Combating Prerelease Piracy: Modeling the Effects of Antipiracy 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 often found well before the official release date on peer‐to‐peer (P2P) networks. Not surprisingly, the industry considers this so‐called ‘prerelease’ piracy to be extremely damaging to the potential sales of a song. In this paper, we analyze the effect of antipiracy 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 antipiracy measures; specifically, we analyze two antipiracy measures: the reduction of file supply and the reduction of file demand. We find that the impact of a demand reduction on demand is greater than the impact of a supply reduction on supply. From a policy point of view, our results suggest that taking antipiracy measures early on is important. In addition, and potentially more controversial, our results provide support for the notion that to reduce piracy, punishing end users is as effective as controlling the supply of unauthorized music files.