Internet Governance Through Site Shutdowns: The Impact of Shutting Down Two Major Commercial Sex Advertising Sites

In the two weeks after the U.S. Congress passed a package of anti-sex trafficking bills on March 21, 2018, two of the largest online commercial sex advertising platforms ceased operation. On March 23, Craigslist voluntarily removed their personals section, which had been dominated by advertisements for commercial sex. And on April 6, the Department of Justice seized Backpage.com, the largest online platform for commercial sex advertisements. Our research examines the impact of these shutdowns on a variety of important outcome variables, notably prostitution arrests and violence against women— variables that the prior literature has shown were impacted by the introduction of commercial sex advertising platforms.We employ a generalized difference-in-differences model by exploiting cross-city variation in the preshutdown usage of the two shuttered sites. We find no causal effect of the shutdowns on any of the outcome variables we measure. Further analysis suggests that these null results are likely due to the fluidity of online markets. Our data show that the majority of advertisers and users of Backpage and Craigslist’s personals quickly moved to other (often off-shore) commercial sex advertising portals. Our results highlight the challenges that governments face in reducing online sex trafficking, as the market for commercial sex advertising appears agile enough to quickly disperse to offshore sites after a few popular domestic sites are shut down. Our results have general implications for the governance of other illegal activities online

Essays on the economics of digital media and Internet piracy

The rise of Internet media piracy is often cited as the primary source of falling profits in the media industries, as markets for music, movies, and television have diminished since the turn of the millennium. This had led to niche of studies in economics and business-related fields aimed at quantifying losses to the industries and providing potential solutions. In this dissertation I present three empirical papers that use quasi-experimental evidence to answer some of the most heavily debated questions in the media industries. In Chapter 1 I ask whether film box office returns are displaced by online movie piracy, and I find evidence that at least billions of dollars are lost each year in the international box office due to piracy. In Chapter 2 I ask whether digital distribution of media—e.g. selling television episodes by digital download on iTunes—can mitigate piracy without cannibalizing physical sales. I find that when a television network removes its content from the iTunes store, it causes a significant jump in piracy of that content but no increase in physical sales through the Amazon.com, the largest online retailer of tv box sets. I also find evidence of a fixed cost to piracy, suggesting that consumers who turn to piracy be unlikely to return to purchasing legally. Finally, in Chapter 3 I turn to the music industry, asking whether the own price elasticity of legal digital music is affected by desirability of online piracy as a substitute good. I find that songs that people tend to pirate exhibit more elastic demand curves in the legal digital market, and that piracy levels for a song increase when that song is raised in price on the iTunes music store. This suggests that firms are constrained in pricing media due to piracy and that firms should use observable piracy data to differentiate pricing across products

Essays on the economics of digital media and Internet piracy

The rise of Internet media piracy is often cited as the primary source of falling profits in the media industries, as markets for music, movies, and television have diminished since the turn of the millennium. This had led to niche of studies in economics and business-related fields aimed at quantifying losses to the industries and providing potential solutions. In this dissertation I present three empirical papers that use quasi-experimental evidence to answer some of the most heavily debated questions in the media industries. In Chapter 1 I ask whether film box office returns are displaced by online movie piracy, and I find evidence that at least billions of dollars are lost each year in the international box office due to piracy. In Chapter 2 I ask whether digital distribution of media—e.g. selling television episodes by digital download on iTunes—can mitigate piracy without cannibalizing physical sales. I find that when a television network removes its content from the iTunes store, it causes a significant jump in piracy of that content but no increase in physical sales through the Amazon.com, the largest online retailer of tv box sets. I also find evidence of a fixed cost to piracy, suggesting that consumers who turn to piracy be unlikely to return to purchasing legally. Finally, in Chapter 3 I turn to the music industry, asking whether the own price elasticity of legal digital music is affected by desirability of online piracy as a substitute good. I find that songs that people tend to pirate exhibit more elastic demand curves in the legal digital market, and that piracy levels for a song increase when that song is raised in price on the iTunes music store. This suggests that firms are constrained in pricing media due to piracy and that firms should use observable piracy data to differentiate pricing across products

Copyright in the Music Industry

In celebration of Canadian Music Week, the IP Osgoode Speaker Series presented a panel discussion on “Copyright and the Music Industry” featuring journalist/author Robert Levine and Brett Danaher, Assistant Professor of Economics at Wellesley College. Levine spoke about the current state of copyright and the public discourse surrounding it. He argued the need for more effective enforcement mechanisms for rights holders. Danaher explored one such enforcement mechanism as he presented statistics drawn from his research on the effect of France’s Hadopi anti-piracy laws on iTunes sales

Copyright in the Music Industry

In celebration of Canadian Music Week, the IP Osgoode Speaker Series presented a panel discussion on “Copyright and the Music Industry” featuring journalist/author Robert Levine and Brett Danaher, Assistant Professor of Economics at Wellesley College. Levine spoke about the current state of copyright and the public discourse surrounding it. He argued the need for more effective enforcement mechanisms for rights holders. Danaher explored one such enforcement mechanism as he presented statistics drawn from his research on the effect of France’s Hadopi anti-piracy laws on iTunes sales

The Impact of Early International Digital Release of Films on U.S. Box Office Revenues

For film studios, the development of new digital distribution channels has created new opportunities and challenges, which are in particularly stark contrast in the Chinese market. In recent years, Hollywood studios have responded to China’s film import quota and widespread piracy by releasing some films on Chinese digital streaming platforms, in many cases while the film is still showing in the U.S. box office. Though the selection of such films was not random, we identified and controlled for several confounding factors that may lead to selection bias, and then used a difference-in-differences strategy to identify the causal effect of early Chinese digital release on the sales revenues in the U.S. box office. Our results show that the early release on Chinese digital streaming platforms does in fact lead to early appearance of piracy. However, this piracy does not seem to cannibalize U.S. box office revenues

Copyright Enforcement in the Digital Age: Empirical Evidence and Policy Implications

With the harm from piracy well established in the literature, our goal here is to synthesize the findings in the more recent literature that analyzes the effectiveness of various approaches for reducing the economic harm from piracy

The Effect of Piracy Website Blocking on Consumer Behavior

In this study, we ask what drives the success or failure of various supply-side anti-piracy enforcement actions such as piracy website blocking. We do this in the context of three court-ordered events affecting consumers in the United Kingdom: We first study Internet Service Providers’ blocking of 53 video piracy sites in 2014 and of 19 piracy sites in 2013, and we then study the blocking of a single dominant site, “The Pirate Bay,” in 2012. We show that blocking 53 sites in 2014 caused treated users to decrease piracy and to increase their usage of legal subscription sites between 7% and 12%. It also caused an increase in new paid subscriptions. We find similar results for the blocking of 19 piracy sites in 2013. However, blocking a single site in 2012 caused no increase in usage of legal sites but instead caused users to increase visits to other unblocked piracy sites and VPN sites. We find evidence that increased search and learning costs associated with piracy drive the effectiveness of blocking multiple sites rather than just one primary site. This suggests that to increase legal IP use when faced with a dominant piracy channel, the optimal policy response must block multiple channels of access to pirated content, a distinction that the current literature has not made clear