Online Copyright Enforcement, Consumer Behavior, and Market Structure
European Commission - Joint Research Center - Digital Economy Unit
Ludwig Maximilian University of Munich - Faculty of Business Administration (Munich School of Management); Copenhagen Business School - Department of Innovation and Organizational Economics
University of Zurich - Faculty of Economics, Business Administration and Information Technology
March 30, 2015
Taking down copyright-infringing websites is a way to reduce consumption of pirated media content and increase licensed consumption. We analyze the consequences of the shutdown of the most popular German video streaming website - kino.to - in June 2011. Using individual-level clickstream data, we find that the shutdown led to significant but short-lived declines in piracy levels. The existence of alternative sources of unlicensed consumption, coupled with the rapid emergence of new platforms, led the streaming piracy market to quickly recover from the intervention and to limited substitution into licensed consumption. Our results therefore present evidence of a high elasticity of supply in the online movie piracy market, together with relatively low switching costs for users of copyright infringing platforms. The postshutdown market structure was much more fragmented, thus making it potentially more resistant to any future interventions.
Number of Pages in PDF File: 42
Keywords: Anti-Piracy Intervention, Copyright, Movie Industry, Natural Experiment.
JEL Classification: K42, L82, O34, O38.
Date posted: May 10, 2015
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