From Bootleg to Binge: User Migration and Legal Demand Following Brazil’s MegafilmesHD Shutdown

In November 2015, the Brazilian Federal Police shut down MegafilmesHD.net, a major piracy streaming site that generated roughly 60 million monthly visits, making it the largest piracy site in Brazil at the time.

The authors assemble a balanced click-stream panel of 2,557 Brazilian Internet users and estimate a generalized difference-in-differences model to measure the impact of the shutdown on both legal and illegal media consumption.

Key Findings

• The shutdown caused treated users to substitute toward other piracy streaming sites by 20% (measured in time: +61% minutes).
• Despite this diversion, users also increased their Netflix visits by 6% (+11% minutes).

Because the dataset contains self-reported demographics, the study reveals who changes behavior after enforcement:

• Men, urban residents, and professional-class users diverted most heavily toward alternative piracy sites.
• Income-constrained users (students and the unemployed) were least likely to adopt paid streaming following the shutdown.

Conclusion

Even a single-site shutdown can meaningfully increase legal streaming uptake in an emerging market. However, legal conversion is concentrated among higher-income users. The findings suggest that:

• Price discrimination or
• Ad-supported versions of legal services

may complement enforcement by attracting more price-sensitive consumers.