An updated report from the Digital Citizens Alliance (DCA) shows that piracy sites still make a killing from online ad revenue, despite progress against individual perpetrators. Following up on its 2013 study Good Money Gone Bad, the DCA found that such sites are generating $209 million in advertising revenue on the back of unlicensed content.
That’s down slightly from the previous report’s figure of $227 million, but shows a black market that is still strong almost two years on and which provides plenty of incentive for new players to enter.
And what’s happening underneath those headline numbers is all the more concerning.
Even with 44% of the first report’s bad actors biting the dust – that is, being taken down or falling out of the study’s selection criteria – research group MediaLink still found a sample of a similar size to study and revenues that made it past the $200 million mark for the second year running.
“With the churn of sites and removal of some large sites, it is stunning how durable the [revenue] figure is proving to be.”
~Adam Benson, Digital Citizens Alliance
Furthermore, the types of site give pause for thought, as video streaming sites enter the piracy ecosystem in a big way and begin to open up even greater revenue channels for budding pirates. As larger, established sites are taken out, smaller names take their place and provide a new spin on this old yet profitable industry. These new entrants made up only 12 percent of the previous study but in 2014 that figure was up to 21 percent, showing the room for growth and
What this means is that taking out the bad actors is only one part of the anti-piracy fight. The most profitable content theft platforms do need to be removed, but perhaps even more important is tackling the problem at its root. To do that, we need to follow the money, which leads back to another unwilling participant in this equation: big brands.
A sizable chunk of the revenue flowing into these piracy sites’ accounts comes from major brand names, albeit without their intention. Another recent report from Incopro puts the figure as high as 88% of piracy sites receiving the majority of their income from advertising, making it clear that cutting out that flow of funding will be a key part of putting pirates out of business for good.
This is easier said than done. The vast and complex web of space for online ads is managed through several networks and resellers, which makes it tougher to track exactly where legitimate ads end up.
Recognized and trusted brands like Best Buy, Chase, Verizon, and even the New York Times appear in this new report, with digital ads that run alongside all kinds of content. Whether they appear next to stolen songs and movies or other ads that promote pornography, gambling, and other vices that inevitably tarnish a brand by association.
To underline the problem, there are now 131 premium brand advertisers on this follow-up report, up from 89 highlighted in the 2013 data.This comes despite renewed efforts from industry players to curb that presence and gives us a good idea of why so many newer sites have been able to appear and pick up the mantle from their predecessors.
At its most basic level, Good Money Still Gone Bad shows that this form of content theft is bad for everyone except the pirates. Big companies lose brand value and respect by being placed on suspect sites next to suspect content. Creators, of course, lose out because their work is shared for consumption without permission or compensation.
Even those who use these sites to access unlicensed content lose in the long term, as the high incidence of malware threatens device security with each and every visit. The price of watching a movie or buying an album legally online suddenly becomes a lot more attractive when you’re replacing a prized laptop or handling a case of identity theft.
A hint of optimism remains for all stakeholders in the form of new initiatives from the advertising community to weed out bad ads. The TAG program, for example, was introduced out earlier this year and aims to provide a more powerful set of tools for advertisers to assess the level of risk in their ad spend. Described by Mark Berns of MediaLink, the primary researcher behind Good Money Still Gone Bad, as “one of the most aggressive anti-fraud solutions I’ve seen yet,” it’s to be hoped that efforts like this will start to choke off some of the ad money that we can see is the oxygen of so many sites profiting from content theft.