1. Gone in 60 Seconds: The Impact of the Megaupload Shutdown on Movie Sales
by Brett Danaher (Wellesley College – Department of Economics) and Michael Smith (Carnegie Mellon University – H. John Heinz III School of Public Policy and Management)
Brett Danaher, Michael Smith
With a large body of the academic literature finding that illegal filesharing poses a threat to media sales, a natural follow-on question is: how should media companies respond to this threat? In our prior research we found that making it easier to consume through legitimate digital distribution channels can reduce the demand for pirated content. In this research we analyze whether the reverse is also true: Does making it harder for consumers to access digital piracy increase demand through legitimate channels. This question has significant managerial and policy implications as businesses and governments struggle with how to respond to the financial threat piracy poses to the creative industries.
We analyze this question in the setting of Megaupload.com, a site that was one of the most popular piracy-enabling sites online, became the target of a U.S. indictment because of its piracy activities, and ultimately was shutdown over the course of several days in Janary 2012. We use this event to ask whether government interventions aimed at making piracy less attractive by raising the implicit cost of piracy can also be effective at migrating consumers from illegal to legal channels. Our research finds that the answer to this question is “yes” — in our data the shutdown of Megaupload seems to have caused a 6-10% increase in worldwide digital movie sales for the two major studios in our dataset.
Moving forward, while our study establishes that shutting down a major piracy site can cause some consumers to migrate from illegal to legal channels, in the future we are interesting in studying whether related interventions, such as the voluntary Copyright Alert System adopted by Internet Service Providers in the U.S., are similarly effective and what attributes of these anti-piracy programs (e.g., education, threats of prosecution, reducing the convenience of piracy, voluntary or government-mandated) are most important in driving any observed changes.
This piece was intended as satire, and satire loses its point when one tries to say something serious about it. I’m therefore tempted to let the piece speak for itself. I’m nonetheless going to say something about my motivations in writing it, in part because of some of the criticism the piece has received.
The title of the piece is “A Thought Experiment,” and I meant it to be taken in just that way. The piece is designed to elicit thought along the following four dimensions:
1. How would Justice Scalia have voted in Brown, and what should we think of Justice Scalia, given how he would have or might have voted in Brown? Scalia himself has claimed that he would have voted with the rest of the Court, and has offered some reasons why. Given his other jurisprudential commitments, I think that there is at least doubt on that score. In any event, this is only one point of the piece.
2. From the vantage point of 2013, the “neutral” reasons that the hypothetical Justice Scalia advances for his opposition to desegregation seem like thinly-disguised bigotry. Will modern opposition to constitutional gay and gender rights look like thinly-disguised bigotry in 2052?
3. Some of the criticisms that “Justice Scalia” advances in his hypothetical Brown opinion are not frivolous. If one nonetheless supports Brown, what does that say about the criteria that Justice Scalia and many others use to evaluate Supreme Court opinions?
4. Finally, Justice Scalia is famous for his sarcastic and mocking style, which I hope my satire captures. Like all of us, Justice Scalia cannot be sure that he is on the right side of history, and mockery and sarcasm look pretty bad years later if one turns out to be on the wrong side. Does this suggest that he ought to exhibit a bit more restraint and empathy for his jurisprudential adversaries?
I have written several articles on various aspects of the government “transparency” ideal — critiquing its theoretical basis, noting the difficulty of imposing it on the contemporary administrative state, documenting the various political and social movements that have attempted to advance transparency reform, and offering case studies of a government entity and a private one devoted to disclosing secret state information. To put it bluntly and as simply as possible, my overall thesis has been that transparency is an ideal that is impossible to accomplish, based on certain muddy and untested assumptions, and likely not to be particular popular or workable if imposed in its strong, ideal form.
This paper seeks to apply these insights to transparency’s opposite, government secrecy. Using a series of case studies, I note the parallels between transparency’s impossibility and secrecy’s improbability and implausibility by explaining that both ideas wrongly assume that the government can control information. The paper initially grew out of my interest in Vice President Cheney’s devotion to and well-developed justification for secrecy, and the fact that his success in controlling information was at best temporary, and sometimes more theatrical and political than actual. This led me to begin noticing that many of the things that are deemed secretive, from covert operations to redacted documents, in fact leak out. To be clear, I don’t consider secrecy impossible, nor do I consider it to be a defensible administrative strategy in a democratic state except in certain tightly defined contexts. Rather, my purpose is in the first instance descriptive and functional: secrecy often doesn’t work, and we should reform the state in a way that secrecy is at once much more difficult to accomplish and more effective (though temporary) when it is needed.
5. Ham Sandwich Nation: Due Process When Everything is a Crime
by Glenn Reynolds (University of Tennessee College of Law)