IDEAS home Printed from https://ideas.repec.org/a/inm/orisre/v31y2020i4p1064-1086.html
   My bibliography  Save this article

The Unintended Consequences of Antipiracy Laws on Markets with Asymmetric Piracy: The Case of the French Movie Industry

Author

Listed:
  • Christophe Bellégo

    () (Centre De Recherche En éConomie Et Statistique, École Nationale De La Statistique Et De L'administration Économique, 91120 Palaiseau, France;)

  • Romain De Nijs

    () (romain.de-nijs@polytechnique.edu)

Abstract

Using the French antipiracy law known as HADOPI as a natural experiment, we study the asymmetric effects of online piracy on cinema admissions. Applying four estimation strategies at different levels of observation (town, movie, country, and consumer), we find that the introduction of the law is associated with a 9% increase in the market share of American movies. This increase occurs at the expense of other movies. Although we find an increase in overall admissions, this effect is not statistically significant. These findings primarily originate from a high initial level of asymmetric piracy between American and other movies, which was attenuated by the antipiracy law, resulting in a fiercer competition between movies. The results can also be explained by the behavior of younger consumers and might be caused by consumers’ budget or time constraints. We exclude positive shocks on the relative quality of American movies, the advent of three-dimensional movies, supply-side reactions by firms, and word-of-mouth effects of illegal downloads as explanations for this redistributive effect.

Suggested Citation

  • 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.
  • Handle: RePEc:inm:orisre:v:31:y:2020:i:4:p:1064-1086
    DOI: 10.1287/isre.2020.0932
    as

    Download full text from publisher

    File URL: https://doi.org/10.1287/isre.2020.0932
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Anita Elberse & Jehoshua Eliashberg, 2003. "Demand and Supply Dynamics for Sequentially Released Products in International Markets: The Case of Motion Pictures," Marketing Science, INFORMS, vol. 22(3), pages 329-354.
    2. Rob, Rafael & Waldfogel, Joel, 2006. "Piracy on the High C's: Music Downloading, Sales Displacement, and Social Welfare in a Sample of College Students," Journal of Law and Economics, University of Chicago Press, vol. 49(1), pages 29-62, April.
    3. Hilger, James & Rafert, Greg & Villas-Boas, Sofia Berto, 2007. "Expert Opinion and the Demand for Experience Goods: An Experimental Approach," CUDARE Working Papers 6055, University of California, Berkeley, Department of Agricultural and Resource Economics.
    4. A. Colin Cameron & Jonah B. Gelbach & Douglas L. Miller, 2008. "Bootstrap-Based Improvements for Inference with Clustered Errors," The Review of Economics and Statistics, MIT Press, vol. 90(3), pages 414-427, August.
    5. Timothy G. Conley & Christopher R. Taber, 2011. "Inference with "Difference in Differences" with a Small Number of Policy Changes," The Review of Economics and Statistics, MIT Press, vol. 93(1), pages 113-125, February.
    6. Laurina Zhang, 2018. "Intellectual Property Strategy and the Long Tail: Evidence from the Recorded Music Industry," Management Science, INFORMS, vol. 64(1), pages 24-42, January.
    7. Orbach, Barak Y. & Einav, Liran, 2007. "Uniform prices for differentiated goods: The case of the movie-theater industry," International Review of Law and Economics, Elsevier, vol. 27(2), pages 129-153.
    8. Zentner, Alejandro, 2006. "Measuring the Effect of File Sharing on Music Purchases," Journal of Law and Economics, University of Chicago Press, vol. 49(1), pages 63-90, April.
    9. McKenzie, Jordi, 2017. "Graduated response policies to digital piracy: Do they increase box office revenues of movies?," Information Economics and Policy, Elsevier, vol. 38(C), pages 1-11.
    10. 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.
    11. Michela Giorcelli & Petra Moser, 2020. "Copyrights and Creativity: Evidence from Italian Opera in the Napoleonic Age," Journal of Political Economy, University of Chicago Press, vol. 128(11), pages 4163-4210.
    12. 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.
    13. Sudip Bhattacharjee & Ram D. Gopal & Kaveepan Lertwachara & James R. Marsden & Rahul Telang, 2007. "The Effect of Digital Sharing Technologies on Music Markets: A Survival Analysis of Albums on Ranking Charts," Management Science, INFORMS, vol. 53(9), pages 1359-1374, September.
    14. Richard H. Thaler, 2008. "Mental Accounting and Consumer Choice," Marketing Science, INFORMS, vol. 27(1), pages 15-25, 01-02.
    15. Rafael Rob & Joel Waldfogel, 2007. "Piracy On The Silver Screen," Journal of Industrial Economics, Wiley Blackwell, vol. 55(3), pages 379-395, September.
    16. Giorcelli, Michela & Moser, Petra, 2020. "Copyright and Creativity. Evidence from Italian Opera During the Napoleonic Age," CEPR Discussion Papers 14498, C.E.P.R. Discussion Papers.
    17. Bhattacharjee, Sudip & Gopal, Ram D & Lertwachara, Kaveepan & Marsden, James R, 2006. "Impact of Legal Threats on Online Music Sharing Activity: An Analysis of Music Industry Legal Actions," Journal of Law and Economics, University of Chicago Press, vol. 49(1), pages 91-114, April.
    18. Telang, Rahul & Waldfogel, Joel, 2018. "Piracy and new product creation: A Bollywood story," Information Economics and Policy, Elsevier, vol. 43(C), pages 1-11.
    19. 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.
    20. McCalman, Phillip, 2005. "International diffusion and intellectual property rights: An empirical analysis," Journal of International Economics, Elsevier, vol. 67(2), pages 353-372, December.
    21. James Hilger & Greg Rafert & Sofia Villas-Boas, 2011. "Expert Opinion and the Demand for Experience Goods: An Experimental Approach in the Retail Wine Market," The Review of Economics and Statistics, MIT Press, vol. 93(4), pages 1289-1296, November.
    22. Felix Oberholzer-Gee & Koleman Strumpf, 2007. "The Effect of File Sharing on Record Sales: An Empirical Analysis," Journal of Political Economy, University of Chicago Press, vol. 115, pages 1-42.
    23. Matthew Gentzkow, 2007. "Valuing New Goods in a Model with Complementarity: Online Newspapers," American Economic Review, American Economic Association, vol. 97(3), pages 713-744, June.
    24. Marianne Bertrand & Esther Duflo & Sendhil Mullainathan, 2004. "How Much Should We Trust Differences-In-Differences Estimates?," The Quarterly Journal of Economics, Oxford University Press, vol. 119(1), pages 249-275.
    25. Liran Einav, 2007. "Seasonality in the U.S. motion picture industry," RAND Journal of Economics, RAND Corporation, vol. 38(1), pages 127-145, March.
    26. Liebowitz, Stan J, 2006. "File Sharing: Creative Destruction or Just Plain Destruction?," Journal of Law and Economics, University of Chicago Press, vol. 49(1), pages 1-28, April.
    27. Meyer, Bruce D, 1995. "Natural and Quasi-experiments in Economics," Journal of Business & Economic Statistics, American Statistical Association, vol. 13(2), pages 151-161, April.
    28. Stephen A. Spiller, 2011. "Opportunity Cost Consideration," Journal of Consumer Research, Oxford University Press, vol. 38(4), pages 595-610.
    29. Anindya Ghose & Michael D. Smith & Rahul Telang, 2006. "Internet Exchanges for Used Books: An Empirical Analysis of Product Cannibalization and Welfare Impact," Information Systems Research, INFORMS, vol. 17(1), pages 3-19, March.
    30. Zentner Alejandro, 2005. "File Sharing and International Sales of Copyrighted Music: An Empirical Analysis with a Panel of Countries," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 5(1), pages 1-17, October.
    31. Heath, Chip & Soll, Jack B, 1996. "Mental Budgeting and Consumer Decisions," Journal of Consumer Research, Oxford University Press, vol. 23(1), pages 40-52, June.
    32. Bai, Jie & Waldfogel, Joel, 2012. "Movie piracy and sales displacement in two samples of Chinese consumers," Information Economics and Policy, Elsevier, vol. 24(3), pages 187-196.
    33. Holloway, Isaac R., 2017. "Learning via sequential market entry: Evidence from international releases of U.S. movies," Journal of International Economics, Elsevier, vol. 104(C), pages 104-121.
    34. 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.
    35. Brett Danaher & Michael D. Smith & Rahul Telang & Siwen Chen, 2014. "The Effect of Graduated Response Anti-Piracy Laws on Music Sales: Evidence from an Event Study in France," Journal of Industrial Economics, Wiley Blackwell, vol. 62(3), pages 541-553, September.
    36. Michela Giorcelli & Petra Moser, 2020. "Copyright and Creativity. Evidence from Italian Opera During the Napoleonic Age," NBER Working Papers 26885, National Bureau of Economic Research, Inc.
    37. Adermon, Adrian & Liang, Che-Yuan, 2014. "Piracy and music sales: The effects of an anti-piracy law," Journal of Economic Behavior & Organization, Elsevier, vol. 105(C), pages 90-106.
    38. Danaher, Brett & Smith, Michael D., 2014. "Gone in 60 Seconds: The Impact of the Megaupload Shutdown on Movie Sales," International Journal of Industrial Organization, Elsevier, vol. 33(C), pages 1-8.
    39. 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.
    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. Christophe BELLEGO & Romain DE NIJS, 2020. "The Unintended Consequences of Anti-Piracy Laws on Markets with Asymmetric Piracy: The Case of the French Movie Industry," Working Papers 2020-03, Center for Research in Economics and Statistics.
    2. 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.
    3. 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.
    4. 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).
    5. 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.
    6. 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.
    7. Tobias Kretschmer & Christian Peukert, 2020. "Video Killed the Radio Star? Online Music Videos and Recorded Music Sales," Information Systems Research, INFORMS, vol. 31(3), pages 776-800, September.
    8. Milan Miric & Lars Bo Jeppesen, 2020. "Does piracy lead to product abandonment or stimulate new product development?: Evidence from mobile platform‐based developer firms," Strategic Management Journal, Wiley Blackwell, vol. 41(12), pages 2155-2184, December.
    9. 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.
    10. Adermon, Adrian & Liang, Che-Yuan, 2014. "Piracy and music sales: The effects of an anti-piracy law," Journal of Economic Behavior & Organization, Elsevier, vol. 105(C), pages 90-106.
    11. Emmi Martikainen, 2014. "Does file-sharing reduce DVD sales?," Netnomics, Springer, vol. 15(1), pages 9-31, July.
    12. 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.
    13. McKenzie, Jordi, 2017. "Graduated response policies to digital piracy: Do they increase box office revenues of movies?," Information Economics and Policy, Elsevier, vol. 38(C), pages 1-11.
    14. Burmester, Alexa B. & Eggers, Felix & Clement, Michel & Prostka, Tim, 2016. "Accepting or fighting unlicensed usage: Can firms reduce unlicensed usage by optimizing their timing and pricing strategies?," International Journal of Research in Marketing, Elsevier, vol. 33(2), pages 343-356.
    15. Shijie Lu & Xin (Shane) Wang & Neil Bendle, 2020. "Does Piracy Create Online Word of Mouth? An Empirical Analysis in the Movie Industry," Management Science, INFORMS, vol. 66(5), pages 2140-2162, May.
    16. Batikas, Michail & Claussen, Jörg & Peukert, Christian, 2019. "Follow the money: Online piracy and self-regulation in the advertising industry," International Journal of Industrial Organization, Elsevier, vol. 65(C), pages 121-151.
    17. Herz, Benedikt & Kiljański, Kamil, 2018. "Movie piracy and displaced sales in Europe: Evidence from six countries," Information Economics and Policy, Elsevier, vol. 43(C), pages 12-22.
    18. 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.
    19. Laurina Zhang, 2018. "Intellectual Property Strategy and the Long Tail: Evidence from the Recorded Music Industry," Management Science, INFORMS, vol. 64(1), pages 24-42, January.
    20. 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.

    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:inm:orisre:v:31:y:2020:i:4:p:1064-1086. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Matthew Walls). General contact details of provider: https://edirc.repec.org/data/inforea.html .

    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 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.