Research: Piracy cost $6bn-$8bn annually

Video piracy – the copying and selling copyrighted content – has been around since the advent of the VHS tape and home video recording in 1979, notes market intelligence firm ABI Research. Today, video piracy has shifted from pirated set-top boxes to content redistribution over broadband networks.

The most common forms of piracy today include illegal fully-loaded Kodi boxes, social network live streams, torrents of exclusive series or movies, web-based redistribution via file lockers, and password sharing. Service providers lose $6 billion (€5.14bn) to $8 billion annually in revenue to piracy.

“Content providers must shift their response to piracy from being device-oriented, such as traditional conditional access systems (CAS) and digital rights management (DRM) to comprehensive service-oriented approaches and modern tools against piracy,” advises Sam Rosen, Vice President at ABI Research.

The most important tools available today include session-based watermarking coupled with real-time piracy monitoring focused on locating and identifying pirated content consumption and disruption of pirated content via terminating the source or disrupting the web services. Other tools include managing password sharing, and working with other content providers in a market to effectively drive law enforcement to respond to the threat of piracy. ABI Research – in its Content Protection and Watermarking report, estimates that nearly $400 million, or about 33 per cent of revenues in the DRM market will shift to service- or as-a-service (aaS) oriented revenues, by 2022, according to ABI Research.

News and technology sites often take an ambiguous stance on piracy. For example, the New York Times reassured the public that “the government is unlikely to prosecute you” for sharing their passwords while TechRadar rated Kodi boxes similarly to how they would rate OTT boxes such as Roku and Apple TV.

Piracy is a prevalent topic in the headlines, notably with HBO’s Game of Thrones released on pirate sites before the broadcast and on-demand release. According to Rosen, “HBO suffered piracy via multiple avenues, including cybersecurity problems and supply chain leaks. One reassuring sign is that in the HBO supply chain case, as well as recent British Premier League cases, content owners quickly brought charges and the courts responded, showing better cooperation and urgency than has historically been the case.”

While protection of all pay-TV and OTT content is important, the video ecosystem today is showing significant investment in new types of content in which the dangers of piracy are greater than in the past. Investments in Exclusive content, Live Sports, early release VoD and Ultra HD Content create incentives where only specific platform providers in a market have access to the content. This may drive consumers to pirate if the content is not on their preferred platform, or is perceived as too expensive. About 32 per cent of pay-TV and OTT revenues will be associated with one of these types of high-value content by 2022.