About | HeinOnline Law Journal Library | HeinOnline Law Journal Library | HeinOnline

LOG IN
LOG IN


22 Rev. Econ. Rsch. on Copyright Issues 1 (2025)

handle is hein.journals/rvwoecrh22 and id is 1 raw text is: Review of Economic Research on Copyright Issues, 2025, vol. 22, pp. 1-32 FROM BOOTLEG TO BINGE: USER MIGRATION AND LEGAL DEMAND FOLLOWING BRAZIL'S MEGAFILMESHD SHUTDOWN BRETT DANAHER, JONATHAN HERSH AND MICHAEL D. SMITH ABSTRACT. In November 2015 the Brazilian Federal Police shut down MegafilmesHD.net, a piracy streaming site that accounted for roughly 60 million monthly visits - more traffic than any other piracy site in the country. We assemble a balanced click stream panel of 2,557 Brazilian Internet users and estimate a generalized difference in differences model to determine the effect of this shock on legal and illegal consumption. The event caused treated users to substitute to streaming piracy sites by 20% (minutes +61%) and, despite this diversion, raised their Netflix visits by 6% (minutes +11%). Because the panel includes self reported demographics, we shed light on who pivots after enforcement. Men, urban residents, and professional class users divert more heavily to alternative piracy sites, whereas income - constrained segments (students and the unemployed) are least likely to adopt paid streaming in response to the shutdown. Taken to- gether, the evidence shows that even a single site shutdown can generate measurable legal uptake in an emerging market, but legal conversion is concentrated among higher income users. Price discrimination or ad supported versions of legal services may therefore complement enforcement by attracting the more price sensitive pirates. 1. INTRODUCTION Digital piracy and its effect on legal marketplaces have been central topics in economics and information systems research for two decades. A growing empirical literature now measures how different anti-piracy policies - site blocking, graduated response, notice- and-takedown - shift consumption between illegal and legal channels (e.g., Adermon and Liang 2014; Aguiar et. al. 2018; Danaher et. al. 2020). Yet we know far less about who changes behavior when a piracy supply shock occurs. Prior work profiles pirates demographically, but has not answered the more policy-relevant question: which users respond to enforcement by substituting into legal markets versus evading the policy? Pinpointing these margins of adjustment could help rights-holders and regulators target interventions more efficiently. We address this gap by analyzing the November 2015 shutdown of MegafilmesHD.net - then Brazil's most visited piracy streaming/link site. While the event predates today's 1