Netflix's Ad-Supported Tier and Online Piracy in the European Union: A Synthetic Control Analysis

Sammanfattning

Digital piracy persists in the European Union despite the growth of legal subscription video-on-demand alternatives. This thesis investigates whether Netflix's lower-priced advertising-supported subscription tier, launched in November 2022 in France, Germany, Italy, and Spain, was followed by a reduction in online piracy. Using monthly piracy accesses per internet user from the EUIPO (2024) panel covering 2017-2023, the analysis applies the synthetic control method to each treated country separately and supplements the country-by-country estimates with a pooled estimate from the generalized synthetic control method with interactive fixed effects. The estimates are negative in all four treated countries, and the pooled average treatment effect of -1.278 piracy accesses per internet user per month has a 95 percent confidence interval that excludes zero. A leave-one-out donor pool check finds that France's estimate is robust to the exclusion of either dominant donor, while Germany's is not. The magnitude of any reduction cannot be precisely identified, in part because of concurrent enforcement activity and donor-pool contamination. The contribution is therefore narrow: a documented negative association across four countries with identified threats to its causal interpretation.