Among other findings, a new report from Synamedia and Ampere Analysis reveals that the value of entertainment piracy is currently 300% greater than that of sports, writes David Davies.
In recent weeks IBC365 has addressed the multiple forms of piracy – including the increasingly prevalent method of CDN leeching – that are now confronting the content industry worldwide. A new report prepared by Ampere Analysis on behalf of video technology company Synamedia offers the opportunity to drill down into the precise nature of the content that is proving most attractive to customers of illegal content services.
The report addresses the situation in seven countries – namely USA, UK, Brazil, Germany, Italy, India and Thailand – and concludes that piracy is a “multi-billion-dollar problem”, with more than $30bn in lost revenue each year from the seven nations combined. It’s obviously a deeply troubling figure, but one that is unlikely to come as a shock to most industry observers. What might be more surprising is the extent to which entertainment – led by comedy as the most pirated genre of TV show or movie – presently accounts for the largest share of revenue loss.
Shortly after the report was published, IBC365 caught up with Synamedia’s Senior Director, Security Business Development, Simon Brydon, and Vice-President Marketing Christelle Gental to sift through some of the findings and consider what lessons they yield for content services looking to keep this ever-moving target firmly in their sights.
Piracy by genre
Among the headline statistics, the report reveals that 28 of the most pirated movies and TV shows accounted for $1.8bn in annual losses for studio streamers in the US. Genre-wise, comedy is the most pirated genre of TV or show or movie – 50% of respondents reporting that they illegally stream it – followed by action & adventure and crime & thriller. Overall, the value of entertainment piracy is shown to be three times bigger than that of sports piracy ($31.6bn vs $9.8bn) – a finding that might surprise some given the frequent highlighting of sports during discussions about illegal content services.
The consideration of entertainment in the report was a new move for Synamedia, because its “previous research had been sports-focused,” recalled Gental. In terms of the size of entertainment piracy’s value, she added that it “probably wouldn’t come as a surprise to Hollywood studios, most of whom would say that entertainment is the bigger area.”
The “live and immediate” nature of much sports content has arguably contributed to its prominence in the piracy debate, and the attention given by content services and technology partners to combating it. This new report leaves no one in any doubt that the scale of entertainment piracy – especially that involving major movies and franchise TV series – should never be underestimated.
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Regarding the genre breakdown of entertainment piracy, Brydon noted that “comedy is especially strong with the younger audience in terms of their general consumption, which I think helps to explain its [showing in the statistics] – as opposed to it being ‘popular’ with the pirates. It’s important to make that distinction.”
The fragmentation effect
In exploring the background to the current piracy landscape, the report also indicates that recent fragmentation of content rights across more services is making effective anti-piracy action more challenging. For instance, viewers who watch pirated material tend to be those who are most engaged with content, and as consumers increase the number of legal subscriptions they have, they also become more likely to watch pirated content. Indeed, the study reports that 91% of respondents who have access to five or more legal video subscription services have also watched illegal content.
With increased turbulence in the streaming market, it remains to be seen just how many of the newer services will thrive in the longer-term. But for now, at least, it could be argued that pirate services are fulfilling an aggregation role from which the legitimate content sector has partly abdicated.
As Brydon noted, there are pirates who are “charging for providing a super-aggregator service”. So with the limitations of the current fragmented rights environment becoming increasingly evident, “we should expect there to be more aggregation among the [legitimate] media businesses; in fact, this is already building in certain areas. What will be especially interesting to see will be how the aggregation takes place, and [in which areas] the organisations are prepared to work together – and where they want to compete.”
While the financial resources of Hollywood studios mean that their own services are almost certain to continue, there is a compelling argument for greater collaboration to reduce the present degree of market fracture. “The problem with the creation of a cord-cutting media environment is that, lo and behold, some people have cut the cord to legal content,” remarked Brydon.
Converting pirate viewers
But although the report undoubtedly delivers its fair share of alarming discoveries, it also provides some very clear pointers about where the industry should be directing its efforts moving forwards – not least in terms of moving viewers away from illegal services. For instance, the study notes that Germany, Italy and the UK currently have the lowest levels of piracy among the seven featured countries. But by taking steps to convert pirate viewers to legal subscribers in the UK, for example, video providers and content owners could unlock substantial extra revenues – $1.36bn for entertainment and $1.17bn for sports each year.
Moreover, with so many viewers that spend on pirated content also paying for legitimate services, the process of conversion could – at least in theory – be less intractable than might be imagined. And with pirates more likely to be men under 35 with young children, it’s also clear where the messaging should be targeted first.
“There is a persistent myth that the pirate consumer won’t pay and will never pay,” said Guy Bisson, Executive Director and Co-Founder, Ampere Analysis. “This research overturns this received wisdom, with more than half of all pirate viewers paying for pirate TV services and 54% also paying for legal services.”
‘Making content harder to steal’
Of course, none of this negates the need for concerted action to put illegal streamers out of business permanently, and in this regard it’s clear there has been a marked expansion of efforts during the past 12 months. In particular, the Alliance for Creativity and Entertainment (ACE) has been continuing to grow its Anti-Piracy Coalition, with France Televisions and RTL Deutschland among the media organisations to have joined in recent months. The group has also shut down several major illegal streaming and download operations, including one of France’s most popular sites, Extreme-down, earlier in February.
Studies such as the new one from Ampere Analysis/Synamedia will only strengthen the case for this kind of collective action. Nonetheless, content services may need to up their own game in some respects – taking steps not only to avoid content making its way out into the world pre-release, but also moving more rapidly to identify and remove it from illegal sites later.
Security personnel at content services will routinely state that they “strive to stop content leaking out pre-official release and they accept that, within hours of official release, it will have been pirated and made available online in various ways. An enormous effort is put into protecting pre-release content, and then secondary efforts into having it removed [after official release]. So I would argue that additional technical measures should be taken to a) ensure that it’s harder to steal content from their own services via hacking – ie: force the pirates to take less than optimum quality content; and b) enable content to be detected and removed [more swiftly] through measures such as forensic watermarking.”
Piracy remains the very definition of a ‘moving target’, and the level of investment that will continue to be required – both by media services and technology providers – in keeping one step ahead of illegal operators is set to remain substantial. But among content services, there is another aspect that could benefit from increased attention, and for once it doesn’t necessarily have any financial implications at all.
“I think it would be good if the various teams at [media organisations] – executive leaders, subscription/marketing teams and anti-piracy content production teams – could work together more closely in order to better understand the problem,” summarised Brydon, implying that individual teams might struggle to grasp the overall context given their own intensive workloads. “I think if more could be done [within organisations] to bring the different teams together, it could be really beneficial in tackling the issue.”
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