Frontiers: Pirating Foes or Creative Friends? Effects of User-Generated Condensed Clips on Demand for Streaming Services

Short-form video-sharing platforms have seen phenomenal growth in recent years. One type of video that often goes viral on such platforms is the condensed clips derived from existing full-length video content. The traditional entertainment industry has strongly criticized this new form of user-generated derivative content owing to the potential for infringement on copyright owners’ exclusive rights and de facto theft of viewers from original works. However, little is known of the actual impact of condensed clips on the demand for corresponding original works. In this study, we seek to identify such impact with the help of an exogenous boycott event in April 2021 that forced Chinese TikTok to remove condensed clips more proactively. Our results indicate that their removal had reduced the demand for corresponding full-length original works on a major video streaming platform by approximately 3%. In other words, condensed clips serve as friends, rather than foes, of streaming services. Further analyses suggested that positive spillover effects resulted from the fact that condensed clips could enhance the visibility of original works, and such effects were stronger if the original work was of higher quality or had a more fascinating storyline. Our results offer rich managerial and policy insights.