Combating Pre-Release Piracy : Modeling the Effects of Anti-Piracy Measures in P2P Networks

The short period right after the release of a song is typically associated with extensive publicity and the highest sales. However, these songs are found immediately after their release, and sometimes well before the release date, on P2P networks. Not surprisingly, the industry considers this so called ‘pre-release' piracy to be extremely damaging to the potential sales of a song. In this paper, we analyze the effect of anti-piracy measures on the propagation of unauthorized content in P2P networks. For this purpose, we develop a model that describes the dynamics of demand and supply of piracy from the early stages. Using a unique data set, we quantify the impact of anti-piracy measures, specifically, we analyze two anti-piracy measures: the reduction of file supply and the reduction of file demand. We find that the impact of a supply reduction on demand is similar to the impact of a demand reduction on supply. From a policy point of view, our results suggest that taking anti-piracy measures early on is important. In addition, and potentially more controversial, our results provide support to the notion that in order to reduce piracy, punishing end-users is as important as controlling the supply of unauthorized music files