Monday, 11 March 2013

The shutdown of Megaupload caused an increase in digital movie sales and rentals

"This week researchers from Wellesley College and Carnegie Mellon University released a comprehensive study that evaluates the impact of Megaupload’s shutdown on digital movie revenues.
Titled “Gone in 60 Seconds: The Impact of the Megaupload Shutdown on Movie Sales,” the paper compared digital movie revenues across 12 countries. These countries vary in the relative number of Megaupload users, allowing the researchers to estimate the effect of the cyberlocker’s demise on movie sales.
“We were interested in studying the effect of a major piracy site shutdown on demand for digital movie sales since we’ve seen the argument that such efforts could be like a game of whack-a-mole, with a new file-sharing site springing up as soon as one is closed,” assistant professor of Economics Brett Danaher tells TorrentFreak.
“We saw the logic of this argument, but could also imagine a world where shutting down such a large site could change the behavior of some types of consumers,” he adds.
After controlling for a wide range of country-specific trends and other variables the researchers conclude that the latter is the case, Megaupload’s shutdown had a significant effect on digital revenues. The data suggest that the income of two major Hollywood studios was boosted by up to 10 percent.
“Our analysis across 12 countries suggests that, in the 18 weeks following the shutdown, digital revenues for these two studio’s movies were 6-10% higher than they would have been if not for the shutdown,” the researchers write in their paper.
The table [click here to see the table] shows that Megaupload “penetration” was relatively high in Spain and France, where 17% and 11% of Internet subscribers used the site. With less than 2% it was least popular in the United States.
The researchers used these differences for their statistical model and found that movie revenues were affected positively in countries with a high Megaupload penetration.
“For each additional 1% pre-shutdown Megaupload penetration, the post-shutdown sales unit change was 2.5% to 3.8% higher, suggesting that these increases are a causal effect of the shutdown,” they write.
The shutdown of Megaupload caused a 7-10% increase in the number of digital sales and a 4-7% increase in digital rentals.
The results are based on sales numbers reported by two major Hollywood studios, and the researchers suggest that the effect will be similar for other film companies. Whether the effect will remain over time has yet to be seen though."

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