Tag Archives: brands

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.

Cartier IP Case Poses Questions for Global Enforcement

Parisian luxury accessories company Cartier is set to test the waters of international intellectual property (IP) enforcement, as it goes after counterfeit goods sold online.

While this all sounds fairly standard for a luxury brand with trademarks to protect, the focus of its litigation is not. Rather than the going after the end-sellers and the websites that host them, Cartier has asked a London court to force the Internet service providers in between to block the offending sites outright. If upheld, the brand’s actions could give the green light for other international names to pursue similar action, potentially flipping the burden of enforcement to the middlemen rather than the distributors.

Unsurprisingly that’s a big “if,” as there’s plenty of opposition to this approach, and not only from ISPs.

Free speech activists and civil rights groups will also have a part to play, as whenever there’s talk of shutting down a site, there follow the claims that reckless accusations will be made and legitimate services or speech shut down without “a fair trial.” On the other side of the argument, brands and other rightsholders point out that when their IP is being infringed upon, value is lost with each passing day and their infringement claims are based on a sound knowledge of who is licensed and who isn’t. All ISPs need do to avoid being placed in the spotlight themselves is comply with block orders promptly.

site blocked notice

This approach to cutting off counterfeiting via its online middle men closely resembles a tactic being weighed by countries around the world to fight content piracy.

The so-called “number of strikes” legislation adopted by the likes of France and Great Britain calls on ISPs to warn customers about infringement that goes on through the connection they pay for, with a final threat of being cut off if the accessing of illegitimate content doesn’t stop. The same complaints are heard against this method of IP enforcement, calling the approach heavy-handed and denying the right to be online to everyone on that connection, in much the same way that blocking a site for hosting counterfeit goods would punish users doing nothing wrong, as well as those buying unlicensed products.

The path ahead is unlikely to be as clear as “block all sites upon any infringement,” but it’s obvious that something has to be done to empower rightsholders to control the way their intellectual property is used.

Bootlegging, piracy and counterfeiting are age-old concerns that have been given a whole new lease of life by being able to access consumers online. The problem has gone global and legislation now needs to rise to the occasion, not only by the countries in which the IP is owned but across international boundaries. There should be no safe haven for criminals intent on living off the creativity of others, and those who facilitate the connection to criminal activity must play some part, even if that doesn’t mean bearing the brunt of enforcement activities.