IPTV piracy becomes big business

  • More than 2.7 million advertisements offered by illicit streaming devices
  • Top 100 pirate IPTV sites generate more than 16 million visits per month

IPTV piracy becomes big business

ONCE upon a time, in the 15th and 16th centuries, piracy on high seas was big business. Privateers employed by the British and French monarchies regularly raided Spanish galleons returning from South America with gold. These 'official' pirates were later rewarded with titles by the crown.

Fast forward to today, the indirect descendants of those pirates are enriching themselves by stealing....TV streams. According to new data from Irdeto, content theft by pirates has become a full-fledged business and a formidable competitor to established pay TV operators.

According to the data, today there are more than 2.7 million advertisements on e-commerce websites, including Amazon, eBay and Alibaba for illicit streaming devices. In a true cross-channel effort, these advertisements can also be found on social networks, including Facebook, Twitter and other prominent social media platforms.

Pirates are becoming more business savvy and expanding their product marketing of illicit streaming devices. Data from SimilarWeb shows that the growth in global traffic resulted in more than 16,460,000 visits per month to the top 100 pirate IPTV supplier websites. The US and UK led all countries with more than 3.7 million and one million site visits per month, respectively.

Typically, consumer choice comes down to content, value and convenience when selecting a service. Pirates exploit those three needs by offering services and devices that rival their legal counterparts.

Without the costs of legally acquiring the rights and content, pirates are able to take valuable market share in the process. According to Irdeto data, a typical pirate supplier offers an average of 174 channels, with some pirate suppliers offering more than 1,000 channels.

This content comes in at an average subscription cost of US$194.40 per year or a staggeringly low $16.20 per month – much lower than the average cost of US cable TV of US$103.10 per month.

In some cases, despite the illegal nature of the offering, these low costs and the compelling content provided sway consumers to choose a pirate device over legal cable, satellite or OTT services.

While some consumers are aware that they are purchasing pirated content, others do not realise that the subscriptions they are purchasing are pirate operations. As pirates have grown and refined their business methods, they are now creating professional websites, technology and services, fooling some consumers into thinking they are purchasing a legal service.

In addition, the top 100 pirate IPTV suppliers add credibility to their offerings by providing legitimate-looking devices powered by Android, Linux, Kodi and Roku.

IPTV piracy becomes big business

Of the top ten channels offered, half were sports-related. This clearly indicates that pirates are listening to their customers and addressing consumer demand by offering more live sports content, including baseball, football/soccer, mixed sporting events, tennis and motorsports.

IPTV piracy becomes big business

Digital News Asia recently interviewed Roger Harvey, Regional Sales Director of Irdeto on this topic.

DNA: Is the rise in content piracy due to restrictive DRM by the channels? Is it simply a case of the pirates offering what the consumers are looking for?

Consumer choice comes down to content, value and convenience when selecting a service. Pirates exploit those three needs by offering services and devices that are designed to rival their legal counterparts.

Pirates are also becoming more business savvy and expanding their product marketing of illicit IP streaming services and devices. In many cases, consumers resort to piracy simply because they do not realise that the site they are accessing or device that they are purchasing is illegal or they simply can’t get the content they wish to view from a legal source.

Alternatively, consumers may feel that the content is too expensive or fragmented over many pay media/ over-the-top (OTT) platforms. Fragmented content offerings will make it difficult for consumers to find the content that they desire to watch in one place and may drive people to access content illegally.

Consumer tastes in entertainment are constantly shifting. And, as the media landscape becomes increasingly fragmented, they have more choice than ever over where to get their content: free to air and pay TV channels, telco IPTV services, pure over the top TV (OTT) players like Netflix, Hulu and Amazon, direct-to-consumer offerings from rights owners like movie studios and sports leagues, and (inevitably) pirate services.

In this fierce fight for eyeballs, consumers have become more selective. They have high expectations and often have subscriptions to multiple services in order to meet their needs. The key to success and growth is to tune-in to the consumers’ demands and earn their loyalty by offering the user experience they desire.

Put simply, operators need to offer consumers the right content, with convenience, and the business model that represents the best value to them. But here is the catch: consumers are diverse in their needs, so getting the user experience “right” for as many consumers as possible means operators must provide lots of choice. Only then can each consumer achieve their ideal combination of content, convenience and value.

DNA: Software piracy has always been lucrative. What makes it different now?

The rise of broadband speeds in any given geography can lead to peer to peer piracy and live streaming piracy over the internet. Specific to piracy of pay TV and OTT content, the real threat facing the industry is the speed at which these pirated offerings adapt and evolve, and how their illegal services are easy to obtain, simple to use, require limited bandwidth and are priced at a very low, affordable price point.

For example, today, OTT piracy only requires as little as 2-3mbps of broadband internet to illegally access hundreds of pirated pay TV channels and movies from almost anywhere in the world in HD or near HD quality.

Pirated devices and services have also become extremely easy and convenient to use, boast slick user interfaces, are widely sold across many leading e-commerce sites and can be confusing for customers in terms of what is real or pirated.

This is evident from Irdeto’s latest piracy data which found that today there are more than 2.7 million advertisements on e-commerce websites, including Amazon, eBay and Alibaba for illicit streaming devices.

DNA: In the PC videogame industry, tamper-resistant software like Denuvo have helped to reduce it. Is this a sign of things to come in the OTT industry?

“Hardening” of security platforms has been around for many years. Irdeto’s Cloakware technology is such an example. Over time, the industry standard DRMs tend to evolve towards stronger security mechanisms such as those associated with hardware “root of trust” but there are always areas where hardening can add further protection and prevent issues such as “jail breaking” of mobile devices.

With both OTT and broadcast distribution working in partnership, it makes sense to adopt an integrated approach to managing content protection for all devices. With a unified security head-end for both broadcast and OTT, operators can maximise operational efficiency and promote consistency.

Irdeto understands that security technologies will come and go as the device and browser market evolves, but operators will always need to manage content protection, entitlements, and user rights. By abstracting these elements from the individual security mechanisms such as DRM or conditional access (CA), operators gain the flexibility to add or remove specific technologies in the future without major integration effort.

Forward-thinking operators are rationalisng operations further, taking advantage of Common Encryption within Mpeg DASH to protect the same stream of content with various DRMs for different consumer platforms. Savings in content delivery network (CDN) costs can be significant.

The addition of VR services is increasing the need to manage security centrally, regardless of the viewing device or distribution path. Operators are already planning how to manage VR, OTT and broadcast services in a coherent and secure way.

DNA: Is there anything that the main OTT players can do to reduce piracy?

Discouraging content theft with a combination of consumer education, technology such as CA, DRM and watermarking and law enforcement is vital to protecting revenue. But pirates aren’t just thieves, they are also operators’ direct competition.

To keep these growing pirate businesses at bay, content owners and operators, including OTT players need to understand the factors that go into consumer choice, including a full picture of piracy and strategies pirates use to grow their businesses.

Content owners and operators need to make sure they are implementing a comprehensive, 360-degree anti-piracy strategy. This includes detection, monitoring, source identification/watermarking, intelligence-gathering, investigations and enforcement. With the right information and a trusted security partner, content owners and operators can prevent piracy while also adapting offerings to more closely match consumer demand.

By identifying where piracy leaks are happening and what content is being pirated, operators can not only mitigate revenue loss, but also increase revenue potential by capitalising on latent demand.

It is also important for consumers to be aware of the consequences of using pirated content and effective legislation is required to ensure that action can be taken against those who flout the rules and regulations.

In essence, when it comes to fighting online piracy, it is important to understand the current industry landscape, the technological environment, the social and legal environments and the motivations for illegal content consumption and distribution. Countermeasures that empower content providers to provide superior services while protecting their high value content can then be deployed with confidence.

 

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