Abstract

http://ssrn.com/abstract=2176246
 


 



Piracy and Movie Revenues: Evidence from Megaupload: A Tale of the Long Tail?


Christian Peukert


University of Zurich - Department of Business Administration

Jörg Claussen


Copenhagen Business School - Department of Innovation and Organizational Economics

Tobias Kretschmer


Ludwig-Maximilians-Universität München - Faculty of Business Administration (Munich School of Management); London School of Economics & Political Science (LSE) - Centre for Economic Performance (CEP)

August 20, 2013


Abstract:     
In this paper we make use of a quasi-experiment in the market for illegal downloading to study movie box office revenues. Exogenous variation comes from the unexpected shutdown of the popular file hosting platform Megaupload.com on January 19, 2012. The estimation strategy is to compare box office revenues before and after the shutdown, controlling for various factors that potentially explain intertemporal differences.

We find that box office revenues of a majority of movies did not increase. While for a mid-range of movies the effect of the shutdown is even negative, only large blockbusters could benefit from the absence of Megaupload. We argue that this is due to social network effects, where online piracy acts as a mechanism to spread information about a good from consumers with low willingness to pay to consumers with high willingness to pay. This information-spreading effect of illegal downloads seems to be especially important for movies with smaller audiences.

Number of Pages in PDF File: 30

Keywords: Piracy, Movie Revenues, Megaupload, Natural Experiment

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Date posted: November 17, 2012 ; Last revised: November 18, 2013

Suggested Citation

Peukert, Christian and Claussen, Jörg and Kretschmer, Tobias, Piracy and Movie Revenues: Evidence from Megaupload: A Tale of the Long Tail? (August 20, 2013). Available at SSRN: http://ssrn.com/abstract=2176246 or http://dx.doi.org/10.2139/ssrn.2176246

Contact Information

Christian Peukert (Contact Author)
University of Zurich - Department of Business Administration ( email )
Rämistrasse 71
Zurich, CH-8006
Switzerland
Jörg Claussen
Copenhagen Business School - Department of Innovation and Organizational Economics ( email )
Kilevej 14A
Frederiksberg, 2000
Denmark
Tobias Kretschmer
Ludwig-Maximilians-Universität München - Faculty of Business Administration (Munich School of Management) ( email )
Kaulbachstr. 45
Munich, 80539
Germany
London School of Economics & Political Science (LSE) - Centre for Economic Performance (CEP)
Houghton Street
London WC2A 2AE
United Kingdom
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