Movie Piracy and Displaced Sales in Europe

A new study published by the European Commission shows that online movie piracy hurts sales….except where it doesn’t. This is also assuming the 30,000 respondents in six countries answered a survey about piracy honestly. Seriously, who takes surveys?

Abstract:
This paper presents estimates of lost movie sales due to unpaid movie consumption. We are the first to provide estimates that are recent, representative of the internet-using population, and cover multiple countries. Based on an online questionnaire with almost 30,000 respondents, we document that one unpaid (first) viewing of a movie displaces about 0.37 units of paid viewings. Using a back-of-the-envelope calculation, we show that this implies that unpaid movie viewings reduced movie sales in Europe by about 4.4% during the sample period. Lost sales differ substantially by country: they are in the range of 1.65% for Germany and 10.4% for Spain. We also find that 94% of lost sales are due to unpaid viewings by a small group of only 20% of consumers. Our findings have important implications for copyright policy.

Source: Social Science Research Network

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