Danaher, Smith and Telang (2016)

Source Details

Danaher, Smith and Telang (2016)
Title:	Website Blocking Revisited: The Effect of the UK November 2014 Blocks on Consumer Behavior
Author(s):	Danaher, B., Smith, M. D., Telang, R.
Year:	2016
Citation:	Danaher, B., Smith, M.D. and Telang, R. (2016) Website Blocking Revisited: The Effect of the UK November 2014 Blocks on Consumer Behavior. Report conducted as part of the Carnegie Mellon University’s Initiative for Digital Entertainment Analytics.
Link(s):	Definitive , Open Access
Key Related Studies:	Rob and Waldfogel (2006) Danaher et al. (2010) Danaher and Waldfogel (2012) Danaher et al. (2015) Dey et al. (2015)
Discipline:	K42: Illegal Behavior and the Enforcement of Law L82: Entertainment • Media O34: Intellectual Property and Intellectual Capital
Linked by:

About the Data
Data Description:	The study observes the monthly user data for over 50,000 UK internet users, based on data from PanelTrack. The study segments user groups based on their frequency of visits to blocked sites, unblocked pirate sites, VPN sites, and legal video sites (incl. subscription services). Data is analysed using a difference-in-difference model.
Data Type:	Primary and Secondary data
Secondary Data Sources:	PanelTrack
Data Collection Methods:	Web analytic (online user trace data)
Data Analysis Methods:	Descriptive statistics (counting; means reporting; cross-tabulation) Regression Analysis
Industry(ies):	Film and motion pictures Television programmes
Country(ies):	United Kingdom
Cross Country Study?:	No
Comparative Study?:	No
Literature review?:	No
Government or policy study?:	No
Time Period(s) of Collection:	August 2014 – February 2015
Funder(s):	Motion Picture Association of America

Abstract

“Whether and how copyrights should be enforced in the digital age has become an important policy question and an important question for empirical research. In a prior study, we found that the court ordered blocking of the Pirate Bay website in the UK in April 2012 had only a small impact on total piracy and no impact on paid legal streaming, but that the blocking of 19 major piracy websites in November 2013 caused a significant decrease in total piracy and a significant increase in usage of paid legal streaming sites.
In this update, we ask whether the blocking of 53 piracy websites in the UK in November 2014 — which more than doubled the total number of sites being blocked in the country — had an impact on consumer behavior and how that impact compared to the previous blocks. We found that these blocks caused a 90% drop in visits to the blocked sites while causing no increase in usage of unblocked sites. This led to a 22% decrease in total piracy for all users affected by the blocks (or a 16% decrease across all users overall). We also found that these blocks caused a 6% increase in visits to paid legal streaming sites like Netflix and a 10% increase in videos viewed on legal ad-supported streaming sites like BBC and Channel 5.
The evidence suggests that blocking large numbers of sites can still “move the dial” in terms of consumer behavior, but that there may be diminishing returns as remaining pirates may be more dispersed or else have lower willingness to pay for legal content. Nonetheless, such blocks can serve to mitigate the possibility of a long-term return to the prior status quo.”

Main Results of the Study

• Blocking websites does greatly reduce the number of visits to that website; the study observes a nearly 90% reduction to those blocked websites (from 86,735 visits in the pre-block period, to 10,474 visits in the post-block period) and a 22% reduction in visits to piracy sites across all treated segments. However, the study notes that uses of VPNs may be a factor in ongoing access to blocked sites - the study finds that for every 10 additional visits to a site prior to blocking, this increases visits to VPN sites post-block by 30%.
• Blocking websites does not necessarily increase uptake in usage of other unblocked piracy websites. The study suggests this is due to users being unable to find a trustworthy source to replace the blocked website. Instead, the study finds an increase in the number of uses to ad-supported legal streaming sites and paid legal services post-block.

Policy Implications as Stated By Author

The study suggests that website blocking in the UK can ‘cause a decrease in total piracy and increase legal consumption’.

Coverage of Study

Coverage of Fundamental Issues

Issue	Included within Study
Relationship between protection (subject matter/term/scope) and supply/economic development/growth/welfare
Relationship between creative process and protection - what motivates creators (e.g. attribution; control; remuneration; time allocation)?
Harmony of interest assumption between authors and publishers (creators and producers/investors)
Effects of protection on industry structure (e.g. oligopolies; competition; economics of superstars; business models; technology adoption)
Understanding consumption/use (e.g. determinants of unlawful behaviour; user-generated content; social media)

Coverage of Evidence Based Policies

Issue	Included within Study
Nature and Scope of exclusive rights (hyperlinking/browsing; reproduction right)
Exceptions (distinguish innovation and public policy purposes; open-ended/closed list; commercial/non-commercial distinction)
Mass digitisation/orphan works (non-use; extended collective licensing)
Licensing and Business models (collecting societies; meta data; exchanges/hubs; windowing; crossborder availability)
Fair remuneration (levies; copyright contracts)
Enforcement (quantifying infringement; criminal sanctions; intermediary liability; graduated response; litigation and court data; commercial/non-commercial distinction; education and awareness)

Datasets

Sample size:	58,809
Level of aggregation:	Users
Period of material under study:	August 2014 – February 2015