Contact Information:

H. John Heinz III School of Public Policy and Management
and
Tepper School of Business
Carnegie Mellon University
4800 Forbes Avenue, HBH 3028
Pittsburgh PA, 15213
Email:
Voice: 412-268-5978
Fax: 412-268-5338
Office: Hamburg Hall 3028
Assistant: Gretchen Hunter (Hamburg Hall 3007,
412-268-6076)


New:

  • April-14: I am participating in a panel sponsored by Congressmen Bob Goodlatte and Adam Schiff on “Education, Enforcement, and the Economics of Piracy and Counterfeiting.”

  • April-14: My paper with Anuj Kumar and Rahul Telang titled “Information Discovery and the Long Tail of Motion Picture Content” was accepted at MIS Quarterly. The paper empirically shows that information discovery in pay cable broadcast windows allows consumers to discovery movies they didn’t discover in the theatrical window and shifts consumption toward “long tail” titles and away from blockbusters.

  • March-14: Our Megaupload paper appeared in the March issue of the International Journal of Industrial Organization. The paper shows that shutting down Megaupload caused an increase in digital movie sales of between 6.5-8.5% over the 18 weeks following the shutdown in the 12 countries in our dataset. Our placebo tests also show that the effect of the shutdown was not characteristic of the January timeframe, supporting a causal interpretation of our results.

  • February-14: Rahul Telang and I were awarded a Google Faculty Research Award for a project titled “Promoting Movies in Digital Channels: Impact of Targeted Movie Promotion on Sales and Piracy in Digital Movie Markets.”

  • January-14: My paper with Brett Danaher, Yan Huang, and Rahul Telang titled An Empirical Analysis of Digital Music Bundling Strategies was accepted for publication in Management Science’s special issue on Business Analytics. The paper analyzes a unique natural experiment that allows us to understand both the price sensitivity of music sold online and the interaction between single and album pricing strategies. We find that record labels benefit from tiered pricing and that unbundling strategies (where singles are sold alongside albums) outperform album only strategies.

  • November-13: I became affiliated with the Technology Policy Institute as an Adjunct Senior Fellow.

  • November-13: I presented the Megaupload shutdown paper at MIT’s Center for Digital Business “Initiative on the Digital Economy” seminar series. CDB blogged about the presentation here.

  • October-13: Liye Ma, Alan Montgomery, Param Vir Singh, and I have updated our paper analyzing the impact of piracy on box office revenue. The paper adapts the well-established MOVIEMOD model to estimate the impact of piracy on sales, using data from VCDquality.com that documents the first date pirated copies of movies are available online. We find that pre-release movie piracy reduces box office revenue by 20% relative to piracy that is delayed until after release.

  • September-13: Our Megaupload research results were cited by Rep. Mel Watt in remarks to the House Judiciary Committee meeting “The Role of Voluntary Agreements in the U.S. Intellectual Property System.”

  • August-13: Brett Danaher, Samita Dhanasobhon, Rahul Telang and I have a new paper discussing empirical strategies for analyzing the impact of digitization on media markets. This paper also illustrates one methodology in the context of ABC’s use of the Hulu for streaming its content. We show that ABC’s decision to stream its content on Hulu caused a decrease in the demand for ABC piracy relative to NBC, CBS, and FOX content, and may have had a spillover effect that reduced the demand for piracy from those networks.

  • July-13: Brett Danaher presented our Megaupload shutdown paper at the Searle Center’s 3rd Annual Research Roundtable on the Law and Economics of Digital Markets at Northwestern University.

  • July-13: Pedro Ferreira presented the results of our paper with Miguel Godinho de Matos and Rahul Telang titled “The Impact of Popularity on Sales of Movies in Video-on-Demand: a Randomized Experiment” at The National Bureau of Economic Research Economics of Digitization Workshop in Stanford, California. This paper analyzes how “likes” affect movie sales by conducting an experiment with a major cable company’s Video-On-Demand service to manipulate the number of likes shown to consumers. We find that search costs, rank and number of likes are significant determinants of sales. For search costs, our experiments show that movies sell 3 times more on average when they are shown on the first screen of the VOD system than when the same movie is shown in lower screens.

  • June-13: I gave a presentation of IDEA anti-piracy research results at the 4th Anti-Piracy and Content Protection Summit, Los Angeles, CA.

  • June-13: Brett Danaher, Rahul Telang, and I have a new paper that reviews the literature on the impact of piracy on sales and discusses policy and industry approaches that could be taken to address the negative impacts of piracy. This paper will be included in the NBER’s upcoming “Innovation Policy and The Economy” book edited by Josh Lerner and Scott Stern. This paper was also included in National Bureau of Economic Research working paper series.

  • May-13: My papers on the Megaupload shutdown and on the impact of likes on sales of VOD movies will both be presented at the 2013 NBER Summer Institute, Economics of IT and Digitization Workshop in July.

  • May-13: Jeffrey Hu and I revised our paper analyzing how ebook distribution impacts print book sales. Our paper shows that across all ebooks, delaying the release of ebooks relative to print release dates results in a very small (and statistically insignificant) increase in print sales, but a large decrease in ebook sales, overall sales, and overall profit. However, we also show that consumers are more likely to switch from digital to physical channels when books with high brand awareness in unavailable digitally, and they are less likely to shift when books with strong digital characteristics (e.g., heavy print books or books with many pages) are unavailable digitally.

  • May-13: My paper with Chris Kemerer and Charles Liu appeared in the May 2013 issue of the Communications of the ACM. The paper summarizes our findings on how digital converters reduce network effects in standards markets, allowing for “winners-take-some” outcomes in what would otherwise be “winner-take-all” markets.

  • April-13: I presented our anti-piracy research results at an NBER event at the National Press Club.

  • April-13: Rahul Telang and I presented our anti-piracy research to President Obama’s Intellectual Property Enforcement Coordinator and her staff.

  • April-13: My paper with Miguel Godinho de Matos, Pedro Ferreira, and Rahul Telang titled “The Impact of Likes on the Sales of Movies in Video-on-Demand: a Randomized Experiment” was accepted at the Ninth Symposium on Statistical Challenges in Electronic Commerce Research (SCECR) in Lisbon, Portugal.

  • April-13: Our digital piracy research with Brett Danaher and Rahul Telang was covered on page A2 of the Wall Street Journal, and in a follow-up WSJ blog post.

  • March-13: I presented our Megaupload Research at a research seminar at The University of Pennsylvania’s Wharton School.

  • March-13: I presented a talk entitled “Competing With Free: How Digitization, Piracy, and Big Data Are Disrupting the Movie Industry” at a Computer Science Department Colloquium, at Calvin College.

  • March-13: Ben Fritz at The Wall Street Journal wrote an article about our research into the shutdown of Megaupload. Our original paper is here, and Brett and I put together a follow-up blog post that talks more in detail about what we find and why we think the results make sense from the perspective of competition and consumer behavior. The paper was the most downloaded paper on ssrn.com for the week of March 22, and was covered on SSRN’s blog (http://ssrnblog.com).

  • February-13: My paper with Brett Danaher on the impact of Megaupload on digital movie sales was accepted at the 11th Annual International Industrial Organization Conference. The paper uses digital sales data from two major studios and analyzes whether countries with higher usage of Megaupload before it was shutdown had a larger increase in digital movie sales after it was shutdown than other countries did. We find that this was the case: “for each additional 1% pre-shutdown Megaupload penetration, the post-shutdown sales unit change was 2.5% to 3.8% higher,” and that in the aggregate shutting Megaupload caused digital movie sales to be 6-10% higher than they otherwise would have been.

  • February-13: My paper with Brett Danaher, Rahul Telang, and Siwen Chen on the impact of France’s HADOPI “3 strikes” anti-piracy law was accepted for publication in the Journal of Industrial Economics. The research finds that HADOPI caused a 22.5% increase in song sales and a 25% increase in album sales relative to sales in a control group of countries. We also find that the impact of HADOPI occurred primarily during the time period when the law was being discussed in the French press (and searched for by French citizens on the Internet), a period before the law was enacted and well before any notices were sent to individuals caught violating the law. Finally, we show that our results are robust to controlling for penetration of iOS devices.