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Online Copyright Enforcement, Consumer Behavior, and Market Structure

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Abstract

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 fact that the post-shutdown market structure was much more fragmented - and therefore more resistant to future interventions - further questions the effectiveness of the intervention.

Suggested Citation

  • Luis Aguiar & Jorg Claussen & Christian Peukert, 2015. "Online Copyright Enforcement, Consumer Behavior, and Market Structure," JRC Working Papers on Digital Economy 2015-01, Joint Research Centre.
  • Handle: RePEc:ipt:decwpa:2015-01
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    File URL: https://joint-research-centre.ec.europa.eu/reports-and-technical-documentation/online-copyright-enforcement-consumer-behavior-and-market-structure_en
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    Cited by:

    1. 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.
    2. Imke Reimers, 2016. "Can Private Copyright Protection Be Effective? Evidence from Book Publishing," Journal of Law and Economics, University of Chicago Press, vol. 59(2), pages 411-440.
    3. Debabrata Dey & Antino Kim & Atanu Lahiri, 2019. "Online Piracy and the “Longer Arm” of Enforcement," Management Science, INFORMS, vol. 65(3), pages 1173-1190, March.

    More about this item

    Keywords

    Anti-Piracy Intervention; Copyright; Movie Industry; Natural Experiment;
    All these keywords.

    JEL classification:

    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media
    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy

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