There's Hope To Combat Piracy If Hollywood, Industry, and Government Unite

Several studies have shown that piracy hurts the revenues of content owners, and instead pirate sites are reaping hundreds of millions of dollars in online advertising. Yet theft of movies and TV content seems to be as rampant today as ever. The Motion Picture Association of America (MPAA) reports that in 2014, just in the U.S. alone, 710 million movies and TV shows were shared via BitTorrent sites. Extrapolating to a global scale (the U.S. is less than 5% of the world’s population) and adding streaming and other piracy methods, losses were likely in the billions of dollars. The staggering order of magnitude may lead some to wonder if it’s even worth fighting the battle, or if it has been lost already. Can the battle against piracy be won? If so, how?

To answer this question I engaged in research, interviews, and debates with technology, piracy, and industry experts, and this the first of several posts on this topic. Let me start with the main conclusion: Isolated efforts by individual stakeholders to eliminate piracy are a losing proposition. Dean Marks, Executive VP and Deputy General Counsel of Global Content Protection at the MPAA, has been involved in the enforcement of copyrights for decades. He adds: “There is no silver bullet against piracy. And anti-piracy technological innovations can only get you so far, because ultimately, if you can see it, you can copy it.” Instead, content owners must coordinate with Internet intermediaries, regulators, and law enforcement to develop a multi-pronged approach to corral and contain piracy.

Motion picture and TV studios are engaged in some initiatives to prevent and mitigate piracy, which include increasing the supply of legal content online, decreasing the supply of pirated content through enforcement of copyrights, curbing the support network for pirate sites, and decreasing the demand for pirate content through education.

All of us in the Internet ecosystem share a responsibility to take meaningful steps to curb copyright infringement online,” Marks said. “Creators, search engines, ad networks, payment processors, ISPs – we all must play a role in finding solutions that mean less infringement and more high-quality, legitimate choices for audiences.”

To underscore the benefits of industry-level coordination, let’s focus on the enforcement of copyrights. For technical enforcement, it’s not enough to identify legal copies or streams as they navigate the web. That only opens the lanes for legal content to reach customers. It’s also necessary to close the lanes for illegal content. That can be done by closing down sources of illegal copies like BitTorrent sites or blocking the traffic enabled by these sites. For both of these strategies, it is the concerted and coordinated efforts by content owners, distributors, regulators, and enforcement agencies that will have the most impact.

To back up this claim, let me point to the work of Brett Danaher, an economist from Wellesley College and visiting researcher at Carnegie Mellon, who has been studying this problem for nearly 10 years. In a recently released study with Mike Smith and Rahul Telang at Carnegie Mellon, Danaher analyzed the impact on piracy and legal downloading of two site blocking events in the U.K. Danaher states: “One event was the blocking of Pirate Bay in 2012, and the other one was the near simultaneous blocking of 28 sites in 2013, 19 of which were for video content. The 2012 blocking of Pirate Bay had no significant effect to curb piracy or increase legal consumption, because most pirates simply found another site to engage in illegal downloading. But the blocking of 19 pirate sites in 2013 led to a statistically significant reduction in piracy and an increase in legal consumption of video content.”

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Interestingly, much of the media coverage about the study so far has focused on the failure of the isolated Pirate Bay blocking. But the key lesson has been overlooked, and it can be traced to best practices for revenue protection in other industries: trying to cover one of many holes is bound to have little impact on revenue leakage. The idea is to make piracy costly in terms of time and effort, since you can’t realistically eliminate it. To illustrate this, Danaher adds: “We found that many of the heaviest pirate users were able to get around the 19 site blocking, but less sophisticated users had a harder time, so many opted for legal purchases.” No matter how hard you try, expert pirates are likely to find work-arounds to enforcement, but the mainstream majority can be deterred and educated to purchase legal content as long as it is available for a reasonable price.

We may never see the end of piracy. But if industry and government coordinate effectively, piracy can be corralled and contained. One way is to simultaneously and strategically block illegal content from the main enabling sites, although European regulations are more amenable to multi-site blocking at this point. But notice that the new U.S. net neutrality rules don’t preclude Internet Service Providers from blocking or throttling illegal content, which may be setting legal grounds for them to do so. Regardless, a strategic, multi-pronged approach to curb piracy is necessary to bring back billions of dollars to artists and copyright holders, and the cooperation between industry and government is critical. There is light at the end of the tunnel to corral piracy, if only the key stakeholders fully engage globally as a united front.