M&E Daily

Legal Crackdown May Finally Be Putting a Dent in Piracy

By Paul Sweeting

Efforts to crackdown on online piracy by taking legal action against individual web sites that facilitate it are often likened to a game of Whac-a-Mole — an endless and ultimately pointless exercise in chasing a moving target. But some intriguing evidence has emerged lately that at least some moles may be worth whacking.

According to a new study by researchers at Carnegie-Mellon University and Wellesley College, the shutdown of Megaupload and its affiliated site Megavideo last year led to an increase in the amount of legal online movie rentals and sales seen by the studios. The researchers looked at data from 12 countries, including the U.S., provided by two studios and found that online revenue was 6% to 10% higher since the shutdown than it would have been were Megaupload still in business.

“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,” the researchers said.

The data for the study were provided through Carnegie-Mellon’s Initiative for Digital Entertainment Analytics, which receives funding from the MPAA, but neither the researchers nor the study itself were funded by the studios. 

The Megaupload findings come on the heels of a separate report by the NPD Group, which found a significant worldwide decline in illegal online music sharing in 2012, both in terms of the total amount of file-sharing and the number of people engaged in the activity.

According to NPD’s “Annual Music Study 2012,” 40% of consumers who had illegally downloaded music via peer-to-peer services in 2011 reported that they had stopped or downloaded less music from P2P networks in 2012.

The report attributed the decline primarily to the increased use of legal music streaming services. But it said some of the shift in behavior was also do to legal efforts to shut off access to illegal P2P networks like Limewire.

“In recent years, we’ve seen less P2P activity, because the music industry has successfully used litigation to shut down Limewire and other services,” NPD’s senior VP of industry analysis Russ Crupnick said of the findings. “Many of those who continued to use P2P services reported poor experiences, due to rampant spyware and viruses on illegal P2P sites.”

More than two years after Limewire was shut down, nearly 20% of P2P users who reduced or stopped their P2P activity cited the fact that that their preferred service was closed, or that the services they used created issues with spyware and viruses, according to NPD.

While piracy continues to be a problem, and efforts to fight it through the legal system remain slow and frustrating, content owners may at last be able to point to some empirical evidence that it has some effect on overall rates of piracy.