The redistributive effect of online piracy on the box office performance of American movies in foreign markets

Using the French anti-piracy law known as Hadopi, we study the effects of online piracy on movie sales in theaters. Applying four estimation strategies at different levels of observations (country, town, consumer, and movie), we find that the introduction of the law is associated with a 9% increase in the market share of American movies but no expansion of the total market. We exclude supply side reactions by distributors as an explanation for this displacement effect that benefits American movies. The increase in the box office performance of American movies is primarily explained by the behavior of younger consumers.