Published Date: 03-07-13
A new study released today and conducted by academic researchers at Wellesley College and Carnegie Mellon University found a causal relationship between the shutdown of one of the largest sources of illegal downloads, Megaupload, and an increase in online movie sales and rentals.
At its peak, the website Megaupload.com boasted “more than one billion visits to the site, more than 150 million registered users, and 50 million daily visitors and accounting for four percent of the total traffic on the internet,” according to the Justice Department indictment, and allegedly generated “$175 million in illegal profits through advertising revenue and selling premium memberships.”
The site’s founder, Kim Dotcom, lived a notoriously lavish lifestyle fueled by the profits from others’ stolen creative works – allegedly.
The authors of the study looked at data from two studios across 12 countries and included controls for country-specific trends and the Christmas holiday and concluded that “revenues from digital sales and rentals for the two studios were 6-10% higher than they would have been if Megaupload hadn’t been shutdown.”
The Wall Street Journal wrote:
The findings bolster studios’ arguments that piracy harms their businesses. Some critics of the entertainment industry have argued that piracy results from a lack of legal alternatives, and many who illegally download media would never have paid.
The research concludes for some people that isn’t true. The shutdown of Megaupload caused weekly digital sales of movies from the two studios to grow by between 10,500 and 15,300 units from what would otherwise have been expected, the study said. Rentals grew between 13,700 and 24,000 units a week.
But the causal relationship doesn’t end there. More than two million Americans rely on film and television to make a living, and the industry includes nearly 95,000 businesses, which can be found in every state in the country. That loss of revenue has a real life impact in terms of jobs, wages, and quality of life for middle class families and small businesses.
