Bellégo and Nijs (2020)
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Source Details
| Bellégo and Nijs (2020) | |
| Title: | The Unintended Consequences of Anti-Piracy Laws on Markets with Asymmetric Piracy: The Case of the French Movie Industry |
| Author(s): | Bellégo, C., De Nijs, R. |
| Year: | 2020 |
| Citation: | Bellégo, C., & De Nijs, R. (2020). The Unintended Consequences of Antipiracy Laws on Markets with Asymmetric Piracy: The Case of the French Movie Industry. Information Systems Research, 31(4), 1064-1086. |
| Link(s): | Definitive , Open Access |
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| About the Data | |
| Data Description: | The study uses town-level broadband data from Q4 2011, movie sales data from Rentrak and Médiamétrie (Oct 2008 - Apr 2011), and French movie sales data (2007 - 2011). International movie sales data (Jan 2007 - Dec 2011) were collected from 18 European countries. Consumer-level data came from three theaters (2008 - 2011) in two French cities. |
| Data Type: | Primary and Secondary data |
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| Cross Country Study?: | No |
| Comparative Study?: | No |
| Literature review?: | No |
| Government or policy study?: | No |
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Abstract
“Using the French anti-piracy law known as HADOPI as a natural experiment, we study the asymmetric effects of online piracy on cinema admissions. Applying four estimation strategies at different levels of observation (town, movie, country, and consumer), we find that the introduction of the law is associated with a 9% increase in the market share of American movies. This increase occurs at the expense of other movies. Although we find an increase in overall admissions, this effect is not statistically significant. These findings primarily originate from a high initial level of asymmetric piracy between American and other movies, which was attenuated by the anti-piracy law, resulting in a fiercer competition between movies. The results can also be explained by the behavior of younger consumers, and might be caused by consumers’ budget or time constraints. We exclude positive shocks on the relative quality of American movies, the advent of 3D movies, supply side reactions by firms, and word of mouth effects of illegal downloads as explanations for this redistributive effect.”
Main Results of the Study
"We observe an increase in American movies sales for younger consumers, relative to older ones, associated with HADOPI enforcement. The increase in the consumption of American movies is decreasing with age. Compared to consumers between 50 and 80 years of age, and compared to the sales of French movies, the increase in American movie sales following HADOPI is approximately 19% (statistically significant at the 1% level) for consumers between 10 and 29 years old and is twice the value of the increase for consumers between 30 and 49 years old, which is approximately 10%. A test confirms that β1 is statistically different from β2 at the 1% level. This is consistent with illegal media consumption on the Internet decreasing with age (see Hadopi (2011))." "The coefficients η1 and η2 are negative and indicate that sales of French movies to younger consumers decreased after the introduction of the HADOPI law. It confirms the substitution effect of the anti-piracy law to the benefit of American movies. The fact that 2 × η1 + β1, 2 × η2 + β2, and 2 × η1 + 2 × η2 + β1 + β2 are slightly negative provides evidence of a strong substitution effect between American and French films without growth in total demand." "The anti-piracy law has modified the behavior of young consumers who are subscribed to an unlimited access card to movies." "We find that all analyses converge to show an increase in the U.S. market share of approximately 9%." Towns with higher levels of online piracy, characterized by a greater broadband Internet penetration, experienced a significant increase in American movie admissions and a corresponding decrease in admissions for French movies after introducing the HADOPI law. There is weak statistical evidence suggesting a market expansion effect associated with the HADOPI law, indicating potential growth in total admissions. However, the results are not conclusive due to significant standard errors and variations in effect sizes across different specifications. American movie sales saw an increase among younger consumers who were more likely to engage in illegal downloading, compared to French movies and older consumers. The findings ruled out supply reactions from U.S. film distributors in response to the HADOPI law, as there were no significant changes in terms of quantity, quality, or release speed of American movies in France. The findings imply that the HADOPI law had an impact on consumer behaviour, particularly among the younger demographic. The HADOPI law may also have led to a business-stealing effect, where consumers shifted from illegally downloading American movies to legally watching them in theatres. This, in turn, led to a reduction in theatre attendance for other (non-American) movies. it also hints at the concept of mental accounting, where consumers allocate budgets for different categories of expenses and adjust their behavior accordingly. The overall industry profit appears to have been redistributed in favour of American movies.
Policy Implications as Stated By Author
The research suggests that, as proved by the effects of anti-piracy measures on movie consumption may not align with cultural policies aimed at supporting domestic film production and cultural diversity. Thus, they suggest that governments must balance enforcing copyright protection and promoting cultural diversity "to prevent a single culture from dominating the others". They suggest the government learn from the European Commission's approach, which supports right owners' enforcement but also introduces regulations requiring streaming platforms to dedicate a significant portion of their catalogues to European content.
Coverage of Study
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