Online Copyright Enforcement, Consumer Behavior, and Market Structure

Taking down copyright-infringing websites is a way to reduce consumption of pirated media content and increase licensed consumption. We analyze the consequences of the shutdown of the most popular German video streaming website - kino.to - in June 2011. Using individual-level clickstream data, we find that the shutdown led to significant but short-lived declines in piracy levels. The streaming piracy market quickly recovered due to the existence of alternative unlicensed platforms, leading to limited substitution into licensed consumption. The fact that the post-shutdown market structure was much more fragmented - and therefore more resistant to future interventions - further questions the effectiveness of the intervention.