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Shutting down Megaupload led to more sales and rentals

“TOLD YOU SO,” SAY STUDIOS: In research to be released today, a pair of academics has found the shutdowns of P2P sites Megaupload and Megavideo last year led to more digital sales and rentals for two major movie studios in 12 countries, including the U.S., the Wall Street Journal reports. "We conclude that shutting down Megaupload and Megavideo caused some customers to shift from cyberlocker-based piracy to purchasing or renting through legal digital channels," researchers Brett Danaher and Michael Smith wrote. Online revenue was between 6% and 10% higher than it would have otherwise been, according to their findings. The study used data provided by the two studios on digital transactions in the months following the January 2012 closing of Megaupload and arrest of its controversial head, Kim Dotcom. While previous research has studied the impact of online piracy on the sales of music and movies, none has looked at the impact of the closure of a major piracy operation, Danaher and Smith claim. Some 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. On the other hand, the researchers studied online sales and rentals, not DVD sales or ticket sales. What’s more, their data extended only 18 weeks after the closure of Megaupload, and they admitted the long-term effects were unknown. (3/7a)

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