"Piracy and Movie Revenues: Evidence from Megaupload"
The "Süddeutsche Zeitung" as well as several tech blogs are currently reporting on the paper "Piracy and Movie Revenues: Evidence from Megaupload" by Christian Peukert and Jörg Claussen, that analyzes the effects of the January 2012 shutdown of the filehoster "Megaupload" on the movie industry's revenues. We are glad to see the ISTO's research being discussed in such a lively and controversial way!
"In this paper we make use of a quasi-experiment in the market for illegal downloading to study movie box office revenues. Exogenous variation comes from the unexpected shutdown of the popular file hosting platform Megaupload.com on January 19, 2012. The estimation strategy is based on a quasi difference-in-differences approach. We compare box office revenues before and after the shutdown to a matched control group of movies unaffected by the shutdown.
We find that the shutdown had a negative, yet insignificant effect on box office revenues. This counterintuitive result may suggest support for the theoretical perspective of (social) network effects where file-sharing acts as a mechanism to spread information about a good from consumers with zero or low willingness to pay to users with high willingness to pay."