Screen-shot-2012-01-21-at-12.23.15-PM-1According to a study released yesterday by researchers at Carnegie Mellon University, last year’s shutdown of the notorious pirate file-sharing hub Megaupload, had a positive impact on movie revenues.  Citing the increase in sales following the popular cyberlocker’s demise,  the researchers (Brett Danaher and Michael Smith) note:

…immediately following the shutdown, there was a positive and statistically significant relationship between a country’s sales growth and it’s pre-shutdown Megaupload penetration, such that for each additional 1% (lost) penetration of Megaupload the post-shutdown sales increase was between 2.5% and 3.8% higher (depending on which of our models you believe to be most accurate).

The fact that these trends didn’t exist before the shutdown but existed after the shutdown suggests a causal effect of the shutdown on digital sales, and we find a similar (but slightly weaker) relationship for digital rentals. In aggregate, our estimates suggest that, across the 12 countries in our study, revenues from digital sales and rentals for the two studios were 6-10% higher than they would have been if Megaupload hadn’t been shutdown.

Given the size of Megaupload’s illicit traffic (ranked #63 worldwide in 2011), these results are not particularly surprising.  However, in terms of its overall impact on piracy, it’s important to note that the seizure of Megaupload had a ripple effect across the entire cyberlocker landscape.  Shortly after Dotcom’s arrest, other major players in the piracy’s profit pyramid, also bit the dust.  These included Filesonic, and Wupload.  Others, such as Fileserve, shifted their business models away from a rewards system that paid cash for downloads.  Clearly the site operators, who grew wealthy through a cyberlocker business model that had thrived for so long in a lawless environment, were suddenly running scared.  Their black market had been discovered and many jumped ship rather than face potential jail time.

Now, more than a year later, a cornucopia of new cyberlocker sites has emerged to take their place.  So far, these sites–many based in Eastern Europe far from the reaches of U.S. authorities–have failed to achieve the size and scope of the defunct giants.

Another significant factor working in favor of content creators is that Megaupload’s takedown created a brief vacuum that gave legitimate streaming portals a respite, providing them with a much-needed opportunity to elbow their way into the global marketplace and establish a loyal costumer base.

After all, it’s always much easier to set up a successful shop if you don’t have another store down the block giving away the same products for free.