Speaker: Michael Smith, Professor of Information Systems and Marketing, Carnegie Mellon University
Presentation Title: Carrots and Sticks: Empirical Evidence on Strategies for Competing with Piracy. Download the paper here.
Abstract: Understanding the relationship between copyright policy and consumer behavior is an increasingly important topic for sellers of information goods. In this talk I will provide an overview of a program of research on this topic conducted by CMU’s Initiative for Digital Media Research which has empirically studied the effectiveness of a variety of market-based and policy-based strategies for responding to digital piracy. The talk will focus on a recent study of how consumer behavior changes when Internet Service Providers are required to block access to major piracy websites. We do this in the context of two court-ordered events affecting consumers in the UK: The blocking order directed at The Pirate Bay in May 2012, and blocking orders directed at 19 major piracy sites in October and November 2013.
Our results show that blocking The Pirate Bay had little impact on consumption through legal channels — instead, consumers seemed to turn to other piracy sites, Pirate Bay “mirror” sites, or Virtual Private Networks that allowed them to circumvent the block. In contrast, blocking 19 different major piracy sites caused users of those sites to increase their usage of paid legal streaming sites such as Netflix by 12% on average. The lightest users of the blocked sites (and thus the users least affected by the blocks, other than the control group) increased their clicks on paid streaming sites by 3.5% while the heaviest users of the blocked sites increased their paid streaming clicks by 23.6%, strengthening the causal interpretation of the results.
Bio: Michael D. Smith is a Professor of Information Systems and Marketing and the Co-Director of the Initiative for Digital Entertainment Analytics (IDEA) at Carnegie Mellon University. He holds academic appointments at the School of Information Systems and Management and the Tepper School of Business. He received a Bachelors of Science in Electrical Engineering (summa cum laude) and a Masters of Science in Telecommunications Science from the University of Maryland, and a Ph.D. in Management Science from the Sloan School of Management at MIT.
Professor Smith's research uses econometric techniques to analyze firm and consumer behavior in markets for digital information and digital media products. His research in this area has been published in leading Management Science, Economics, and Marketing journals; in professional journals including The Harvard Business Review and The Sloan Management Review; and has been covered by press outlets including The Economist, The Wall Street Journal, The New York Times, Wired and Business Week.
Professor Smith has received numerous awards for his teaching and research including the National Science Foundation’s prestigious CAREER Research Award, and he was selected as one of the top 100 “emerging engineering leaders in the United States” by the National Academy of Engineering.
Visit Michael at http://www.heinz.cmu.edu/~mds/