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Does Pirated Video Crowd Out Non-Pirated Video? Yes—See How Much Here.

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Many of us are hooked on streaming video, but sometimes we will watch video however it comes to us, including pirated video streams. The online analytics firm Sandvine says more than 9.3 million American homes accessed pirated video streams in 2018. 

This is a public policy and commercial phenomenon one would think had been researched to the max. But it hasn’t been. No study has empirically measured how much viewer time is diverted from non-pirated to pirated content…until now.

The Technology Policy Institute’s team of economic researchers, Sarah Oh, Scott Wallsten, and Nathaniel Lovin, have released an empirical study of Americans’ streaming habits based on a dataset of over a trillion observations. They find that every minute spent downloading or streaming pirated video crowds out about the same amount of time that would have been spent using services like Netflix and Hulu.

Let me put this another way and underscore a key finding: TPI’s data-driven trio finds that 7.3 percent of American households may be watching pirated video that otherwise could be streamed on one of many new streaming services available today.

Released this week, the economic study entitled Do Video Streams Crowd Out Non-Pirated Video Streams? Evidence from Online Activity may refresh discussions of how to protect American creative content in the new streaming video environment. Rather than prescribing the Rx, it seeks to provide an updated view of dynamics in today’s new streaming video marketplace.

“There is a lot of experimentation, competition and disruption in the video and broader entertainment sector,” said TPI President and Senior Fellow Scott Wallsten.  “By quantifying the effects of the pirated video ‘crowd-out effect,’ we aim to provide analysts and policymakers with a deeper understanding of the marketplace.”

As more American households tune in to their streaming apps, accessing old and new content for hours a day, TPI’s team of researchers are following trends and measuring changes in the marketplace.