One of the largest illegal movie streaming websites in Europe was shut down in 2011 following a massive police raid across France, Germany and Spain. At the time, Kino.to’s closure was viewed as a huge victory for those in support of the anti-piracy movement.
In retrospect, however, the impact of the site’s passing was short-lived and predictably so, led to increased competition among other similar services via the Hydra effect.
A new report from the European Commission Joint Research Centre titled Online Copyright Enforcement, Consumer Behavior, and Market Structure examined the clickstream data of 5,000 German Internet users and found that piracy levels dropped by 30 percent in the four weeks following its shutdown.
Only 2.5 percent of those users, however, sought out legal alternatives. What’s more, the site’s closure directly led to the creation of several smaller pirate sites to fill the void.
The report concluded that when taken at face value, the results indicate the shutdown more or less converted consumer surplus into deadweight loss. When the cost of the raids is factored into the equation, results suggest there was no overall positive effect and the emergence of several new sites will only make future raids more costly.
The findings are in line with what we’ve been hearing on the matter over the years. There will always be people that pirate media of all types but as services like Netflix, Steam, Spotify and Hulu have demonstrated, many will gladly pay for content that’s affordable and convenient to access.