I Want You Back: The Interplay Between Legal Availability and Movie Piracy

Michael Smith, Rahul Telang and Yi Zhang

International Journal of the Economics of Business, 2019, vol. 26, issue 1, 199-216

Abstract: Although it is well known in the academic literature that anti-piracy measures can reduce the demand for pirated content, there are relatively few papers analyzing how legal availability impacts piracy. In this study, we answer two relevant research questions: (1) Does the availability of movies in legal digital channels reduce the demand for digital piracy? (2) Is the level of piracy prior to a movie’s release in a legal digital channel a reliable signal of legal demand after release? We answer these questions using a unique data set provided by a major motion picture studio. Our data contain 1520 catalog movies introduced to iTunes between April 2011 and April 2012. We find that iTunes availability leads to an 11.8% decrease in monthly piracy. We also find that pre-release piracy positively correlates with post-release electronic sell-through sales but not with video-on-demand sales.

Date: 2019
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DOI: 10.1080/13571516.2019.1553293

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