The Sky Is Falling, At Least in the EFF’s Digital World

“What color is the sky in your world?” 

A polite and gently humorous way to tell another party that their reality may be a little different to the one the rest of us are experiencing. Unfortunately it’s Chicken Little, if you’re the Electronic Frontier Foundation (EFF), and you inhabit a digital world in which the sky is constantly falling.

 

Nowhere is that more evident than this week, as the organization that charges itself with “Defending Your Rights In the Digital World” channels the righteous efforts of its legal team towards supporting Movietube, a site that excels in ripping off the digital rights of creators.

The concept is simple, until you choose to complicate and obfuscate in the manner that the EFF has down to a fine art.

Movietube and the  sites that it associates with its service are operated to serve up stolen content, unpaid and unlicensed from its original creators. That content gives the site a selling point to attract its traffic, on the basis of which it sells advertising, subscriptions, or both. Less some minor hosting and maintenance costs, the gap between what the site should have paid for that content and what it can bring by providing it for free is pure profit. Profit that the creative talent behind said content can never see, of course, because Movietube and its ilk are ripping them off without compunction or a care for the law.

The latter is important, because these sites operate outside of national law, in the digital world that the EFF is so staunchly defending. This is a world in which the creator has no rights or respect, and serves simply to make the content that others can profit from. To confirm this, look no further than the site’s policy on content licensing:

“Luckily we are not a US company, so we do not need to respect US laws.” -Movietube

By running their sites from countries without the motivation or means to pursue them, the current legal framework makes it extremely difficult to protect intellectual property across some international borders. Productions that might cost hundreds of millions of dollars and countless creative hours to make are immediately released for free public viewing in this reality, which begs the question: how are creators supposed to live in this world the EFF is trying to mould?

 

 

But while it conveniently ignores the legal transgressions of piracy sites in favor of spouting its latest Doomsday scenario, the EFF simultaneously exaggerates the legal action being sought by rightsholders in their suit against Movietube.

Far from seeking “one court order to bind… the entire Internet,” as the rather Tolkien-esque language employed in a blog by EFF lawyer Mitch Stoltz proclaims, studios are in fact seeking injunctions based on infringement complaints that are well established in copyright case law.

Moreover, these actions are pursued in federal courts that fully respect our founding legal principle of due process. Action is only taken against defendants if and when an independent court determines that the legal rights of US creators have been violated, and only binds third parties that have direct ties with the infringing party, by actively aiding that copyright infringement.

With these details presented, the only recourse for those with a pathological fear of any legal action involving Internet content restriction is to muddy the waters. By painting the issue with broad strokes Doomsday scenarios and infusing the discussion with the fear-mongering so characteristic of technology lobbying.

The sky is falling…. again.

Which brings us back to SOPA; such a frequently used crutch of the technology lobby that its original context matters not a jot, so long as it supports that aforementioned skyline from falling to whatever is chosen as this week’s extinction level event.

The EFF and its well-positioned cronies around the tech sector keep returning to SOPA for one reason: it’s the perfect rabble-rouser. SOPA is to tech populism as Obamacare is to the political far-right in the US, a cultural shorthand guaranteed to raise the ire of your rank and file, regardless of how it is twisted or inaccurately applied as a comparison.

As effective as this tactic is, it tends to be rolled out whenever the underlying argument against the actual issue is inherently weak. After examining the content of Movietube’s character, and the exaggerated rhetoric of the EFF’s argument against penalizing it, we’ll leave you to decide which world is the better one for creators to live in.

 

Beware Your Webcam! Overseas RAT Hackers Invade U.S. Homes

Webcams are among the latest tools being used by hackers,  who literally peek into bedrooms. This from a report, Selling Slaving,  just released by the Digital Citizens Alliance (DCA), focusing on a subset of hackers known as “ratters.”

The name is an acronym for “Remote Access Trojans,” an easily accessible type of malware that enables hackers to take control of individual computers from afar.

The computers ratters enlist in their efforts are known as slaves. DCA found international hackers invading the privacy of devices in 33 states, as well as other countries, with many providing commentary in Arabic about the response of their victims.

 

A RAT victim unknowingly captured by her own webcam. The video ran on YouTube – not the advertisement.

The malware is loaded by unknowing, often young users who frequent pirates sites like Pirate Bay and KickassTorrents. Once loaded the malware opens the door to everything on a computer, including its webcam. The invasion of privacy is made even worse by the fact that many ratters post videos, including victims’ names and IP addresses on videos posted on YouTube.

In a disturbing twist, many ratters make money through YouTube’s partner program, running ads on the videos for major brands, and splitting the revenues with YouTube.

The Digital Citizens Alliance also found that a number of ratters engage in the practice of “sextortion,” requiring victims to make videos or else face humiliation online though the use of information that they have acquired from their computers.

Here is a summary of some of the most compelling findings:

  • “Ratters” are aggressively launching 1:1 attacks on consumers and “slaving” their devices, is a growing problem. It takes ratters little time to slave hundreds of devices. From there, they can gather private information off those devices, which they can then use to “sextort” the owners of the devices. Some of the ratters’ victims have been forced to make videos where they must do as the ratters say or be publicly humiliated.
  • On the hackers’ chat room, Hack Forums, there are more than 1.5 million posts that discuss acquiring, creating, and spreading RATs (as of 7/22/15). Digital Citizens found one post where a Hack Forums participant offered access to the devices of girls for $5 and guys for $1. We found repeated posts where ratters said the best places to spread RATs were YouTube and content theft sites, like Pirate Bay and KickassTorrents.
  • Digital Citizens went on to YouTube and scoured through hundreds of ratters’ videos with ads from well-known companies – running alongside the videos. Many videos had the faces of victims and IP addresses to hacked computers. In fact, Digital Citizens researchers found IP addresses potentially connected to devices in 33 states and dozens of other countries.
  • On Hack Forums, ratters talked about how content theft sites, like Pirate Bay, and KickassTorrents, were great places from which to spread RATs.  Researchers also found YouTube videos demonstrating how to use content theft sites to trick victims into downloading dangerous malware.
  • Ratters can make money through YouTube Partner Program. If a ratter joins the YouTube Partner Program, and, like the videos in our report, their video is “approved” then it starts to be monetized. In the Partner Program, YouTube promises to split ad revenues with that approved videos for their traffic. You start getting views on YouTube, you start making money – potentially thousands of dollars. In a survey of 200 RAT videos Digital Citizens researchers found ads running on nearly 40 percent.

 

Spain Is the Latest Nation to Make Progress Against Piracy

It’s always a rough ride for national governments trying to curb content piracy within their borders. Trying to promote legitimate streaming and download services while punishing illegitimate platforms is tough enough,m but the challenge is even harder when it comes to balancing punitive measures with education for end consumers.

For all the setbacks, though, 2015 is showing signs of success for anti-piracy initiatives at the national level. 

 

Earlier this year we were happy to report on Norway’s progress against piracy. Now, at the halfway point, it’s Spain’s turn to trumpet some positive results, as Spaniards turn towards legal channels, especially on the streaming side.

As a little background, as recently as last year, Spain was Western Europe’s black sheep of the family in terms of content theft. A report commissioned by the Coalition Against Piracy found that a massive 88 percent of all digital content accessed by Spanish consumers came was unlicensed. That was only a four percent rise on the previous year, demonstrating just how established and brazen these illegal players had become in Spanish society.

At an estimated cost approaching $2 billion lost to rights holders, Spain was clearly a piracy hotspot.

Thankfully, the country’s government took that slight to heart and enacted some serious legislation to tackle the problem, including greater attention to intellectual property complaints by the authorities and the potential to block Internet service providers (ISPs) who facilitate access to illegal sites.

These efforts began back in 2012, so there has been some overlap, but now the country’s Ministry of Education, Culture, and Sports is reporting signs of success at every level.

The highlights include:

  • 98% of all content removal requests, covering 247 sites, have been heeded, while 95% of 444 creator complaints against unlicensed content have been resolved satisfactorily,
  • Annual music revenues returned to positive growth in 2014, following a historic low the previous year, reaching $150 million dollars and posting a further 11% growth in year-on-year spending for the first half of 2015,
  • The number of pirate sites in the top 250 visited websites in Spain has been cut in half since 2012, partly due to ISP blocks but also as a result of changing consumer behavior.

As is believed to be the case in the many Scandinavian success stories, streaming music services are driving a return to legal consumption for many Spanish music fans. The movie industry will hope to see similar results in the coming year, as Netflix gets ready to launch in Spain and bring all the competitive attention that its presence in a market tends to catalyze.

In such a piracy black spot, this news represents a positive development that creators and rights holders will hope can move from short-term trend to long-term habit.

After all, the more nations that can successfully balance education with enforcement, while at the same time introducing the kind of legal content services that consumers enjoy, the more chance we have of seeing this national progress turn into a global phenomenon.

 

 

Influential Coalition Calls for Global IP Protection

A coalition of 85 think tanks, advocacy groups, and organizations has written to the World Intellectual Property Organization (WIPO) to push home just how vital copyright is for vibrant economies around the world. The collective spans 51 countries and represents a significant request to develop intellectual property respect on a global scale.

The group, headed up by the Property Rights Alliance, reaffirmed their support for strong IP laws in a letter to the Director General of WIPO, Dr. Francis Gurry (pictured below, right, with actor Javier Bardem).

 

The communication covers eight key areas that the collective organizations believe cut to the heart of copyright’s social and economic benefits. These are:

  • Rule of Law, Property, and a Transparent Political Environment are the Foundation of Fair and Prosperous Societies
  • Intellectual Property Rights are Affirmed in International Treaties as a Human Right
  • Intellectual Property Rights Promote Free Speech and Expression
  • Intellectual Property Rights are Integral to Consumer Protection and Global Security
  • Strong Intellectual Property Rights and Contractual Freedom Promote Free and Competitive Markets
  • Intellectual Property Rights are Vital to Economic Competitiveness
  • Intellectual Property Rights Must Be Protected Through Effective IP Provisions in Trade Agreements
  • Intellectual Property Rights Must Be Respected and Protected on the Internet

As a set of guiding principles and touchstones for a stronger society, this is a compelling list. It’s all too easy to limit our thinking around copyright and intellectual property to piracy of music and movies, but the reality is that IP lies at the heart of our culture.

This is because strong copyright law drives creativity.Local access, global network

Knowing that what we create is protected by law and, accordingly, that we can leverage it for economic gain if a market exists, develops an environment in which creative minds can flourish.

They understand not only that their work will be respected, but that it will be protected so that they can build a career upon it, rather than just dabble as a hobbyist.

The letter echoes this sentiment in its conclusion:

“Advanced societies have long understood that by protecting the proprietary rights of artists, authors, entrepreneurs, innovators and inventors, they were promoting the greater public welfare. “

Urging the maintenance and development of intellectual property safeguards for the next generation, the letter neatly sums up the challenge facing creators on a global scale. With such rapid advancement of technology as we have seen in the last few decades, protecting the core concepts of IP becomes more important than ever.

Doing so on a global scale is even more challenging, but equally offers enormous potential for developing and developed markets alike.

The World Intellectual Property Organization is uniquely placed to guide treaty discussion and policy on the international stage, and it can aid creative minds everywhere by heeding the guidance laid out in the coalition’s letter.

 

Will International Appeal Give Apple Music the Edge Over Spotify?

Apple Music launched last week with less fanfare than expected, perhaps a victim of early holiday travel ahead of U.S. Independence Day.

Regardless, it is the long haul that matters most to Apple, as the world’s most valuable brand attempts to claw back the early-mover advantage that Swedish rival Spotify has enjoyed – and exploited  – to date.

Part of that strategy is likely to be played out on the global stage, as Apple’s new streaming service is available in significantly more markets than its peers. 

 

For a quick comparison, Apple Music has launched in more than 100 countries, which is almost twice as many as Spotify currently operates in. Furthermore, there are a number of territories in which Apple has launched its service where neither Spotify nor any other notable competitors currently operate.

Perhaps most importantly of all, these are not all smaller territories with limited market potential.

Among the territories in which Apple Music will beat Spotify to the punch are India, Russia, Japan, and  Nigeria. Between these four alone, the number of potential consumers could stretch into the billions, although activating them inevitably poses a major challenge given prevailing levels of piracy and, with the exception of Japan, less mature streaming markets. This provides a stark contrast to the reverse situation for Spotify, wherein the only markets it will now operate without competition from Apple Music are Turkey, Taiwan and smaller European nations like Liechtenstein and Andorra.

The importance of this advantage cannot be overstated. For many consumers in these countries, which potentially hold the key to the global expansion of streaming music, Apple’s platform will be their first experience of the phenomenon. Given the game-changing nature of digital streaming, not to mention the fact that many hold it up as the long-term solution to piracy, the potential for Apple Music to take giant strides into these territories is just as crucial as its need to build a customer base in the United States, Europe, and Australia.

In June, Spotify announced that it has passed the 20 million mark in terms of paid subscribers, while its overall active user base now numbers more than 75 million globally. Although that growth rate is increasing quickly, Apple Music is not competing from a standing start. The hundreds of millions of active iTunes accounts the Cupertino company has on file provide a solid base to convert to its new service, in addition to the Beats Music users that it hopes to bring across from the service it purchased last year.

All of this sets the stage for an intriguing evolution of the streaming music space. The market, although relatively young, has been waiting for some time for Apple to enter the fray and challenge Spotify’s dominance. It is clearly a battle that Apple intends to win, if the brand’s commitment to pay artists for all streams during its three-month free trial period is anything to go by. That will cost Apple a pretty penny, but the company clearly believes the long-term pay off in terms of brand awareness and the associated loyalty will be worth it.

For artists, the hope has to be that Apple can use its extensive resources to raise awareness of streaming music services and increase . It this really is the piracy killer that many believe it to be, making streaming subscriptions a truly global trend will have everyone involved in the music business singing Apple’s praises.

The Reality of Asking ICANN to Unveil the Anonymous

One of the greatest strengths of the Internet, its ability to operate without right or regard for international borders, is also one of its most troubling. This truly global nature opens up unique opportunities that no other channel can reach but can also used to bypass strong legal frameworks.

Intellectual property is one of those affected areas, and it is for this reason that rights holders and authorities are trying to add a layer of accountability to commercial operations online.

ICANN Logo

ICANN Logo (Photo credit: Wikipedia)

Standing against these efforts is the Electronic Frontier Foundation (EFF). Dedicated to blocking any initiatives that it fears will alter the early days of an Internet without limits – and often without respect for laws – this is an organization with its fingers in a lot of pies. And with its friends in high (tech) places, the EFF also has the funds and associated lobbying power that it denounces in other activist groups.

That said, it comes as no surprise to see the EFF rallying its troops for a debate around the responsibilities of ICANN – the Internet Corporation for Assigned Names and Numbers – which is the US-based entity charged with keeping the Internet “secure, stable and interoperable.” 

That would be fine if the EFF had any intention of making its case in a calm and measured manner. After all, it is ICANN’s stated goal to hear from multiple stakeholders and come to a balanced conclusion about what the wider online community wants to see from the organization. Unfortunately, as we’ve seen in the past, tech sector-backed lobbying groups like EFF tend to take an extreme tack to their activism, rooting arguments in Orwellian language and playing on fear as a primary mode of influence.
That’s a requirement in this case, because there’s no reason to believe that legitimate online entities will be subject to some unprompted mass outing and stripped of their digital liberty by rights holders, as the tech lobbyists are beginning to paint this particular picture. ICANN president Fadi Chehadé  said as much last week in Washington, confirming that the organization will strictly avoid becoming any kind of “content police.”

The issue here is about identifying the bad actors online through ICANN, not molding the organization into judge, jury and executioner. That said, there is still a fundamental role for it to play in securing creative rights online, as its stated objective alludes to.

As a fundamental organizer of the Internet, ICANN cannot avoid its responsibility to aid authorities when a crime is committed. Where anonymity helps criminals, whether content thieves, data hackers, our worse, it should be lifted to help investigators shut down illegal operations.

As a side note, it’s worth remembering that this proposal is not yet final, but it being discussed by a working group at ICANN.  Despite being at such an early stage, EFF lawyers are already calling this idea “troubling,” citing a desire to prevent spam and other minor irritations, at least in comparison to the theft of creative works that anonymity can sometimes cloak.

“Respect our privacy” is the call on early EFF materials. This should really read “Respect Our Piracy,” as the organization once again lines up to fight the removal of a key provision for hiding those who own the domains facilitating content theft.

Sweden Suffers a 25% Revenue Hit Resulting from Piracy

The entertainment industry in Scandinavia has a tendency to occupy both ends of the consumption spectrum. In any one month you might see headlines in Norway proclaiming piracy dead, while the country’s Pirate Party campaigns for its own extreme take on a free and open Internet.

English: Snow Cover Across Scandinavia. In thi...

Snow Cover Across Scandinavia. (Photo credit: Wikipedia)

Meanwhile, in neighboring Sweden, music streaming on sites as wide-ranging as Spotify to illegal veterans The Pirate Bay shows the area as a home to both legitimate profit and piracy.

Thus, depending on your most recent reading material, the situation for copyright protection and creative rights in the region could swing from doom and gloom to profitable paradise in one sitting.

Unfortunately this piece will have to speak to the former, as Sweden’s movie and television industry this month confirmed that it loses an estimated $100 million annually from piracy in the country.

A Frosty Picture for Swedish Filmmakers

The number arises from a report conducted on Swedish TV and movie consumption in 2014, which included 280 million instances of illegal viewing. Commissioned by the country’s Film and TV Industry Cooperation Committee, the findings show that almost one-quarter of the nation’s market for these productions is being lost to consumption via unlicensed channels.

Inevitably, this leads to a frustrating creative environment for filmmakers and TV producers in Sweden. Citing the issues that providing a home to piracy sites causes for creators both at home and abroad, Per Strömbäck, the reporting organization’s expert on digital trade, says “the situation is not sustainable.”

His analysis is correct, and also the reason that copyright activists advocate so vociferously for stronger measures to protect creators globally. Any one country can give rise to piracy and cause significant problems for creators around the world. The 25% figure shows a major concern not just for Sweden, where the impact is of course most immediately felt, but beyond its borders when productions from other countries are viewed by its citizens, or by using services they host.

Fighting Back

The most disheartening part of this latest piracy setback is that Sweden is far from a hospitable place for pirates, at least in terms of upholding copyright law.

On the contrary, the country’s authorities have conducted several raids on piracy server sites this year already, as well as having a hand in bringing the co-founders of The Pirate Bay, which was born in Sweden, to justice.

This is also the nation that just two years ago levied a six-figure fine to an individual for sharing a film illegally. Suffice it to say, the proliferation of piracy in and around Scandinavian countries is not for the want of a strong stance against it by the relevant authorities.

It is the country’s commitment to technological advancement, however, that appears to have set it up as an inviting location for pirates to test their limits. After expanding broadband capabilities in the early days of the Internet, along with encouraging digital consumption of music, movies and television, it was perhaps inevitable that Sweden would become one of the front lines in the fight against piracy.

What is encouraging is the fact that this approach has also allowed legitimate streaming sites to flourish, with the convenience and affordability of what they offer proving a powerful competitor to the lure of piracy sites. The aforementioned headlines in Norway, while perhaps a little overblown, nonetheless prove that legal streaming can make inroads against illegal platforms, given enough time.

With a supportive government and a strong commitment to copyright law, there is every reason to believe that Sweden and its surrounding countries can become a model for entertainment industries around the world, rather than a black mark on the general European trend towards protecting creators.

ISP Blocks Show EU and Russia Driving the Fight for Copyright

As creators and innovators across the country celebrate the 225th anniversary of the first U.S. Copyright Act, it feels counterintuitive to talk about other nations leading us in the fight against infringement.

Nonetheless, the inescapable fact is that most of the decisive action against piracy in 2015 has come from outside our borders, be it Canada’s uncompromising notice-and-notice system that we wrote about last week, or the ISP blocks that are rolling out in the Europe: notably in the UK and even Russia.

The United Kingdom is currently at the forefront of handling piracy through the pipes, rather than at its source. The latest effort saw the country’s highest court order major Internet Service Providers in Britain to block customer access to sites like Freebookspot and Bookfi, which contain several million titles that infringe copyright. The Publisher’s Association sought these blocks after hitting its own frustrating million mark, namely the vast number of DMCA takedown requests filed by the organization and its members.

As we all know by now, these attempts to permanently remove stolen content by directly targeting the sites that host them are ludicrously ineffective, generally seeing the same content popping up via a new link within days, if not hours of being taken down. Such was the case with the books offered up by these sites, forcing the court to authorize more extreme measures and require ISPs to prevent access to them altogether. While there were undoubtedly some titles on the services in question that were legitimate, it’s fair to call any site reputedly comprising as much as 80% unlicensed content a piracy site. The damage to authors was far more significant than the licensed content benefiting consumers, therefore the legal authorities had no choice but to take decisive action.

The case is just the latest in the UK involving more severe measures. The lucrative rights to the English Premier League have long been undercut by sites that live stream their soccer matches, leading the organization to wage an ongoing war on any such site that gains enough popularity. These ISP blocks date back several years and have been successful in kicking some major offenders out of of the game. The battle is continuous, but worth fighting for those who rely on income from the sport. A similar stance has been adopted by organizations representing movie makers and musicians across the pond, showing authorities and the British government that piracy is a wider economic problem, rarely confined to a niche audience.

Western Europe is not too far removed from North America when it comes to valuing creative rights, so exchanging ideas is not unexpected. In terms of Russia, however, the U.S. would expect to be far in front of its old rival when it comes to copyright protection measures.

While it would be unfair to suggest that we lag behind Russia’s anti-piracy ideas – the country was after all labeled a “most notorious market” as recently as last year –  its government has been taking a much stronger stance in 2015. The latest order to block sites like The Pirate Bay stands in stark contrast to the U.S., where we can’t even convince influential American companies like Google to sink the pirates from its search results. Russia is far from being a flag bearer for free and creative expression, but it is showing the kind of uncompromising action that protects the work of those who do hold those values.

While it’s true that copyright infringement is an international problem that must be handled with cross-border co-operation, the value of U.S.-based creators is often disproportionately large compared to other countries. That’s not to denigrate the creative works of other nationalities, merely to show that the United States government has a vested interest in leading the world in the fight against piracy.

As it stands our country is doing far too much following, which does a disservice to the creative sector and those who work tirelessly to feed consumer appetite for entertainment and culture.

Supporting ISP blocks on sites guilty of flagrant infringement would be a good start to getting back out in front.

 

U.S. Looks North of the Border for Anti-Piracy Inspiration

Hollywood is the envy of the world when it comes to making movies. In terms of protecting them once they are made, though? Well, we might need to start looking to the Great White North for our anti-piracy ideas, as a new program in Canada proves to be rather successful in curbing infringing activity.

 

After just a few months in operation, the new Canadian notice system is showing drops in piracy between 50-70 percent on some of the country’s most popular network providers. The system is rooted in Canada’s Copyright Modernization Act, through which ISPs can be required to deliver copyright infringement notices to customers when they themselves are made aware of infringing activity.

Closing the loop between the makers and monitors, the firm behind the initiative – and posting these impressive numbers – is Los Angeles-based rights corporation CEG TEK International.

The results in Canada are all the more surprising because of the mixed results typically associated with notice-based systems, whether they come via ISPs or directly from rights holders.

We all know the limitations of the U.S. DMCA system, whereby rights holders flag infringing content links to the sites that host them, only to see a new link pop up with the same content and the original poster rarely taken to task for the act.

Also common are systems based on infringement “strikes,” where an ISP does notify the infringing party and/or those who access the content. But a strike system is based on escalating warnings and has generally proved too lenient, both here at home, and abroad in countries like France and the UK. The French law in particular, known as HADOPI, was reversed in 2013 after its more severe punishments were poorly enforced and users frequently found a way around the system.

So what makes the Canadian notices system more successful than those that have gone before it?

It is still early days, but it seems the threat of financial penalties are a key motivator in changing behavior north of the border. More importantly, these are not the mind-boggling fees that we saw in the early days of piracy litigation. Rather they are more manageable fines for non-commercial copyright infringement, which give the recipient pause for thought without coming across as a draconian measure.

Even with the maximum cap at $5,000 for these fines, those going out to ISP customers are significantly less. Ranging from the low to mid-hundreds of dollars, the price is not financially crippling for the user but certainly send a message that, even when it can be easily accomplished, content theft remains a crime.

Reports Reveal Global Piracy Fueled By U.S. Advertising Income

Piracy sites around the world continue to profit from U.S. advertisers of all sizes, according to new reports released this month by Incopro (report link) and the Digital Citizens Alliance (DCA – report link).

The former reveals that 88 percent of all income from content theft in the European Union (EU) is based on advertising revenue, while the latter from DCA confirms that global piracy sites still make more than $200 million every year from the ads they display to users.

 

Incopro studied the top 250 piracy sites used in the EU to come up with their headline figure. With almost 9 out of 10 of those sites relying on advertising as their primary source of income, it’s clear that ad money is the main reason for site owners to engage in content theft. In-demand music, movies and games yield more search traffic, which in turn yields more page views and clicks that translate to advertising income.

The DCA report provides more detail about what’s going on under the surface of the advertising ecosystem to allow this to happen.

Good Money Still Gone Bad follows up on the organization’s 2014 report, which valued the revenue from ads to piracy sites at $227 million. The new figure is slightly reduced, yet still in excess of $200 million and failing to show the substantial decrease that actions against global piracy should have yielded.

Global piracy ad funding infographic

 

With regular raids against such sites around the world and major action against leading players like The Pirate Bay, we should expect to see fewer piracy sites for advertising funds to flow into. Although larger sites made up a smaller percentage of the overall sample in this year’s report – and 40 percent of those from the previous study were no longer present – the overall revenue from content theft remained remarkably durable.

A large part of this comes from new sites entering the fray, particularly video platforms engaged in live-streaming. This occurs in real-time and can be very hard to track and shut down in the moment, which is obviously when broadcasting a live event is most profitable to pirates. The recent Mayweather-Pacquiao fight provided a troubling example of this, particularly on new (and ostensibly legitimate) platforms like Meerkat and Twitter’s Periscope. With the incentive to make money from ads and new, poorly regulated platforms through which to do it, it’s clear to see that initiatives against global piracy will need to cast a wider net in the coming years.

Taken together, these two reports provide a clear view of the ad-funded piracy problem. Incopro has shown that advertising is the key incentive for pirates to run their sites, while the Digital Citizens Alliance reveals the types of sites that are springing up and the big U.S. brands that are indirectly funding it.

Cutting off this supply of “bad money” and returning it to the pot for legitimate content sites will be a crucial part of the next moves to tackle global piracy. We can continue to play whack-a-mole with content takedowns and site raids, which is satisfying in the moment but ultimately a short-lived victory as other sites pop up to replace them. Remove the financial incentive, however, and we’ll see how many sites are willing to take the risk of running a site based on stolen content.