Friday, September 4, 2015
BRETT DANAHER, Wellesley College - Department of Economics
MICHAEL D. SMITH, Carnegie Mellon University - H. John Heinz III School of Public Policy and Management
RAHUL TELANG, Carnegie Mellon University - H. John Heinz III School of Public Policy and Management
[...] In this paper we seek to study how consumer behavior changes when Internet Service Providers are required to block access to major piracy websites. We do this in the context of two court-ordered events affecting consumers in the UK: The blocking order directed at The Pirate Bay in May 2012, and blocking orders directed at 19 major piracy sites in October and November 2013.
Our results show that blocking The Pirate Bay had little impact on consumption through legal channels — instead, consumers seemed to turn to other piracy sites, Pirate Bay “mirror” sites, or Virtual Private Networks that allowed them to circumvent the block. In contrast, blocking 19 different major piracy sites caused users of those sites to increase their usage of paid legal streaming sites such as Netflix by 12% on average. The lightest users of the blocked sites (and thus the users least affected by the blocks, other than the control group) increased their clicks on paid streaming sites by 3.5% while the heaviest users of the blocked sites increased their paid streaming clicks by 23.6%, strengthening the causal interpretation of the results.
Our results suggest that website blocking requires persistent blocking of a number of piracy sites in order to effectively migrate pirates to legal channels.