
Free TV-Show Streaming Hurts Online Sales, Research Finds (torrentfreak.com) 67
New research from Carnegie Mellon University shows that online piracy is not the only worry for TV distributors. Based on Downton Abbey streaming and sales data provided by PBS, as reported by TorrentFreak, the researchers find that free legal streams can significantly reduce download sales. However, that doesn't necessarily mean that free streaming options should be banned. From the report: The researchers were able to estimate the impact in a natural experiment, since PBS was required to pull the free streams for all episodes at the same time. This means that some were streamable for more than a month, while others only for a week, or two. In addition, they had sales data for several seasons, allowing them to make an alternative comparison between years, where the streaming windows varied. In both cases, they show that free streaming cannibalizes download sales. "Our analysis in our primary specification indicates that availability in the free streaming window reduces EST sales by 8.4%. Using an alternative specification we find that free availability reduces EST sales by 9.9%," they write. The negative effect is not unexpected. However, it doesn't mean that it is wrong to offer free streaming in the long run, as there are several positive side-effects. That's where the puzzle starts to get complicated.