Pirating TV and movies may not be a new issue, but research from Ampere Analysis and Synamedia shows just how much potential revenue is being stolen off the table each year.
In a survey of seven countries, the report finds the U.S. has the most to gain by clamping down and converting pirate viewers to legal subscribers. Stopping movie and TV piracy in the U.S. has the potential to drive $13.7 billion in annual revenue for the market, according to Ampere’s findings commissioned by Synamedia, with an additional $5 billion added to the pot related to sports.
The report said this would generate $5.9 billion in annual income for U.S. streaming providers. And while there’s a vast variety of content available both legally and illegally, the 28 most heavily pirated movies and TV titles alone would contribute up to $1.8 billion in new revenue in the U.S.
Synamedia’s report involved 16,000 consumers in Brazil, Italy, India, Germany, Thailand, U.K. and the U.S. The research determined behavioral pathways consumers would take if sports and entertainment piracy was completely blocked, accounting for the impact on cinema attendance, transactional behavior, traditional pay TV and streaming subscription upgrades. To generate revenue estimates it took into account both immediate revenue from a new subscription to a service or channel as well as the entire annual customer value based on churn information.
Although sports are a highly pirated category, the Ampere analysis found fragmentation of content rights across an increasing number of services is now affecting piracy in the entertainment market in a similar fashion. Per the study, the value of entertainment piracy is 300% greater, or three times bigger, than sports – with the latter representing a $9.8 billion potential revenue opportunity across the seven markets surveyed if piracy was stopped, compared to the additional $21.8 billion revenue potential from converting movie and TV pirates to legal services.
Based on the report, it looks as though the growing number of streaming services consumers subscribe to could be contributing to more people turning to pirated content. Ampere said pirate viewers tend to be those that are most engaged with content, and as the number of subscriptions rises so too does their likeliness to watch pirated content. A whopping 91% of respondents who had access to five or more legal video subscription services have also watched illegal content.
“There is a persistent myth that the pirate consumer won't pay and will never pay. 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,” said Guy Bisson, executive director and co-founder of Ampere Analysis. “We already knew sports piracy was a big-money issue, but what surprised us most about this study was the true scale of impact on the US major studios and Hollywood as a whole.”
Stealing laughs
When it comes to the kind of entertainment content consumers are watching illegally, laughs topped the list.
The report found comedy to be the most pirated genre of entertainment, with half of all pirate viewers streaming that type of content illegally. Top titles driving piracy in the comedy category include “Ghostbusters: Afterlife” and Apple TV+’s “Ted Lasso.” The next most-pirated categories included action and adventure, and crime and thriller.
And for those debuting major films alongside streaming services, piracy of even a single title can have major revenue implications.
The report found that stopping piracy of one major Hollywood movie release could create revenues between $130 million and $280 million in the U.S. Money-making superhero blockbusters present the biggest opportunity – for example, the analysis found that if “Spider Man: No Way Home” was blocked from piracy, it would lead to potential revenue of over $400 million for a studio streaming service. That’s based on the annual lifetime value of streaming subscribers as the research also measured the impact of individual movie titles and TV shows on consumers’ interest in signing up for services.
“Unless the industry takes action, the fragmentation of premium content compounded by the current economic climate will continue to drive viewers to both paid and free piracy services. This represents a real risk to rights holders, broadcasters and streaming providers,” said Avigail Gutman, VP of Intelligence and Security Operations at Synamedia. “As well as using tools and techniques to protect content and services, operators can counter the rise in piracy by ensuring content is easy to find and meeting consumers’ demands for mobile-first services, as well as more aggregated services and billing.”
While password sharing is a common practice, it’s also an issue for streaming providers, with Synamedia software identifying both “casual sharing” and “fraudulent sharing” when it comes to piracy and fraud detection and response.
Netflix may be top of mind the streaming industry about its intentions to crackdown on account and password sharing as it looks to new avenues for growth. The streaming giant plans to roll out mechanisms more widely in Q1 to monetize users who are sharing the service among different households. Netflix has estimated more than 100 million households are sharing accounts, saying in Q4 results that it “undermines our long term ability to invest in and improve Netflix, as well as build our business.”
While the SVOD giant has tested out paid sharing in certain Latin America markets, this week it said details for implementing it in the U.S. have yet to be confirmed.