Study puts some numbers to the effect of content piracy on IP rights holders

It is not far-fetched to reason that copyright holders are damaged by free file-sharing sites, and now an academic study has been released that adds empirical support to the hypothesis.

The Wall Street Journal reports that “online revenue was between 6% and 10% higher than it would have otherwise been” but for the closing of two major content-pirates, citing a study compiled by Brett Danaher, Wellesley College assistant professor of economics and Carnegie Mellon University professor of information technology and marketing Michael D. Smith.

"We conclude that shutting down Megaupload and Megavideo caused some customers to shift from cyberlocker-based piracy to purchasing or renting through legal digital channels," stated the researchers, in effect answering critics of the entertainment industry who had suggested government take a “no harm, no foul” approach to content piracy.