Aguiar, Claussen and Peukert (2018)
|Aguiar, Claussen and Peukert (2018)|
|Title:||Catch Me if You Can: Effectiveness and Consequences of Online Copyright Enforcement|
|Author(s):||Luis Aguiar, Jorg Claussen, Christian Peukert|
|Citation:||Aguiar, L., Claussen, J. And Peukert, C. (2018) Catch Me if You Can: Effectiveness and Consequences of Online Copyright Enforcement. Information Systems Research, 29(3), pp 656-678|
|Key Related Studies:|
|About the Data|
|Data Description:||The data was obtained from a natural experiment following the shut down of the German unlicensed streaming website, kino.to. The browsing history (obtained via NetView) of 5,000 users in Germany, France, Italy and UK were examined, totalling over one million observations. Variables included: piracy aspects (e.g. consumption, piracy visits per week, duration etc.); licensed consumption; user types, and; news consumption. A differences-in-differences model was used for analysis.|
|Data Type:||Primary and Secondary data|
|Secondary Data Sources:|
|Data Collection Methods:|
|Data Analysis Methods:|
|Cross Country Study?:||Yes|
|Government or policy study?:||No|
|Time Period(s) of Collection:||
“We evaluate the unexpected shutdown of kino.to, a major platform for unlicensed video streaming in the German market. Using highly disaggregated clickstream data in a difference-in-differences setting, we compare the web behavior of 20,000 consumers in Germany and three control countries. We find that this intervention was not very effective in reducing unlicensed consumption or encouraging licensed consumption, mainly because users quickly switch to alter- native unlicensed sites. We highlight that the shutdown additionally had important unintended externalities. Individuals who never visited kino.to and who additionally clicked on news articles that covered the shutdown increased their visits to piracy websites substantially. We show that this effect largely comes from articles that explicitly mention alternative websites or suggest that users do not have to fear legal consequences from unlicensed streaming. Finally, we document that the unlicensed video streaming market is much more fragmented after the shutdown, potentially affecting future interventions, at least in the short run. We argue that our results can be helpful to understand why online piracy rates are still high, despite a plethora of enforcement efforts.”
Main Results of the Study
Whilst the immediate effects of a shut-down of unlicensed streaming site decline visits to piracy websites overall (by 27.2%), within 5 weeks this returns to pre-intervention levels. Of most note, following the shutdown of kino.tv, non-users increased their consumption of piracy content (0.8%). The authors posit several reasons for this: first, as users may have previously used alternative streaming sites they may simply have increased their consumption on these sites, and; the news coverage of the kino.tv shutdown was skewed towards suggesting there were no legal consequences for piracy on the consumers behalf, thus seemingly encouraging infringement (only 11% cautioned on the legal repercussions of visiting pirate sites).
Furthermore, whilst piracy levels in Germany dropped overall following the shutdown (by 4.5%), there has been no corresponding rise in consumption of licensed content; instead, the authors suggest that the shutdown has reduced overall welfare, as consumer surplus is apparently reduced (estimating a loss of 1.16 - 36.74 million Euro per week). In regards alternative streaming sites, the study shows that the shut-down resulted in a high concentration of the piracy market (more than doubling the market percentage shares of the next largest competitors within four weeks).
Policy Implications as Stated By Author
The study highlights that costly shutdowns only reduce piracy in the short-term, and may indirectly concentrate the market for pirated goods following this. As such, the authors suggest the following in an effort to reduce piracy:
• Public enforcement - Use measures such as reducing advertising revenues on piracy websites, or by shutting down multiple websites at a time (rather than a piecemeal approach).
• Taxes and subsidies - Create a tax on legalised productions/copies as opposed to fining illegal productions.
• Private enforcement - Create more effective low-cost business models, or remove DRMs to licensed content to maximise consumer convenience.