logo  
Sign in or Register

Already a member?

Sign in

Or sign in with your account on:

Not a member yet?

Register
    

How Much Do Brands Pay for Pirated Content Views?

By  +Follow July 3, 2014 6:30AM
Share:
Tickers Mentioned:

Pirated content, Pirate bay, MegaUpload, Piracy Universe, copyright infringement, VeryCD, BtChina

Despite a growth of legal channels for watching shows online, the volume of pirated content, pirated movies, TV shows, music, books and video games is growing rapidly. Pirated content viewers are largely condemned for stealing, as its assumed they engage in copyright infringement. From a moral standpoint, it’s easy to argue that producing or viewing pirated content is disrespectful to the authors or brands that create it. But financially, do brands really make less money because of pirated content consumption? Morality aside, maybe that's another story. 

Companies and Governments Trying to Uproot Piracy

According to a study called "Sizing the Piracy Universe" from NetNames, both the number of internet users who regularly pirate content and the amount of bandwidth consumed from pirated content increased significantly between 2010 and 2013, and the internet-based infringement continues to grow at a rapid pace. 

Major corporations have made a concerted effort to try to decrease pirated content online. In 2012 Google (GOOG) said that the company was modifying its search engine to penalize websites suspected of posing pirated content. Payment processors like PayPal, Visa and American Express agreed in 2011 to stop processing transactions for sites distributing pirated content.

Many pirated content consumers use cyberlocker, a third-party file sharing service, to download and upload movies and music. In January 2012, the Hong Kong-based MegaUpload was closed and sites associated with Megaupload were shut down by the United State Department of Justice for copyright infringement. From 2011 to 2013, thanks to international law enforcement efforts, the number of cyberlocker use dropped 8%. Worldwide, even countries like China, which is notorious for culture copyright violations, also issued regulations trying to uproot pirated and unauthorized content and shut down several major peer-to-peer file distribution hubs, including VeryCD and BtChina. 

However, in the US, bills like SOPA (Stop Online Piracy Act) and PIPA (Protect IP Act) died in Congress in 2012 after massive opposition (actually led by Google, with help from Wikipedia) in the name of protecting internet freedom. 

For sites like YouTube, a hotbed for users to generate mash-ups (mix of copyright content by fair use) also have a blurred line in copyright infringement. And that's another story in terms of whether the content is pirated or fair use. In addition, BitTorrent websites with its peer-to-peer distribution system still exist, survive and even thrive with never-decreased need for free content. 

Pirates Are Being Punished Severely

There's been several major pirate channels to open up to fill the demand. There’s the above mentioned BitTorrent, and then there's what is probably the most famous, The Pirate Bay. Established in 2001 by a Swedish anti-copyright organization and start web service in 2003, today’s Pirate Bay website provides access to all around the world.

The website was outlawed multiple times, once move the server to Netherland, and has been involved in as well as bring users many lawsuit cases in its history. For example, in 2009, Stockholm district court sentenced four founders of The Pirate Bay to one year in prison each and handed out a total of $3.6 million in fines. In 2006 the US government pressured the Swedish government and threatened to blacklist the Swedes within the World Trade Organization if Sweden did not deal with the website.

Legitimate services, including Netflix (NFLX) and Amazon.com (AMZN) , are certainly affected to some extent by pirated content views. The financial loss results from customers turning to pirate websites for free content. Recently, a 27-year-old New York man was accused of uploading Ultimate Fighting Championship content to The Pirate Bay and Kickass Torrents which were worth more than $32.2 million. The man, Steven Messina, had uploaded 141 UFC presentations to those file-sharing sites under the name of “Secludedly,” and provided a PayPal donation link to keep his business. 

The world seems to be showing little tolerance towards piracy. However, are brands like Netflix, Amazon, and even the UFC losing as much money from piracy as they claim?

Piracy Loss Could Be Converted to Revenue Opportunities 

Despite assumptions about how "bad" piracy can be, some argue that piracy loss can actually convert to revenue opportunities. According to a recent study conducted by Verance Corporation, an estimated 94% of American consumers viewing pirated movies are also buying legitimate copies of content. Namely, most of consumers in the US viewing pirated movies are actually "dual consumers."

The survey identifies six distinct categories of consumers of pirated movies:  "Occasionals" or "dual consumers" who prefer to watch legitimate copies but will view pirated content if possible, and  "Convenience Streamers" who are mostly avid movie viewers with a preference for viewing via streaming. When subscription services fail and pirate channels are available, they will turn to the more convenient option.

There’s more. There’s the "No Big Deals" who see no harm to watch pirated content, but still willing to spend money for theater experience; "Content Enthusiasts" who tend to allocate a portion of their budgets to legitimate movies; "Cost Sensitives" who buy legitimate copies based on moral considerations; and "Library Builders" who collects both legitimate and pirated copies in order to build a collect that can be viewed through multiple devices. 

In all categories, there are no individuals who strictly depend on pirated content and never pay for it. The study found that people "steal" not because they cannot afford legitimate copies, but because pirated content is convenient. 

Although it can be considered immoral to view pirated content, from the perspective of copyright holders, including major and independent studios, content providers and content retailers, sometimes piracy loss actually can be converted to revenue opportunities. 

Even if pirated content is illegal and immoral, it does not mean it translates into brands losing money. In a circuitous way, they might even get revenue opportunities out of this behavior. Then, is this one of the reasons brands turning a blind eye to pirated content consumption? Maybe yes, but don’t say it out loud.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions.


Signup for our daily newsletter and get our best articles emailed right to you!

Results for goog
Boom Doom Economy ♦
27 Feb 15 17:52:21
RT @GoogleInvestor: Google Tests Next Level of Resistance Week +3.8% YTD +6.0% Above 200 Day Avg $GOOGL $GOOG $QQQ $XLK #Android http://t.c…
IH News Desk
27 Feb 15 17:48:18
$CELG Percent Change Updated Friday, February 27, 2015 8:10:58 PM $GDX $IYT $BAA $GOOG http://t.co/OxuCZPcMVj
pretty_darn_tasty
27 Feb 15 17:40:47
RT @UPBOptionMil: Google Options Go Wild Stock moves ~5% options move over 4,000% http://t.co/lBKHciInPE $GOOGL $GOOG
royfberger
27 Feb 15 17:37:10
True balls. $AAPL $GOOG $INTC $MTW $CAT $X $C $CSCO $T $SE $WU $MU $WBA http://t.co/8mR4s08jCl http://t.co/Fg0IZZGNuG
NeoSolomon
27 Feb 15 17:29:36
RT @GoogleInvestor: Google Tests Next Level of Resistance Week +3.8% YTD +6.0% Above 200 Day Avg $GOOGL $GOOG $QQQ $XLK #Android http://t.c…
ManuelGCubedo
27 Feb 15 17:28:59
RT @WSJ: Google will begin allowing developers to pay to promote their apps in its Play store: http://t.co/c6N1XSx358 $GOOG http://t.co/zAO…
Ely Bahiana
27 Feb 15 17:28:43
RT @daily_finance: Why Google wants to wire you with fiber http://t.co/r5acVZxno3 $GOOG
Gatekeepers Media
27 Feb 15 17:27:58
With one billion users a month, YouTube still doesn’t make money $GOOG http://t.co/FvHSnTZhAV via @WSJ#GKMSPOILSU
Houseteam
27 Feb 15 17:27:30
Google's Android Success Paves The Way For Sustained Growth $GOOG http://t.co/O30NBYqjf6
The Stock Professor
27 Feb 15 17:27:03
Apple Loop: Bug Fixes Wait For iOS 9, Apple Trumps Exxon, iPhone Fights Chinese Clone: http://t.co/nso40Dg0gu $AAPL $GOOG $PCLN $K
Stockaholics
27 Feb 15 17:23:04
Our Penny Stock Picks Gained Over 342% In 2 weeks! Get Our Next Alerts Early: http://t.co/iPnInrsUzz $TRX $AAPL $GOOG
Danielle Turner
27 Feb 15 17:19:04
RT @RiskRewardFBN: .@deirdrebolton talks Android wear and the future of #smartwatches w/ $GOOG product manager Jeff Chang @foxbusiness http…
Edmond Lococo 罗孟德
27 Feb 15 17:13:22
New #Google headquarters plan calls for movable buildings under translucent canopies http://t.co/fQhLxkVQrb via @business $GOOG
Stock Hobbit
27 Feb 15 17:07:10
Logging in now to live stock chat http://t.co/ndv5bWOOj4 $GOOG $AAPL $FB $EBAY #options #stocks #daytrading http://t.co/2yw0N8afK6
royfberger
27 Feb 15 17:03:32
$GOOG $SPY $QQQ $MA Friday Focus: Google Calls Go Wild ($GOOG $GOOGL) http://t.co/y6O78jViPC
Clayton R.
27 Feb 15 17:02:54
$GOOG http://t.co/zzGEvirsQD Private Sector Fuels Growth; Student Loan Repayment Should Reflect This http://t.co/eZ7c3nm3Bf
C. Allen
27 Feb 15 17:02:42
$GOOG $AAPL $TWTR Friday Focus: Google Calls Go Wild ($GOOG $GOOGL) http://t.co/ptnln60JeF
Martha Berry
27 Feb 15 16:59:31
Buy Google Stock Invest in $GOOG on eToro http://t.co/CTARQXWVA4 #stocks
Cordoba (IT)
27 Feb 15 16:56:14
RT @daily_finance: Why Google wants to wire you with fiber http://t.co/r5acVZxno3 $GOOG
DailyFinance
27 Feb 15 16:55:11
Why Google wants to wire you with fiber http://t.co/r5acVZxno3 $GOOG
Bradley
27 Feb 15 16:53:08
Helpful video for stock options beginners!! http://t.co/8g4lUZPHEF $GOOG $AAPL $GOOGL $AMZN $FB $FEYE $FXCM http://t.co/XUTEsiACBH
UPBOptionMil
27 Feb 15 16:51:49
Google Options Go Wild Stock moves ~5% options move over 4,000% http://t.co/lBKHciInPE $GOOGL $GOOG
Dan
27 Feb 15 16:51:36
$GOOG OI for maturity 02/27/2015. 550.00 Highest put. 560.00 Highest call. http://t.co/eW8vsb2NP0
Rosner Stocks
27 Feb 15 16:43:42
$KR Stock Message Board Updated Friday, February 27, 2015 6:59:22 PM $FXI $SMH $GOOG $MHYS http://t.co/1BggvSsGrm
Perfor Mance
27 Feb 15 16:36:07
Option Millionaires: uranium-pinto-beans: what a week for $GOOGL $GOOG calls http://t.co/hsUsSG35SE
Protean Wave Energy
27 Feb 15 16:35:13
Both Google and Apple are investing big in clean energy http://t.co/AFJWSZqqPX via @smh #cleanenergy $AAPL $GOOG
Dan
27 Feb 15 16:30:55
$GOOG Max Pain is 542.50 for maturity 02/27/2015. Price = 558.40. http://t.co/Nx4fGWbn0V
Jeremy C. Owens
27 Feb 15 16:29:37
Friday's BizBreak wraps up Google's free-spending week and Apple's patent battles. http://t.co/1usH34rxqZ $AAPL $GOOG
Ignacia Seitz
27 Feb 15 16:24:05
Buy Google Stock Invest in $GOOG on eToro http://t.co/8vu8MWzm9g #stocks
OM_giveaways
27 Feb 15 16:13:12
Learn stock technical analysis and charting. http://t.co/6TAu75F3hy $AAPL $GOOG $JRJC $LIVE $INTC $TWTR http://t.co/RiI4lMsasa
Rich Greenfield
27 Feb 15 16:03:44
RT @WaltBTIG: The company that has more stroke than any @fcc commissioners on editing #NetNeutrality doc has no comment?? $GOOG
LJ Keane
27 Feb 15 16:02:47
$GOOG $GOOGL $AAPL Unusual Option Action – Live Webinar – March 5th 2015 http://t.co/KSZZuSNp5V
12Stocks.com
27 Feb 15 16:02:43
S&P500 #Stocks Trend $MNST $ROST $ADSK $KSS $YUM $FSLR $URBN $XL $DLTR $UHS $GOOGL $GOOG $MO $SJM $MCD $CRM @ http://t.co/RPeaHBZz9y
Clayton R.
27 Feb 15 16:02:13
$GOOG http://t.co/zzGEvirsQD Inside $25 Million 'Nirvana' In Manalpan, Fla. http://t.co/jKdtPUtmjs
12Stocks.com
27 Feb 15 16:02:10
Nasdaq100 #Stocks Trend $MNST $ROST $ADSK $VIP $SBAC $DLTR $GOOGL $GOOG $AVGO $VRSK $EXPD $DTV $ADBE $CHKP @ http://t.co/YdSIjG11yN
Jordhy Ledesma
27 Feb 15 15:59:04
RT @RiskRewardFBN: .@deirdrebolton talks Android wear and the future of #smartwatches w/ $GOOG product manager Jeff Chang @foxbusiness http…
Brad Ascherien
27 Feb 15 15:56:57
RT @RiskRewardFBN: .@deirdrebolton talks Android wear and the future of #smartwatches w/ $GOOG product manager Jeff Chang @foxbusiness http…
Stockaholics
27 Feb 15 15:52:47
Our Penny Stock Picks Gained Over 342% In 2 weeks! Get Our Next Alerts Early: http://t.co/iPnInrsUzz $AMZN $MCOX $GOOG
#HelpYouGetGAINS
27 Feb 15 15:49:31
What can we learn from the mobile wallet revolution? #stocks #ApplePay #GoogleWallet $AAPL $GOOG $EBAY $V $AXP $MA http://t.co/lVtsPQMfGD
Deirdre Bolton
27 Feb 15 15:48:53
RT @RiskRewardFBN: .@deirdrebolton talks Android wear and the future of #smartwatches w/ $GOOG product manager Jeff Chang @foxbusiness http…
PolgarStocks
27 Feb 15 15:45:52
$BABA Reviews Updated Friday, February 27, 2015 6:07:24 PM $GOOG $BIOC $MNST $DRN http://t.co/x6nNxd1Gay
Walt Piecyk
27 Feb 15 15:43:32
The company that has more stroke than any @fcc commissioners on editing #NetNeutrality doc has no comment?? $GOOG
royfberger
27 Feb 15 15:39:08
Logging into Option Millionaires LIVE chat NOW! http://t.co/p8xsJwhCQG $GOOG $AAPL $VIX #stocks #daytraders http://t.co/1QOVFpG5YB
FinSentS NASDAQ
27 Feb 15 15:38:02
$GOOG:US You can Google it, or perhaps now Vurb it #GOOGLE INC http://t.co/ijRK6A5Sfx #NASDAQ
The Stock Professor
27 Feb 15 15:32:19
Your first trade for Monday, March 2: http://t.co/WooEjxFS7d $AAPL $GOOG $PCLN $K
Stockaholics
27 Feb 15 15:31:10
Our Penny Stock Picks Gained Over 342% In 2 weeks! Get Our Next Alerts Early: http://t.co/iPnInrsUzz $ERBB $BBDA $GOOG
AAPL Stock Alerts
27 Feb 15 15:30:04
Do Apple's New iPhones Initiate Peak Android? http://t.co/Ylq9FLSMe1 $BBRY $GOOG $MSFT $GOOGL $AAPL
Peak News ★
27 Feb 15 15:27:40
RT @GoogleInvestor: Google Tests Next Level of Resistance Week +3.8% YTD +6.0% Above 200 Day Avg $GOOGL $GOOG $QQQ $XLK #Android http://t.c…
Bradley
27 Feb 15 15:26:07
What will the $DOW do tomorrow? http://t.co/RGFWb0kA5h $GOOG $AAPL $FB $EBAY #options #stocks #daytrading http://t.co/24szzGNsj3
Matrix Control ‹‹‹
27 Feb 15 15:18:58
RT @GoogleInvestor: Google Tests Next Level of Resistance Week +3.8% YTD +6.0% Above 200 Day Avg $GOOGL $GOOG $QQQ $XLK #Android http://t.c…
				
				
By  +Follow July 3, 2014 6:30AM
Share:

Comments

 

blog comments powered by Disqus

About us

Equities.com is the most advanced interactive online social ecosystem for the financial industry, serving as a resource center and next-generation communication platform that connects self-directed investors with public issuers, market experts, and professional service providers and vendors. Registered members can leverage our exclusive proprietary research tools such as the Small-Cap Stars, which outperformed 90% of all small-cap mutual funds, and robust do-it-yourself E.V.A. research reports. The Equities.com Issuer Dashboard is the ideal tool to communicate and manage investor awareness campaigns to the investment community, as well as to access valuable resources to help your company grow.

Market Data powered by QuoteMedia.
Copyright © QuoteMedia. Data delayed 15 minutes unless otherwise indicated. Terms of Use.