Catch Me If You Can: Effectiveness and Consequences of Online Copyright Enforcement

AbstractWe evaluate the unexpected shutdown of kino.to, a major platform for unlicensed video streaming in the German market. Using highly disaggregated clickstream data in a difference-in-differences setting, we compare the web behavior of 20,000 consumers in Germany and three control countries. We find that this intervention was not very effective in reducing unlicensed consumption or encouraging licensed consumption, mainly because users quickly switch to alternative unlicensed sites. We highlight that the shutdown additionally had important unintended externalities. Individuals who never visited kino.to and who additionally clicked on news articles that covered the shutdown increased their visits to piracy websites substantially. We show that this effect largely comes from articles that explicitly mention alternative websites or suggest that users do not have to fear legal consequences from unlicensed streaming. Finally, we document that the unlicensed video streaming market is much more fragmented after the shutdown, potentially affecting future interventions, at least in the short run. We argue that our results can be helpful to understand why online piracy rates are still high, despite a plethora of enforcement efforts.