to see and now don’t have to.

Most major blockbusters are pirated as soon as they hit theaters, but your study is focused on pre-release piracy. What makes that so problematic?

There certainly are people who watched the pirated copies who weren’t going to see it any way. But the real fans are the ones who rush out on opening weekend, and what’s harmful is when it’s available on pirate sites before there is a legal channel to see it. You’re asking people to not only not see a pirated copy, but to wait a few weeks. Those are your most valuable customers and they’re the ones you need to consume the content legally.

Is there any publicity advantage to having a film leak? Couldn’t it help build buzz, particularly if the film is good?

Studios are not idiots. They want to make money. If pre-release piracy helped with that, they would cheerfully leak their films. But they know it hurts box office. It strikes me as unusual when pirate sites say piracy helps a film’s sales. Alright, but they don’t have the right to take it upon themselves to leak and consume pirated material.

Some people recognize that piracy is wrong, but there are some circles where piracy is an acceptable practice. From a studio’s perspective, if and when piracy becomes accepted and people stop having a moral problem with it, they’ve got a real problem on their hands.

An unfinished copy of “X-Men Origins: Wolverine” leaked online a month before it hit theaters, but the film was a box office success. How could piracy hurt “The Expendables” but leave that film unscathed?

Let’s assume it didn’t have that big an impact, it could be related to the quality. “Expendables 3” was a DVD quality leak. “Wolverine” was unfinished. That could be the difference.

Has piracy become more widespread since the ‘Wolverine” situation?

In some ways, the fact that we haven’t seen a leak like this since “Wolverine” suggests that studios are better at shutting it down. The issue for them is that now that movie production is digital, anybody with a flash drive and a little bit of access can steal it.

What do you think gets ignored in the piracy debate?

If piracy becomes more and more popular, studios are going to stop making some types of films, and that’s bad for all of us. It’s not only the fat cat studio chiefs you’re hurting. It’s you the consumer.

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