This document summarizes a field experiment on the impact of internet piracy on book sales in Poland. Researchers obtained sales data for 249 book titles from 11 Polish publishers over one year. The books were split into matched pairs and one book from each pair was randomly selected to have unauthorized online copies removed. No significant differences were found in sales between the books that were protected from piracy and those that were not, suggesting that internet piracy does not currently pose a threat to the Polish book industry based on this experimental methodology. However, the situation may evolve over time as piracy and digital markets continue changing.

1. Internet piracy and book sales.
A field experiment.
Wojciech Hardy Michał Krawczyk Joanna Tyrowicz
Group for Research in APplied Economics

2. Summary of the results
Book industry representatives’ concern about
internet piracy might be exaggerated.
(At least) for now.
• sssssssss
2

3. • Many studies for film and music industries.
• Piracy usually found to hurt sales, but
not always, depending on:
– The methodology.
– The analyzed good.
– The analyzed period.
• A few studies on book industry. But:
– Small-scale (almost case studies).
– Specific genres of books.
– Not really on piracy.
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Design RecruitmentLiterature Matching Treatment
Main problems:
Seasonal effects
Causality
Omitted variable
Perfect tool?
Experiments!

4. * Reimers (2014, Oct 16)
– 600+ titles from one publisher
– Mostly fiction, from obscure to
Vonnegut
– Received protection from piracy
at different points in time
(publisher's decision)
– She compares impact of protection using DiD
– Finds 10-20% boost for e-books, no sig. effect for
other formats
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Design RecruitmentBook DataLiterature Matching Treatment
Main problem:
Causality/endogeneity
The solution?
Experiments!

5. In general
• The sample should be:
– Large (for statistical inference).
– Varied (for representativeness).
– Long (to control for seasonal effects).
• The experimental methodology would deal with:
– Reverse causality (a reference group).
– Omitted variables (randomized treatment application).
In detail
• Acquire book data.
• Match them in groups (two or more books as similar as possible!).
• Protect one randomly chosen book in each pair.
• Do it for a year.
• Compare the two outcomes.
5
Design RecruitmentLiterature Matching Treatment
Contribution?
New industry
New methodology
New conclusions

6. • Around 70 Polish publishers contacted.
• 11 accepted.
• 9 went through with providing all of the data
• Data on 249 titles for a year
• Different genres: legal, business, linguistic, fiction, fantasy, etc.
• Both medium and larger publishers,
• Both popular and niche titles
6
Design RecruitmentLiterature Matching Treatment

7. We split them into matched pairs (groups)
The variables they are matched on:
– Publication date & edition
– Page count
– Versions available (type of cover, digital)
– Sales forecasts (monthly)
– Number of unauthorized copies found prior to the experiment
Matching results:
– Groups of two: 94
– Groups of three: 13
– Groups of five: 1
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Design RecruitmentLiterature Matching Treatment

8. Within each group we have randomly picked
protected and control titles.
Thus both groups were comparable.
We did nothing to the Control Treatment
(CT) group.
Agency Plagiat.pl removed unauthorized
copies from the Enforcement Treatment
(ET) group.
We observed both groups between 11.2012
and 9.2013.
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Design RecruitmentLiterature Matching Treatment
A note on file-sharing in
Poland.
Alexa ranking of
„most popular websites”:
Chomikuj.pl – 17th
Pirate Bay – 66th

9. 1) Data from Plagiat.pl
2) Counterfactual excercise: searched for 20 titles each (RA’s).
– Found fewer protected books.
– If found – searched longer.
– If found – mostly non-standard sources.
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Manipulation check

10. • We received sales data.
• Some distribution.
• They could be negative (what we did)
• Smth by genre?
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Sales data

11. No difference in sales, or variance
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Tests

12. 12
Tests

13. • Let’s recheck our strategy and add controls.
• No results!
13
Regressions – to check for heterogeneity

14. • Popularity? (see this and that)
• No results!
14
Regressions: to check for distributional effects

15. • Good thing about piracy that you don’t need a result
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Conclusions
We have performed a large field experiment on piracy’s impact on
book sales.
We applied a robust methodology and checked for more complex
relationships.
Internet piracy does not seem to pose a threat to the book industry.
Of course, the situation is likely to evolve quickly.

16. Thank you for your attention!
Author: Michał Krawczyk
e-mail: mkrawczyk@uw.edu.pl
More about our research on
http://grape.uw.edu.pl/ipiracy
Twitter: @GrapeUW