Piracy and Movie Revenues: Evidence from Megaupload
Ludwig-Maximilians-Universität Munich - Faculty of Business Administration (Munich School of Management)
Copenhagen Business School - Department of Innovation and Organizational Economics
October 22, 2012
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 based on a quasi difference-in-differences approach. We compare box office revenues before and after the shutdown to a matched control group of movies unaffected by the shutdown.
We find that the shutdown had a negative, yet insignificant effect on box office revenues.This counterintuitive result may suggest support for the theoretical perspective of (social) network effects where file-sharing acts as a mechanism to spread information about a good from consumers with zero or low willingness to pay to users with high willingness to pay.
Number of Pages in PDF File: 3
Keywords: Piracy, Movie Revenues, Megaupload, Natural Experimentworking papers series
Date posted: November 17, 2012 ; Last revised: November 26, 2012
© 2013 Social Science Electronic Publishing, Inc. All Rights Reserved.
This page was processed by apollo2 in 0.562 seconds