Digital Piracy, Creative Productivity, and Customer Care Effort: Evidence from the Digital Publishing Industry

We empirically investigate how writers’ output is affected by copyright piracy using data from a Chinese digital publishing platform. We identify two measurements of writers’ output—creative productivity and customer care—which are also affected by readers’ feedback through purchasing, tipping, and commenting. We take advantage of an exogenous event—the termination of a free personal storage service and search function by a leading Chinese cloud storage provider in June 2016—to causally identify the effects of the resulting reduced copyright piracy on writers’ efforts. Using a difference-in-differences modeling approach, we compare the changes in average writer behavior before and after the event across two groups of writers: (1) writers who have profit-sharing contracts with the platform and (2) those who do not. We find that after the termination, contracted writers increased their creative productivity efforts in terms of quantity without sacrificing quality but reduced their customer care efforts. However, these effects are absent for noncontracted writers. Our study is among the first to provide empirical support for the positive effect of digital intellectual property rights infringement reduction on creative productivity.