"Online Copyright Enforcement, Consumer Behavior, and Market Structure"

Abstract

It aims to provide evidence-based scientific support to the European policy-making process. The scientific output expressed does not imply a policy position of the European Commission. Neither the European Commission nor any person acting on behalf of the Commission is responsible for the use which might be made of this publication. Reproduction is authorised provided the source is acknowledged. All images © European AbstractTaking 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 websitekino.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. AbstractTaking 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.toin 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 post-shutdown market structure was much more fragmented, thus making it potentially more resistant to any future interventions.

Investigating the role of religiosity as a deterrent against digital piracy

“…On the demand side, efforts are being made to educate the public about the unethical and illegal nature of digital piracy (Gunter, 2009). Authorities have raided popular pirate sites such as Pirate Bay, Isohunt, Demonoid, BitTorrent, µTorrent, RARBG, LimeTorrents and Kickass Torrents, to name just a few, and have won many legal battles to shut down these sites on the internet (Aguiar et al , 2015). Despite these efforts, pirate websites are evolving and increasing.…”

Copyright enforcement in the digital age

“…It appears that users simply found other ways to access the same pirated content on other popular sites. A study by Aguiar et al 2 using similar methods found similar results in that the shutdown of a single video-linking site Kino.to (now defunct) in Germany did not cause a meaningful increase in legal consumption. Notably, this shutdown was more like a website block than an actual site shutdown, because Kino.to linked to content only on other sites and did not host content; shutting down Kino.to simply removed, or "blocked," a means j Results from this 2015 study were therefore generated by 20 data points, an observation for each of 10 segments both before and after the blocks.…”

Online Piracy and the “Longer Arm” of Enforcement

“…As mentioned in Section 3.3, in equilibrium, the supply level, η, ought to depend on the level of supply-side enforcement, e. Accordingly, we now complete the model specification by endogenizing η using a standard break-even analysis in which players enter the market as long as there is profit to be made (e.g., Vickers 1989). Pirate suppliers are typically paid based on the number of downloads of pirated content uploaded by them (Aguiar et al 2015). The total advertisement revenue earned by all suppliers should then be proportional toq, the total number of illegal downloads; henceforth, without loss of generality, we assume this constant of proportionality to be one.…”

“…Our research questions and modeling approach put the spotlight squarely on how suppliers of pirated content actually operate, unraveling the mystery surrounding their business models. The underlying ecosystem shows a curious interdependence among aggregator sites, online ad agencies, and pirate suppliers (Aguiar et al 2015, Seidler 2011. In practice, many aggregator sites providing online access to pirated content operate on revenues generated through online advertisements.…”