The Effect of Piracy Website Blocking on Consumer Behavior

58 Pages Posted: 2 Jun 2015 Last revised: 14 Aug 2019

See all articles by Brett Danaher

Brett Danaher

Chapman University - The George L. Argyros School of Business & Economics

Jonathan Samuel Hersh

Chapman University - The George L. Argyros School of Business & Economics

Michael D. Smith

Carnegie Mellon University - H. John Heinz III School of Public Policy and Management

Rahul Telang

Carnegie Mellon University - H. John Heinz III School of Public Policy and Management

Date Written: August 13, 2019

Abstract

In this study we ask what drives the success or failure of various supply side antipiracy enforce-ment actions such as piracy website blocking. We do this in the context of three court-ordered events affecting consumers in the UK: We first study Internet Service Providers’ blocking of 53 video piracy sites in 2014 and of 19 piracy sites in 2013, and we then study the blocking of a single dominant site – The Pirate Bay – in 2012.

We show that blocking 53 sites in 2014 caused treated users to decrease piracy and to increase their usage of legal subscription sites by 7-12%. It also caused an increase in new paid subscrip-tions. We find similar results for the blocking of 19 piracy sites in 2013. However, blocking a single site in 2012 caused no increase in usage of legal sites but instead caused users to increase visits to other unblocked piracy sites and VPN sites. We find evidence that increased search and learning costs associated with piracy drive the effectiveness of blocking multiple sites rather than just one primary site.

This suggests that to increase legal IP use when faced with a dominant piracy channel, the opti-mal policy response must block multiple channels of access to pirated content, a distinction that the current literature has not made clear.

Keywords: piracy, regulation, digital distribution, motion picture industry, natural experiment

Suggested Citation

Danaher, Brett and Hersh, Jonathan Samuel and Smith, Michael D. and Telang, Rahul, The Effect of Piracy Website Blocking on Consumer Behavior (August 13, 2019). Available at SSRN: https://ssrn.com/abstract=2612063 or http://dx.doi.org/10.2139/ssrn.2612063

Brett Danaher (Contact Author)

Chapman University - The George L. Argyros School of Business & Economics ( email )

333 N. Glassell
Orange, CA 92866
United States

Jonathan Samuel Hersh

Chapman University - The George L. Argyros School of Business & Economics ( email )

333 N. Glassell
Orange, CA 92866
United States

HOME PAGE: http://jonathan-hersh.com

Michael D. Smith

Carnegie Mellon University - H. John Heinz III School of Public Policy and Management ( email )

Pittsburgh, PA 15213-3890
United States

HOME PAGE: http://www.heinz.cmu.edu/~mds

Rahul Telang

Carnegie Mellon University - H. John Heinz III School of Public Policy and Management ( email )

4800 Forbes Ave
Pittsburgh, PA 15213-3890
United States
412-268-1155 (Phone)

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