Megaupload Case Research from SSRN: Piracy and Movie Revenues: Evidence from Megaupload by Christian Peukert and Jörg Claussen

Piracy and Movie Revenues: Evidence from Megaupload

Christian Peukert: Ludwig-Maximilians-University Munich, Institute for Strategy, Technology and Organization

Jörg Claussen: Copenhagen Business School – Department of Innovation and Organizational Economics

October 22, 2012

Abstract:

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.

Keywords: Piracy, Movie Revenues, Megaupload, Natural Experiment

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Suggested Citation

Peukert, Christian and Claussen, Jörg, Piracy and Movie Revenues: Evidence from Megaupload (October 22, 2012). Available at SSRN: http://ssrn.com/abstract=2176246 or http://dx.doi.org/10.2139/ssrn.2176246

Contact Information

Christian Peukert (Contact Author)

Ludwig-Maximilians-University Munich, Institute for Strategy, Technology and Organization ( email )

Schackstr. 4/III

München, 80539

Germany

+49 89 2180 6066 (Phone)

HOME PAGE: http://www.christian-peukert.com

Jörg Claussen

Copenhagen Business School – Department of Innovation and Organizational Economics ( email )

Kilevej 14A

Frederiksberg, 2000

Denmark