More Than Just a ‘Cottage Industry’, Content Theft Sites Make Millions from Advertisingon February 18, 2014 at 5:39 pm
A new report from the Digital Citizens Alliance (DCA) shows just how much money content theft sites are making from ill-gotten advertising revenue.
‘Good Money Gone Bad: Digital Thieves and the Hijacking of the Online Ad Business’ estimates that the figure is as high as $227 million, all gathered from content created by others.
Whether music, movies, or many other forms of original creation, these content theft sites simply take what isn’t their own, make it available across the web and attract vast numbers of visitors seeking illegal access. This traffic generates page views and valuable impressions for on-page ads, which in turn makes money for the site owner. Very simple, very effective and, in theory, very illegal.
The problem is, most people consider this a minor aspect of the fight against piracy. It’s assumed that the site owners are simply misguided, or ignorant of the law, and will be dealt with eventually. The reality is that most of the major file-sharing sites, and even many that are minor players, have full knowledge of what they’re doing and are making significant sums doing it.
On a call to discuss the report’s findings, Adam Benson of DCA and Mark Berns of MediaLink – the firm that DCA commissioned to conduct this research – explained just how shocking their results are. Benson underlined that profit margins for content theft sites range from 80-94% because the operation requires so little investment and the barriers of entry are so low.
While the largest site made an average of $4.4 million annually, the largest BitTorrent portal clocked in at an enormous $6 million in revenue. Even the “small” theft sites were able to achieve six figure sums from the practice, emphasizing just how pervasive (and attractive to thieves) it is.
“Bottom line,” explains Benson, “this is a low risk, high return business with shocking margins.”
Sandra Aistars of the Copyright Alliance neatly sums up the challenge posed by this report:
“We hope that armed with this important research search engines, brands and payment processors will double down their efforts to avoid supporting infringing sites. By lending sites like those studied by MediaLink an air of legitimacy through advertising and payment services, legitimate companies are doing the Internet ecosystem a disservice.”
The report shows us the size of the problem, now it’s up to those in the relevant industries to take note and repaint the picture to a brighter color for creators.