Piracy and box office movie revenues: Evidence from Megaupload

Christian Peukert (), Jörg Claussen and Tobias Kretschmer

International Journal of Industrial Organization, 2017, vol. 52, issue C, 188-215

Abstract: In this paper we evaluate the heterogeneous effects of online copyright enforcement. We ask whether the unexpected shutdown of the popular file hosting platform Megaupload had a differential effect on box office revenues of wide-release vs. niche movies. Identification comes from a comparison of movies that were available on Megaupload to those that were not. We show that only movies that premiere in a relatively large number of theaters benefitted from the shutdown of Megaupload. The average effect, however, is negative. We provide suggestive evidence that this result is driven by information externalities. The idea is that online piracy acts as a mechanism to spread information about product characteristics across consumers with different valuations for the product. Our results question the effectiveness of blanket public anti-piracy policy, not only from a consumer perspective, but also from a producer perspective.

Keywords: Piracy; Movie Revenues; Megaupload; Natural Experiment (search for similar items in EconPapers)
JEL-codes: D83 L82 M37 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (45)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:indorg:v:52:y:2017:i:c:p:188-215

DOI: 10.1016/j.ijindorg.2016.12.006

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