Movie piracy and displaced sales in Europe: Evidence from six countries

This paper presents estimates of lost movie sales due to unpaid movie consumption. We are the first to provide estimates that are representative of the internet-using population and cover multiple countries. Based on an online questionnaire with almost 30,000 respondents, we document that one unpaid (first) viewing of a movie displaces about 0.37 units of paid viewings. Using a back-of-the-envelope calculation, we show that this implies that unpaid movie viewings reduced movie sales in Europe by about 4.4% during the sample period. Lost sales differ substantially by country: they are in the range of 1.65% for Germany and 10.4% for Spain. We also document that 94% of lost sales are due to unpaid viewings by a small group of only 20% of consumers. This implies that well targeted policies have the most potential to prevent damages of movie piracy.