Piracy costs the entertainment industry huge revenue losses every year. Streaming services need to join hands in developing a consolidated content selection site that provides viewers safe and secure content at their convenience.
A great pirate does not require such intricacies.” —Captain Jack Sparrow, Pirates of the Caribbean: Dead Men Tell No Tales, Disney, 2017
Awhile back—quite a while—we spent frustrating days divorcing our cable bundle of hundreds of channels (we only watched a few, the rest were just “there”). It wasn’t a messy divorce, just tough. We had begun moving to watching VOD—what we wanted, when we wanted, on the screen we wanted. Monthly subscriptions with Netflix, Disney+, Amazon Prime, Apple TV+ (daughter), and on-again, off-again relationships with Hulu, HBO Max, and Paramount+.
Then there were casual relationships that were free although with ads services—Tubi, FreeVee (formerly IMDb TV). We’re not proud, free is free and the ads weren’t that bad.
The problem was the subscription costs seemed more frequent than our old pay TV bill—probably not, but we moved most of the subscriptions to their lower-cost, ad-supported services, and that solved the budget issue. We were still faced with an obstacle that reminded us of Freddy Fender’s song Wasted Days and Wasted Nights. Finding just the right movie/show was/is a freakin’ hassle! It shouldn’t be this hard… but it is.
Of course, there’s a solution studied—and supported—by “academics” from the Universities of North Carolina and Delaware that came to the conclusion that watching pirated movies/shows in many ways is not as bad as one is led to believe; and in many ways, it is a good thing perhaps overall. Their conclusion was that folks who watch pirated content spent more money on high-speed Internet, broadband, to access the streaming video, and that’s a good thing for the ecosystem… right? It suggests that “legal” consumption of digital content over the Internet actually increased. All we can say is it’s 37 pages of BS.
First, if they had really “studied” the industry, they would have found that 80% of global video pirated materials come from illegal streaming services—torrent sites. Providing “free” entertainment resulted in more than 230 billion torrent viewer visits last year.
Statista puts the revenue losses at approximately $50 billion, while Digital TV Research puts the annual global losses between $40 billion and $97.1 billion. Those unrealized ticket/subscription sales could have saved thousands of jobs at studios around the globe—including WBD—and enabled studios/streamers in green-lighting/investing in even more great content.
We did enjoy a University of Houston marketing study (https://tinyurl.com/bkms5fhk) that stated the increase in Netflix pirate downloads in the Middle East/APAC was due to the fact that the company hadn’t expanded globally as announced several years ago so, and torrent sites stepped in to fill the gap for folks—a pure market opportunity in many ways without the viewer really knowing. Well, guess that’s as good a conclusion to jump to as anything.
Of course, Netflix was operating under a handicap… they were trying to be legal, which meant negotiating with each country’s government to offer their service to the citizens. Usually, that means committing to developing at least 30% of their content for local consumption. Early on, Hastings and Sarandos (co-CEOs) found that was a good thing because they quickly found that content produced in new regions was also interesting to viewers in other countries and increasingly around the globe. Academics can’t be bothered with little things like that… jeez! But he and our North Carolina and Delaware University folks got it wrong by identifying and blaming “them” for all the piracy of content.
According to Digital TV Research, 67% of the pirate sites are hosted in North America and Western Europe, with more than 230 billion folks enjoying their free movies/shows and resulting in lost income of $50 billion–$70 billion last year. The US lost the most to online piracy last year—an estimated $11.6 billion, thanks to “local” visitors. Even with all its surveillance, China came in second, losing an estimated $8.9 billion last year. APAC has overtaken North America for the largest region of online piracy, totaling nearly $20 billion in losses.
“Piracy will always be part of the model,” said Allan McLennan, chief exec/global head of M&E industry strategy, PADEM Media Group, “but consumption rates will start to decelerate as the benefits of legal choices become more apparent, especially now that there are options that are more flexible/economically attractive.”
Studios around the globe (especially those with fledgling streaming services) experimented with a variety of release strategies over the last two years—simultaneous releases as well as seven-day and longer releases.
The goal was to:
- Provide content to movie fanatics.
- Respond to theater owners’ requests for something—anything—to put on their screens.
- Deliver a response to investors’/stakeholders’ growing fiscal concerns.
OK, so maybe studios saw an opportunity to break the long-disputed/outmoded theatrical window once and for all, but at what cost? Studios saw simultaneous theatrical/streaming releases as a way to satisfy seat-in-seat diehards (young males) and to feed unique content to their streaming service to increase subscriptions. Simultaneous releases satisfied absolutely no one and hurt major project providers, especially WBD and Disney.
The decision cost “a few people” their jobs at WBD and forced the company to pay out hundreds of millions to appease surprised stakeholders. The move also significantly damaged the company’s long-standing reputation as “the house to go to make great films.” Disney’s move with Black Widow was an expensive financial and image move by former CEO Bob Chapek, but both recovered and improved. The Mouse House took ownership of the mistake, improved its communication with all parties, and refined its delivery of good/great content for movie house aficionados and home subscribers. The real benefactors of simultaneous release were pirates.
It’s surprisingly easy to copy a movie from a streaming platform… it just takes a few minutes or, if you’re less than competent, an hour. Bam! Instantly, the pirate site can offer folks a pristine 4K HD/UHD film/show for “free,” depriving the streaming service of income and giving the freebie folks something extra.
The move proved what Netflix had learned since its earliest days of sending out red envelopes—people will steal content as quickly as possible and the closer to the “source,” the better the quality. Films/shows ripped from DVDs were pretty good, but content grabbed from the video stream was excellent.
“Rampant piracy reinforced movie house’s argument for an exclusive theatrical window. It also raised the importance of content security and the creation of organizations such as CDSA to take more proactive action against pirate sites in addition to improving their responses to illegal activities,” McLennan noted. “Tiered service pricing and two-factor authentications have started to somewhat reduce password sharing—however, it will never be entirely eliminated. The industry has to focus on smartly securing their content from the first scene shot to final edit and then to the distribution and the viewer.”
McLennan emphasized: “Piracy, regardless of what some people like to say, is not a victimless crime. “It costs everyone in the industry… no one escapes the impact.”
We find it almost humorous for academics to come to the conclusion that pirate sites are actually a boon to the streaming industry by stimulating more interest and excitement to watch new content.
By following their logic, people who walk through stores picking up and walking out with goods without paying is good for product producers and stores because it is turning inventory. However, retail shrinkage (a nice name for theft) costs consumer goods manufacturers/stores an average of 1.4–2% of sales annually. It costs workers in the form of lower wages, fewer benefits, fewer available jobs. It costs consumers in the form of higher prices. The same is true of the content creation, production, delivery industry.
In our opinion, people, who say pirate viewing is victimless and is actually beneficial to the content industry, decided what outcome they wanted first and then miraculously found the research supported their conclusion. But that’s just our opinion!Narrowing the cinematic window won’t eliminate piracy, but it will lengthen the time for high-quality copies to become available around the globe. Studios and streaming services (Netflix, Amazon Prime, Disney, Paramount, Universal, Apple TV, WBD, the thousands of small/large creative houses, and hundreds of streamers around the globe) have to do more to protect their entertainment assets. There are solutions that go after pirates, like the legal action that IBCAP (International Broadcaster Coalition Against Piracy) took against iStar. It resulted in the CEO having to cough up $15.7 million, but it’s a lot like playing Whac-A-Mole. One down, another pops up.
McLennan feels a more positive move would be to help people understand what pirate sites give users in addition to a “free” movie/show. “Few people, especially 16-to-24-year-old males—the predominant pirate visitor—really understand what they get in addition to that free movie/show,” he emphasized.
Citing a UK study early last year, McLennan noted that three in five users were unaware of the dangers of visiting/using pirate sites—fraud, identity theft, and malware.
Whether people are using illegal streaming boxes like Kodi (said to be loaded with pirate software), which the North Carolina/Delaware professors suggested, or visiting their favorite pirate site, the industry needs to do a more proactive job of letting people know the hidden dangers. Interestingly, the industry did nothing to highlight the fact that the Singapore Police Force arrested a group of citizens (https://tinyurl.com/s7mzbc3c) for selling the illegal streaming devices and that they would continue to pursue others because to the Singapore Police, it was a serious crime.
The least the industry can do is promote the fact and that illegal downloaders are 28 times more likely to have their device infected by malware, resulting in the individual’s personal data being potentially used by not very nice people and/or having their device accessed and used for illegal purposes. The DCA (Digital Citizens Alliance), for instance, releases reports on malware and Internet consumer safety.
McLennan noted that content producers/owners can be more proactive by more aggressively using DRM (digital rights management) encryption/decryption and theft detection/takedown technology in addition to incentivizing consumers to use legal and safe entertainment sources. Now, we know it’s a reach, but one of the ways may be for someone to copy the pirates’ best practices.
Yes, the site looks a lot like your streaming video program guide, but it has all the household’s subscription/free/ad-supported content. List all your services once, then access your personalized entertainment site, and very quickly choose the movie/show you’re interested in—and sit back and enjoy it on your screen. If all the major studios/streamers got together and funded an aggregation service that provided safe viewing assurances, it would/could be a hit with online viewers around the globe.
Imagine not having to jump from site to site. You could save hours, your sanity, and who knows, maybe even your personal relationship. It’s such a straightforward idea, it just might work. It wouldn’t relieve content creators, producers, deliverers from the responsibility of ensuring their content was secured and safe, but it would take away a major reason for consumers visiting pirate sites… convenience.
Who knows, it just might become the Web’s most widely visited site, surpassing Google, Facebook, YouTube, Twitter, TikTok, Baidu, Instagram, Reddit, and the other social media sites. Content owners/streamers can still use those sites to promote all their new, unique content, so they can get folks excited about the new stuff, while also showing they understand/value the consumer.
The move will reinforce the fact that even Carina Smyth doesn’t think that visiting pirate sites is a smart move.
“We may not totally eliminate pirate-enabled “free” content viewing,” McLennan said, “but we might convince academics and influencers that pirated video entertainment is not a victimless crime. The more the industry does to highlight the problem and offer consumers a fast, easy, safe and economically beneficial solution, the better off everyone will be.”