IDEAS home Printed from https://ideas.repec.org/a/eee/jeborg/v209y2023icp334-347.html
   My bibliography  Save this article

Pirate and chill: The effect of netflix on illegal streaming

Author

Listed:
  • Frick, Sarah J.
  • Fletcher, Deborah
  • Smith, Austin C.

Abstract

Over 188 million people in the United States use a subscription video streaming service, yet digital piracy remains prevalent and costs the U.S. economy an estimated $29.2 billion annually. This paper investigates the relationship between a movie's availability on Netflix, the largest video subscription service, and intent to illegally stream the movie. We leverage a contract dispute that caused Epix (a cable network company) to move all its movies from Netflix to Hulu, representing a substantial decrease in the legal streaming availability of these movies. Using a difference-in-differences design, we find that reducing legal streaming access via the removal of Epix movies from Netflix results in a 20% increase in piracy intent relative to movies that remained on Netflix, as measured by Google search volume. This study contributes to the understanding of the substitution between legal streaming services and movie piracy and has implications for content owners deciding what platform to offer their movie on.

Suggested Citation

  • Frick, Sarah J. & Fletcher, Deborah & Smith, Austin C., 2023. "Pirate and chill: The effect of netflix on illegal streaming," Journal of Economic Behavior & Organization, Elsevier, vol. 209(C), pages 334-347.
    • Handle: RePEc:eee:jeborg:v:209:y:2023:i:c:p:334-347
    DOI: 10.1016/j.jebo.2023.03.013
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0167268123000793
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.jebo.2023.03.013?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Nhan, Johnny & Bowen, Kendra & Bartula, Aaron, 2020. "A comparison of a public and private university of the effects of low-cost streaming services and income on movie piracy," Technology in Society, Elsevier, vol. 60(C).
    2. Peukert, Christian & Claussen, Jörg & Kretschmer, Tobias, 2017. "Piracy and box office movie revenues: Evidence from Megaupload," International Journal of Industrial Organization, Elsevier, vol. 52(C), pages 188-215.
    3. Miguel Godinho de Matos & Pedro Ferreira & Michael D. Smith, 2018. "The Effect of Subscription Video-on-Demand on Piracy: Evidence from a Household-Level Randomized Experiment," Management Science, INFORMS, vol. 64(12), pages 5610-5630, December.
    4. Arthur Vany & W. Walls, 2007. "Estimating the Effects of Movie Piracy on Box-office Revenue," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 30(4), pages 291-301, June.
    5. Joel Waldfogel, 2012. "Music Piracy and Its Effects on Demand, Supply, and Welfare," Innovation Policy and the Economy, University of Chicago Press, vol. 12(1), pages 91-110.
    6. Brett Danaher & Samita Dhanasobhon & Michael D. Smith & Rahul Telang, 2015. "Understanding Media Markets in the Digital Age: Economics and Methodology," NBER Chapters, in: Economic Analysis of the Digital Economy, pages 385-406, National Bureau of Economic Research, Inc.
    7. Brett Danaher & Samita Dhanasobhon & Michael D. Smith & Rahul Telang, 2010. "Converting Pirates Without Cannibalizing Purchasers: The Impact of Digital Distribution on Physical Sales and Internet Piracy," Marketing Science, INFORMS, vol. 29(6), pages 1138-1151, 11-12.
    8. Rajeev H. Dehejia & Sadek Wahba, 2002. "Propensity Score-Matching Methods For Nonexperimental Causal Studies," The Review of Economics and Statistics, MIT Press, vol. 84(1), pages 151-161, February.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Marc Bourreau & Marianne Lumeau & Francois Moreau & Jordana Viotto da Cruz, 2019. "Recent or Free? An Experimental Study of the Motivations for Pirating Movies," CESifo Working Paper Series 8036, CESifo.
    2. Luis Aguiar & Jörg Claussen & Christian Peukert, 2018. "Catch Me If You Can: Effectiveness and Consequences of Online Copyright Enforcement," Information Systems Research, INFORMS, vol. 29(3), pages 656-678, September.
    3. Kanazawa, Kyogo & Kawaguchi, Kohei, 2022. "Displacement effects of public libraries," Journal of the Japanese and International Economies, Elsevier, vol. 66(C).
    4. Peng, Shuxia & Li, Bo & Wu, Shuang, 2023. "Presence of piracy and legal protection: Decisions in the digital goods market under different contracts," European Journal of Operational Research, Elsevier, vol. 309(2), pages 578-596.
    5. Bradley, Wendy A. & Kolev, Julian, 2023. "How does digital piracy affect innovation? Evidence from software firms," Research Policy, Elsevier, vol. 52(3).
    6. Tarun Jain & Jishnu Hazra & T. C. Edwin Cheng, 2020. "Illegal Content Monitoring on Social Platforms," Production and Operations Management, Production and Operations Management Society, vol. 29(8), pages 1837-1857, August.
    7. Tyrowicz, Joanna & Krawczyk, Michal & Hardy, Wojciech, 2020. "Friends or foes? A meta-analysis of the relationship between “online piracy” and the sales of cultural goods," Information Economics and Policy, Elsevier, vol. 53(C).
    8. Shijie Lu & Koushyar Rajavi & Isaac Dinner, 2021. "The Effect of Over-the-Top Media Services on Piracy Search: Evidence from a Natural Experiment," Marketing Science, INFORMS, vol. 40(3), pages 548-568, May.
    9. Wojciech Hardy & Michal Krawczyk & Joanna Tyrowicz, 2015. "Friends or foes? A meta-analysis of the link between "online piracy" and sales of cultural goods," Working Papers 2015-23, Faculty of Economic Sciences, University of Warsaw.
    10. Brett Danaher & Michael D. Smith & Rahul Telang, 2014. "Piracy and Copyright Enforcement Mechanisms," Innovation Policy and the Economy, University of Chicago Press, vol. 14(1), pages 25-61.
    11. J. McKenzie & W. D. Walls, "undated". "File Sharing and Film Revenues: An Empirical Analysis," Working Papers 2013-01, Department of Economics, University of Calgary.
    12. Steven James Watson & Daniel John Zizzo & Piers Fleming, 2015. "Determinants of Unlawful File Sharing: A Scoping Review," PLOS ONE, Public Library of Science, vol. 10(6), pages 1-23, June.
    13. Christophe Bellégo & Romain De Nijs, 2020. "The Unintended Consequences of Antipiracy Laws on Markets with Asymmetric Piracy: The Case of the French Movie Industry," Information Systems Research, INFORMS, vol. 31(4), pages 1064-1086, December.
    14. C. Bellégo & R. De Nijs, 2015. "The redistributive effect of online piracy on the box office performance of American movies in foreign markets," Documents de Travail de l'Insee - INSEE Working Papers g2015-17, Institut National de la Statistique et des Etudes Economiques.
    15. Wojciech Hardy, 2022. "Brace yourselves, pirates are coming! the effects of Game of Thrones leak on TV viewership," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 46(1), pages 27-55, March.
    16. Anna Maria Bagnasco, 2012. "Economia della pirateria filmica: una ricerca esplorativa," ECONOMIA E DIRITTO DEL TERZIARIO, FrancoAngeli Editore, vol. 2012(3), pages 433-448.
    17. Wojciech Hardy & Michal Krawczyk & Joanna Tyrowicz, 2014. "Internet piracy and book sales: A field experiment," Artefactual Field Experiments 00696, The Field Experiments Website.
    18. Anthony Koschmann & Douglas Bowman, 2017. "Simultaneous Estimation of Legal and Illegal Supply and Demand: The Case of Motion Pictures," International Economic Journal, Taylor & Francis Journals, vol. 31(4), pages 555-577, October.
    19. Cuntz, Alexander & Bergquist, Kyle, 2022. "Exclusive content and platform competition in Latin America," Information Economics and Policy, Elsevier, vol. 60(C).
    20. Liye Ma & Alan L. Montgomery & Param Vir Singh & Michael D. Smith, 2014. "An Empirical Analysis of the Impact of Pre-Release Movie Piracy on Box Office Revenue," Information Systems Research, INFORMS, vol. 25(3), pages 590-603, September.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jeborg:v:209:y:2023:i:c:p:334-347. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/jebo .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.