Raiding pirate sites is counter-productive

Websites sharing movies, music and other copyrighted material illegally should not be called pirates, but Lernaean Hydras. At least that's the conclusion I've come to after reading the research paper called Online Copyright Enforcement, Consumer Behavior, and Market Structure.

For those who might not be familiar with Greek mythology, the Lernaean Hydra was a water monster with many heads, and when one head got chopped off, two new were spawned in its place.

After reading the aforementioned research paper, my conclusion is similar – when you shut down a pirate site, two new will take its place. And the other two will be tougher to handle.

The paper was created by Luis Aguiar of the European Union's Institute for Prospective Technological Studies, Jörg Claussen of the Copenhagen Business School and Christian Peukert from the University of Zürich. The three go to use Nielsen NetView data that “... monitors the online activity of a representative sample of Internet users by recording all of their URL visits together with visit duration, while guaranteeing them that the data will be kept anonymous.”

What they found out in the data is that there was a site in Germany, called Kino.to, a service similar to Megaupload. It offered unlicenced copies of movies, music and TV shows. It was the most visited site out of all they had any interest in, with 6,000 weekly visits. When the site gained too much attention it was raided by the authorities, closed down and their operators jailed. But instead of reducing the number of pirated movies shared, it basically had the opposite effect, with other sites spawning in its place.

“Put together, our data clearly shows that the shutdown massively altered the German market for unlicensed video streaming, making it less concentrated and more competitive,” the authors write. Users also started visiting more piracy sites, up to around 1.4 a week from the 1.15 when kino.to was online.

“If we were to take the costs of the intervention into account (raid, criminal prosecution, etc.), our results would suggest that the shutdown of kino.to has not had a positive effect on overall welfare.”