Online video piracy: Ways the industry could address the growing problem

online video illegal downloadingOnline video piracy, once thought on the wane thanks to inexpensive SVOD services like Hulu and Netflix, is showing that it's still a resilient foe, according to recent findings. To combat illegal downloads and streaming, industry players may need to toss out old solutions and adopt tactics that seem, on the surface, a little crazy.

It's the problem that won't go away: Illegal content proliferates across the Web, with files available for download through torrent sites or searchable--and streamable--on major sites including YouTube, despite its efforts to clamp down on the problem. Indeed, video piracy itself has morphed away from copying physical discs and toward direct streaming of online video.

And while SVOD (subscription video on demand) and transactional VOD (TVOD) services appear to have slowed the incidence of illegal downloads, finding such content is still easy, even with preventative measures in place and occasional awareness campaigns.

For example, a 2014 study by Medialink for the Digital Citizens Alliance said that BitTorrent portal sites made as much as $6 million annually through advertising.*

The rapid growth of online video has revealed both sides of the OTT coin: more content, both archived and original, is available to consumers than ever before. However, viewer appetites for the latest and greatest content only continue to grow. That appetite is feeding demand for pirated video.

Irdeto recently illustrated the link between content that is drawing consumer attention and the increase in piracy that results. The company released a study in February showing that illegal sharing of movies being considered for an Academy Award jumps immediately following an Oscar nomination. In the case of Selma, for example, illegal downloads of the movie--mostly screener DVDs sent out to media and judges--skyrocketed 1,032 percent between its nomination as Best Picture and the week before the awards ceremony.

Irdeto piracy increase and revenue

At top, Illegal downloads of movies increased following their nominations for an Oscar. At bottom, the potential revenue earned (or lost) through illegal downloads.(Source: Irdeto)

"Traditionally in the industry these less mainstream movies have really benefited from the Oscars nomination process. It's generated revenue for them and advertising that they couldn't afford (before)," said Rory O'Connor, VP of services for Irdeto, in an interview with FierceOnlineVideo. "This is a very worrying concern because of course the whole Oscars process was put in place to promote good filmmaking and give the little guys a chance. Now what's actually happening is it's giving pirates a chance."

It's not limited to on-demand content, either: Live-streamed sports has taken a hit from online piracy, and that has had consequences for audiences trying to access sporting events legitimately. "In November 2013, the English Premier League reduced the number of matches available for broadcast in the Middle East by Al Jazeera, because pirates were redistributing that programming back into the UK, cannibalizing distribution through its home market distribution partners, BT and BSkyB," a Viaccess-Orca white paper on piracy stated.

Last year's World Cup, Viaccess-Orca reported, saw at least 20 million illegal streams during the soccer tournament's live matches, with between 100,000 and 500,000 viewers illegally accessing each game (depending on its popularity). Sites like Iguide, Leton and Ukcast were among the biggest offenders.

Viaccess-Orca World Cup heat map

A "heat map" showing countries that topped the number of illegal live streams during the 2014 World Cup. (Source: Viaccess-Orca)

Because of the high dollar value around live-streamed sports, piracy in this segment can take on a very sophisticated air, with illegal streaming sites like Zona appearing to be a legitimate streaming app to unknowing viewers.

With sports continuing to rise in popularity among online viewers, finding a solution is problematic.

Heavy-handed measures largely fail to pay off

In February 2015, a court in La Rochelle, France sentenced a man convicted of illegally downloading and selling copyrighted videos, ordering him to pay over €2 million ($2.15 million) in damages to U.S. studios in addition to his 28-month suspended sentence. The decision was the latest in ongoing legal moves against video pirates in European countries, such as Finland's imposing a €300 ($327.83) fine in 2013 against a dad whose nine-year-old daughter accessed The Pirate Bay's website while hunting for her favorite musician's content.

Such widely publicized tactics against individuals are no longer as prevalent in the U.S. Between 2003 and 2006, for example, the RIAA sued more than 20,000 individuals for sharing music files online. Between 2006 and 2008, the organization reported in IRS filings that it spent $64 million pursuing individual file sharers, but won just $1.36 million from its claims--a financial boondoggle that, along with the negative publicity generated by suing children and dead people led the organization in 2008 to announce it would no longer pursue legal claims against individuals. Since then, in the U.S. and elsewhere, litigation by groups like the RIAA and its counterpart, the MPAA, against individuals who illegally download movies, TV shows, music and other copyrighted entertainment has slowed.

The music industry's expensive campaign showed that direct litigation doesn't work very well against most illegal file sharers in the U.S. That tactic has become a "legal minefield," Irdeto's O'Connor said, noting that instead, the industry needs "to fight people who make money out of this piracy."

Though a federal court in late-2014 stopped the organizations from being able to file single piracy cases against a large number of defendants, the groups continue to go after online uploaders and file-sharing sites. These include Megaupload and torrent-type sites including some featuring the media and entertainment industry's latest nightmare, the open-source Popcorn Time content discovery interface.

So how can copyright holders protect their works on the Internet, which for online video is still very much the Wild West?

The media and entertainment industry, online video providers, and ISPs have for the past five years or so tried some less draconian tactics: warning viewers of the dangers of accessing pirated content, setting up methods to warn consumers who download illegal content, and implementing measures to report content and issue takedown notices.

The UK's Industry Trust, for example, tried the "you'll catch a virus" scare tactic in one 2014 campaign that warned consumers of the dangers of downloading content from sketchy torrent sites.

The MPAA's Copyright Alert System, implemented nearly three years ago, allows content owners to notify ISPs that their work is being shared through torrent downloads.

YouTube--which has the advantage of holding control over content hosted on its site--has a tough policy on videos uploaded to its service, taking down suspect videos as soon as they're detected or reported.

While these methods are easier for consumers to stomach than a lawsuit, it's questionable as to how effective these public service campaigns and stern emails are. The UK last year defanged its "three strikes" guidelines and now requires no action from ISPs for repeat downloaders. ISPs in the U.S. continue to follow the "six strikes" guidelines of the Copyright Alert System, but few stats are available on how many subscribers have been knocked offline after hitting that guideline limit. A report by Copyright and Technology found that just under 8 percent of the 1.3 million ISP subscribers who were warned under the guidelines in 2013 reached the "mitigation" stage (where their broadband access was slowed or other penalties imposed). And of course, streaming through pirate sites or via VPNs (which can allow users to stream video that isn't normally available in their geographic area by masking their actual IP address) isn't typically tracked by ISPs.

CAS 2013 data

Copyright Alert System number and type of alerts sent, 2013. (Source: Center for Copyright Information)

The problem has led to some innovation: For example, BroadbandTV was built on an early business model that involved helping YouTube manage copyright-violating content. BroadbandTV's service offers an alternative to takedowns on YouTube. When illegal content is found, it asks content owners whether they'd like to see the content removed from YouTube, or if instead they want to simply receive a share of revenue from ads that run alongside what they deem "fan-uploaded" content.

New tactics: Innovate, and give the people what they want

Accessing uber-popular content like Game of Thrones drives a lot of online piracy. The series routinely tops torrent lists when a new season airs. But viewers aren't usually deliberately hunting for illegal versions of the show. It's either unavailable, or they can't access it.

A 2012 cartoon on The Oatmeal website illustrated viewers' dilemma concisely, with a hapless consumer struggling to find a legitimate way to download and watch the series before finally resorting to downloading an illegal copy.

While more content than ever before is available online--either through SVOD services, TV Everywhere apps, or via direct purchase through iTunes, Amazon, and other transactional video on demand (TVOD) sites, users still struggle to find some of the content they want to watch.

Improving search and recommendation could help viewers find a lot of the content that is available, legally and online.

"In the U.S., 86 percent of Netflix content is also found on major MSOs' catalogs," Kannuu CEO Todd Vielgut told FierceOnlineVideo. "Consumers don't really understand that. So something has to shift in the discovery paradigm to let consumers see that. (Operators need to) help them find it through the video on demand catalog."

That still won't help in the case of Game of Thrones, which isn't released for download until several months after a season ends. But if a movie or TV series isn't available, a good recommendation engine can direct viewers to similar content that might temporarily sate them. "That title may not be there, but here's three more that match your interest or personality profile, as options," Vielgut said.

But there's one idea that might put a big dent in illegal streamers' business: narrowing or collapsing movie release windows.

The motion picture industry let out the equivalent of a guffaw several months ago when Netflix content guru Ted Sarandos said that the SVOD provider would be simultaneously releasing the movie Crouching Tiger, Hidden Dragon: The Green Legend both online and in IMAX theaters nationwide this August.

"What I am hoping is that it will be a proof point that the sky doesn't fall," Sarandos told The New York Times. "These are two different experiences, like going to a football game and watching a football game on TV."

What's not known is if Sarandos also saw the tactic as a way to keep the upcoming sequel from garnering any profits for pirate sites between the movie's theatrical release and its Netflix availability. But the Irdeto report--and the late-November fiasco surrounding Sony Pictures' movie The Interview--brought the idea of collapsed release windows back to the forefront.

Irdeto's O'Connor said that reducing the time between theatrical release and VOD availability can help defeat piracy, at least in the on-demand realm.

"You can't beat free, but you can beat (piracy) with easy," said O'Connor. Viewers who miss a film in theaters may jump at the chance to stream it.

"What we're advocating is a collapsing of the release windows to ensure that people can legitimately acquire the content when the publicity is generated," he said. "The natural reaction of people is when they read about something they want to watch it … most folks will pay a reasonable price if there's a legitimate alternative."

If content owners and providers can embrace a tactic that, to them, seems like the complete opposite of a profitable business model, online piracy could take a serious hit. Not a death-blow--live-streamed sports are still a nattering problem for the industry--but certainly a start.

* Update: We initially identified the Digital Citizens Alliance as a supporter of the SOPA/PIPA act. DCA says it does not support SOPA-like legislation, nor did it exist when the act was being debated. We've edited the feature to reflect this information.

Online video piracy: Ways the industry could address the growing problem