MegaUpload's closure boosts movie rentals and sales

A new study shows that in the months following the takedown of Kim DotCom's cyberlocker, online movie revenue increased by 6 percent to 10 percent.

MegaUpload founder Kim DotCom (at right) was arrested in New Zealand on January 19. CNET,3News.co.nz/Screenshot by Jonathan Skillings

Here's something that will make the Motion Picture Association of America happy: movie sales and rentals increased after the feds shuttered cyberlocker MegaUpload last year.

A new study by Carnegie Mellon's Initiative for Digital Entertainment Analytics shows that after MegaUpload's closure online movie revenue increased by between 6 percent and 10 percent, according to the Wall Street Journal. The study researched two major movie studios and the results were measured in 12 different countries, including the U.S.

"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," the study's researchers told the Wall Street Journal.

The U.S. government conducted a major takedown of the cloud-storage service in January 2012, charging its founder Kim DotCom with racketeering, copyright infringement, money laundering, and more. Federal authorities claim that DotCom pocketed millions of dollars in illegal profits from illegal file sharing and downloading, which has reportedly cost the film industry more than $600 million in damages.

MegaUpload was one of the most popular video destinations on the Web, with reportedly 50 million users per day that shared and streamed files.

The Carnegie Mellon study looked at digital transactions in the four months after the cyberlocker was shut down. What it found was that the weekly digital sales of movies from the two studios grew by between 10,500 and 15,300 units, according to the Wall Street Journal. Additionally, rentals also increased by between 13,700 and 24,000 units a week.

However, the study's researchers seem unclear whether users will continue to go through the legal channels. "We...do not know whether the sales increase will persist or if these new consumers will eventually find their way back to alternative piracy channels," the researchers told the Wall Street Journal.

While the study shows increased sales and rentals, other reports from around the time of DotCom's arrest said that competing cyberlockers also experienced an uptick in users . Reportedly, millions more people racked up time on sites like Filefactory, Depositfiles, Hotfile.com, and other services.

About the author

Dara Kerr is a staff writer for CNET focused on the sharing economy and tech culture. She grew up in Colorado where she developed an affinity for collecting fool's gold and spirit animals.

 

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