The 21st century brought about a major paradigm shift in the modes of media consumption. The rise of OTT platforms significantly improved the lives of people around the world. However, a major pitfall of this advancing technology exists in Illegal Streaming.
Online piracy refers to the act of unauthorized duplication and usage of copyrighted content which is then sold at lower prices or zero cost. In the world of cinema, online piracy mainly encapsulated peer-to-peer downloads and the usage of torrent websites. Recently, though, illegal video streaming sites turned out to be an impactful player. According to DataProt, more than 80% of online piracy globally lies in unauthorized streaming services.
Over 17% of worldwide users stream content illegally. Worldwide trends suggest that young adults make up a large part of the population involved in piracy. In the UK, ages 16-24 amount to almost a third, 31%, of the population guilty of streaming for free. In the US, the same age bracket is responsible for 71% of pirates. The act is in no way ethical, but is in many ways, convenient. The legal alternatives, despite maximum efforts, are not able to offer the same services. Consider the following scenario- I am an MCU fan, and the only other shows I want to watch are Game of Thrones and Friends.
In this case, I have two options, 1 – to get separate subscriptions for Disney+, Netflix, HBO Max, one for each show, at costs that will quickly drain my minimal disposable income, or 2 – to stream every show, illegally, on a single website, free of cost.
The choice is a no-brainer.
The argument is valid to a certain degree, cost factors coupled with the multitude of platforms and streaming wars contribute to why people pirate. However, this is only the case for a small portion of the consumers participating in such activities.
As mentioned previously, the age group that participates in such activities consists largely of young adults, the majority of whom have limited disposable incomes. It is, therefore, logical to reason that individuals who simply cannot afford OTT platforms and other legal options will resort to easier and simpler alternatives. Moreover, for other age groups as well, studies suggest that the distribution of pirates consists largely of people with low incomes. In a hypothetical world without free streaming websites, to think that those who stream illicitly will switch to becoming paying consumers is naive and unrealistic. In fact, those who free stream could, in the future, lead to paying customers as they become more and more habitual of consuming a certain type of media or experience changes in their financial positions.
It is clear that the solution, for this type of audience, does not lie in the strengthening of laws, or large investments towards the eradication of illegal streaming. The academy award-winning actress, Dame Helen Mirren once said “It’ll be the Internet and piracy that will kill the film. There’s a philosophy that the Internet should be free, but the reality is that piracy will destroy the film industry and film as an art form because it’s expensive to make a movie” (as cited in Walters, 2011).
This, however, is not the case – the industry is not destroyed. In the midst of streaming wars and a global pandemic, the film and TV industry continues to thrive. Many media industry professionals claim that copyright infringement causes the loss of billions of dollars and that piracy considerably reduces movie revenue. If this were to be true, logically, the closing of a major piracy platform would cause an increase in revenue. Yet, when a popular piracy website, Megaupload, closed in 2012, this was not the case. Only the largest films benefitted and the midrange movies were in reality hurt by the absence of piracy.
Piracy also contributes considerably in terms of raising popularity. It allows people to watch media that would otherwise be unseen. The creator of the show Breaking Bad, Vince Gillian even said “Illegal downloading has helped us, certainly, in terms of brand awareness”. To be able to manage the problem, it is imperative to accurately understand the true cost of piracy. Studies relating to this have been questioned as they fail to take into account that every pirate would not alternatively be a paying customer and many do not incorporate the multiplier effect.
An argument commonly cited when referring to piracy is its deeply negative impact on a country’s economy. In many cases, however, the figures tend to be vastly exaggerated. A report from the Government Accountability Office in the US points out that “consumers have extra disposable income from purchasing a less expensive good”, and “the extra disposable income goes back to the U.S. economy, as consumers can spend it on other goods and services”. In other words, the money a pirate would alternatively have spent on a legal alternative does not vanish into thin air, it is put to use in other business sectors and hence, cannot be considered as a loss to the overall economy.
That being said, both pay-TV (cable and satellite television) and OTT platforms still do suffer from the use of illegal content streaming. Unlawful streaming results in no amount of that revenue going to the creators of the media. It still causes serious damage to businesses from content production firms to companies that are driving digital distribution. If the legal ramifications for illegal streaming and piracy were to intensify significantly, it could put an end to piracy, the result, although, is likely to be detrimental to the entertainment industry.
The current landscape in the streaming sector, in reference to piracy, is very similar, although to a lower extent, to the situation faced by the music industry two decades ago. At the time, people consumed music through methods such as using torrent websites, exchanging pen drives, or through large peer-to-peer networks in colleges, all of which were illegal. In the 1990s, music piracy grew up to be a multi-million dollar industry, with none of the proceeds going to the artists. These events paved the way for the arrival of Spotify, which is legal and free of cost and makes revenue through ads. Spotify now possesses the majority of the market share in the music industry.
This example attests to the efficiency of the freemium business model when it comes to a boost in piracy. A similar model could be put to effect in the film and TV industry. People want to watch what they want when they want to, the shift from traditional cable services to OTT platforms is a clear testament to that. This critical purpose is, however, rendered unfulfilled by the presence of numerous legal streaming platforms, each producing a wide array of varying content in the fight for a place at the top.
The most important aspect of any strategy to stop piracy is that it has to be favorable not only to the film and TV industry but to society as a whole. Consequently, an obvious method to decrease illegal streaming while also looking out for the benefit of the community would be putting an end to the streaming wars. This can be accomplished through mergers which could make a variety of content accessible on one platform, reducing the overall cost, and thereby making the switch from illegal to legal platforms attractive. Having content conveniently available, ultimately, is key for putting an effective end to piracy without eliminating its advantages.
Ayushi JoshiWriting Mentorship, 2021
References
https://www.finder.com/uk/illegal-streaming-statisticshttps://www.weforum.org/agenda/2020/07/impact-coronavirus-covid-19-hollywood-global-film-industry-movie-theatres/https://pitjournal.unc.edu/article/economics-video-piracyhttps://fortune.com/2019/02/28/netflix-lost-revenue-password-sharing/https://www.theglobalipcenter.com/wp-content/uploads/2019/06/Digital-Video-Piracy.pdfhttps://www2.deloitte.com/content/dam/Deloitte/global/Images/infographics/technologymediatelecommunications/gx-deloitte-tmt-2018-digital-media-report.pdfhttps://npaw.com/blog/the-real-impact-of-piracy-on-the-video-streaming-industry/https://economictimes.indiatimes.com/definition/piracyhttps://www.tandfonline.com/doi/full/10.1080/15140326.2020.1812477#https://www.wired.com/images_blogs/threatlevel/files/MPAstudy.pdfhttp://www.scielo.org.co/pdf/dyna/v87n215/2346-2183-dyna-87-215-102.pdfhttps://freakonomics.com/2012/01/12/how-much-do-music-and-movie-piracy-really-hurt-the-u-s-economy/https://www.cato.org/blog/how-copyright-industries-con-congressgetRandomImage(‘The-Pirated-Picture’)
Online piracy refers to the act of unauthorized duplication and usage of copyrighted content which is then sold at lower prices or zero cost. In the world of cinema, online piracy mainly encapsulated peer-to-peer downloads and the usage of torrent websites. Recently, though, illegal video streaming sites turned out to be an impactful player. According to DataProt, more than 80% of online piracy globally lies in unauthorized streaming services.
Over 17% of worldwide users stream content illegally. Worldwide trends suggest that young adults make up a large part of the population involved in piracy. In the UK, ages 16-24 amount to almost a third, 31%, of the population guilty of streaming for free. In the US, the same age bracket is responsible for 71% of pirates. The act is in no way ethical, but is in many ways, convenient. The legal alternatives, despite maximum efforts, are not able to offer the same services. Consider the following scenario- I am an MCU fan, and the only other shows I want to watch are Game of Thrones and Friends.
In this case, I have two options, 1 – to get separate subscriptions for Disney+, Netflix, HBO Max, one for each show, at costs that will quickly drain my minimal disposable income, or 2 – to stream every show, illegally, on a single website, free of cost.
The choice is a no-brainer.
The argument is valid to a certain degree, cost factors coupled with the multitude of platforms and streaming wars contribute to why people pirate. However, this is only the case for a small portion of the consumers participating in such activities.
As mentioned previously, the age group that participates in such activities consists largely of young adults, the majority of whom have limited disposable incomes. It is, therefore, logical to reason that individuals who simply cannot afford OTT platforms and other legal options will resort to easier and simpler alternatives. Moreover, for other age groups as well, studies suggest that the distribution of pirates consists largely of people with low incomes. In a hypothetical world without free streaming websites, to think that those who stream illicitly will switch to becoming paying consumers is naive and unrealistic. In fact, those who free stream could, in the future, lead to paying customers as they become more and more habitual of consuming a certain type of media or experience changes in their financial positions.
It is clear that the solution, for this type of audience, does not lie in the strengthening of laws, or large investments towards the eradication of illegal streaming. The academy award-winning actress, Dame Helen Mirren once said “It’ll be the Internet and piracy that will kill the film. There’s a philosophy that the Internet should be free, but the reality is that piracy will destroy the film industry and film as an art form because it’s expensive to make a movie” (as cited in Walters, 2011).
This, however, is not the case – the industry is not destroyed. In the midst of streaming wars and a global pandemic, the film and TV industry continues to thrive. Many media industry professionals claim that copyright infringement causes the loss of billions of dollars and that piracy considerably reduces movie revenue. If this were to be true, logically, the closing of a major piracy platform would cause an increase in revenue. Yet, when a popular piracy website, Megaupload, closed in 2012, this was not the case. Only the largest films benefitted and the midrange movies were in reality hurt by the absence of piracy.
Piracy also contributes considerably in terms of raising popularity. It allows people to watch media that would otherwise be unseen. The creator of the show Breaking Bad, Vince Gillian even said “Illegal downloading has helped us, certainly, in terms of brand awareness”. To be able to manage the problem, it is imperative to accurately understand the true cost of piracy. Studies relating to this have been questioned as they fail to take into account that every pirate would not alternatively be a paying customer and many do not incorporate the multiplier effect.
An argument commonly cited when referring to piracy is its deeply negative impact on a country’s economy. In many cases, however, the figures tend to be vastly exaggerated. A report from the Government Accountability Office in the US points out that “consumers have extra disposable income from purchasing a less expensive good”, and “the extra disposable income goes back to the U.S. economy, as consumers can spend it on other goods and services”. In other words, the money a pirate would alternatively have spent on a legal alternative does not vanish into thin air, it is put to use in other business sectors and hence, cannot be considered as a loss to the overall economy.
That being said, both pay-TV (cable and satellite television) and OTT platforms still do suffer from the use of illegal content streaming. Unlawful streaming results in no amount of that revenue going to the creators of the media. It still causes serious damage to businesses from content production firms to companies that are driving digital distribution. If the legal ramifications for illegal streaming and piracy were to intensify significantly, it could put an end to piracy, the result, although, is likely to be detrimental to the entertainment industry.
The current landscape in the streaming sector, in reference to piracy, is very similar, although to a lower extent, to the situation faced by the music industry two decades ago. At the time, people consumed music through methods such as using torrent websites, exchanging pen drives, or through large peer-to-peer networks in colleges, all of which were illegal. In the 1990s, music piracy grew up to be a multi-million dollar industry, with none of the proceeds going to the artists. These events paved the way for the arrival of Spotify, which is legal and free of cost and makes revenue through ads. Spotify now possesses the majority of the market share in the music industry.
This example attests to the efficiency of the freemium business model when it comes to a boost in piracy. A similar model could be put to effect in the film and TV industry. People want to watch what they want when they want to, the shift from traditional cable services to OTT platforms is a clear testament to that. This critical purpose is, however, rendered unfulfilled by the presence of numerous legal streaming platforms, each producing a wide array of varying content in the fight for a place at the top.
The most important aspect of any strategy to stop piracy is that it has to be favorable not only to the film and TV industry but to society as a whole. Consequently, an obvious method to decrease illegal streaming while also looking out for the benefit of the community would be putting an end to the streaming wars. This can be accomplished through mergers which could make a variety of content accessible on one platform, reducing the overall cost, and thereby making the switch from illegal to legal platforms attractive. Having content conveniently available, ultimately, is key for putting an effective end to piracy without eliminating its advantages.
Ayushi JoshiWriting Mentorship, 2021
References
https://www.finder.com/uk/illegal-streaming-statisticshttps://www.weforum.org/agenda/2020/07/impact-coronavirus-covid-19-hollywood-global-film-industry-movie-theatres/https://pitjournal.unc.edu/article/economics-video-piracyhttps://fortune.com/2019/02/28/netflix-lost-revenue-password-sharing/https://www.theglobalipcenter.com/wp-content/uploads/2019/06/Digital-Video-Piracy.pdfhttps://www2.deloitte.com/content/dam/Deloitte/global/Images/infographics/technologymediatelecommunications/gx-deloitte-tmt-2018-digital-media-report.pdfhttps://npaw.com/blog/the-real-impact-of-piracy-on-the-video-streaming-industry/https://economictimes.indiatimes.com/definition/piracyhttps://www.tandfonline.com/doi/full/10.1080/15140326.2020.1812477#https://www.wired.com/images_blogs/threatlevel/files/MPAstudy.pdfhttp://www.scielo.org.co/pdf/dyna/v87n215/2346-2183-dyna-87-215-102.pdfhttps://freakonomics.com/2012/01/12/how-much-do-music-and-movie-piracy-really-hurt-the-u-s-economy/https://www.cato.org/blog/how-copyright-industries-con-congressgetRandomImage(‘The-Pirated-Picture’)
