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Megaupload shutdown did nothing to slow piracy, study finds

The recent federal takedown of notorious file-sharing service Megaupload was initially seen as a huge victory for owners of copyrighted music and movies, but new research shows this may not be the case. Federal prosecutors successfully shuttered the service last month and arrested seven men associated with Megaupload including site founder Kim Dotcom, who is said to have earned $42 million from the site in 2010 alone. What was initially thought to be a victory for movie studios and record labels is turning out to be an empty win, however, as Megaupload’s closure has had almost no impact on file-sharing. Read on for more.

Internet consulting firm DeepField Networks analyzed Web traffic from six companies that provide the storage facilities responsible for roughly 80% of all file-sharing traffic. According to the firm, Megaupload’s files accounted for a huge portion of that traffic before a series of raids took the service offline last month; between 30% and 40% of all file-sharing downloads came from Megaupload.

The service moved so much data that global Internet traffic immediately decreased by between 2% and 3% when Megaupload’s services were taken offline on January 18th.

As big as Megaupload was, however, the service’s closure has not had the effect on file-sharing that copyright owners might have hoped. According to DeepField, Web traffic related to file-sharing recovered almost immediately as users simply utilized other services such as Rapidshare and Mediafire.

To compound matters, it looks like Internet Service Providers in the United States will likely take the biggest hit following Megaupload’s closure. ”Instead of terabytes of North America Megaupload traffic going to U.S. servers, most file sharing traffic now comes from Europe over far more expensive transatlantic links,” DeepField noted.