Sign in or Register

Already a member?

Sign in

Or sign in with your account on:

Not a member yet?


How Much Do Brands Pay for Pirated Content Views?

By  +Follow July 3, 2014 6:30AM
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.

Liked What You Read? Join Equities.com as a contributor and get eyeballs on your content FOR FREE!

Results for goog
Ticker Report
29 Jan 15 09:55:34
New Earnings Announcements for January, 29th $GOOG, HA, HAE, HAR, HBI, HFWA, HGG, HLIT, HNNMY, HOG http://t.co/iLtGivBKUP
Stock Trade Alerts
29 Jan 15 09:54:40
$GOOG, $GOOGL, $MM, $GOOG SunTrust: Google Has The Top Ad Exchange In Terms Of 'Inventory… http://t.co/qF0sjYXQVv ~ via @AlertTrade
الشمال الحقيقي
29 Jan 15 09:54:37
$GOOG & $AMZN اعلان الارباح بعد جرس الاغلاق الليله توقعاتي الشخصيه ان اعلاناتهم سلبيه
Tadas Viskanta
29 Jan 15 09:54:11
Thursday links: smart beta BS, "pulling an $AAPL" and the high cost of "free" parking. http://t.co/FqgsQyAVYb $YHOO $AMZN $GOOG $OSTK $BABA
Tech Insider
29 Jan 15 09:53:15
Shyp Brings Its On-Demand Shipping App To Android:  On-demand shipping startup Shyp just made it... http://t.co/dxHYFrG5Jo #Google $GOOG
29 Jan 15 09:49:05
Logging into Option Millionaires LIVE chat NOW! http://t.co/NnbFy7etbX $GOOG $AAPL $VIX #stocks #daytraders http://t.co/gtMZhExEbb
Option Millionaires
29 Jan 15 09:42:07
In a few $GOOGL puts for earnings - maybe this Q will force hands…. $GOOG (or they announce divy/buyback *doubtful)
Tyler Nathan
29 Jan 15 09:37:32
Most analysts are negative on $GOOGL which is why I'm anticipating an earnings surprise to the upside (long) $GOOG
Quantpost Technology
29 Jan 15 09:36:11
$GOOG $GOOGL News: "Robotics Crowd Picks Drones As Top Investment Idea $AMZN …" http://t.co/euvTGZvljR Board view: https://t.co/jOJ3iiFC5A
Seeking Alpha
29 Jan 15 09:36:10
Robotics Crowd Picks Drones As Top Investment Idea http://t.co/lVoOFC0lZy $AMZN $AVAV $GOOG $GPRO $GOOGL $LMT $ESLT $BP $BA $GD $NOC
Investors Hangout
29 Jan 15 09:31:46
Jake13: $GOOG Opinion Click here to find out if $GOOG is http://t.co/Uqo1Nwk95X
Investors Hangout
29 Jan 15 09:31:45
Jake13: $GOOG Opinion Click here to find out if $GOOG is http://t.co/ovmNV678wM
29 Jan 15 09:29:31
Check out our alert track record here... http://t.co/BdiZMRYWH1. Sign up is free. See you soon! $TINO $MSFT $LNKD $GOOG $FB
Rosner Stocks
29 Jan 15 09:27:18
$HI Recent News Updated Thursday, January 29, 2015 11:59:26 AM $GDXJ $XLB $GOOG $AMZN http://t.co/J9ksvreNKY
29 Jan 15 09:25:15
Jake13: Xtremepicks Alerts: $GOOG Opinion Click here to find out if $GOOG is http://t.co/l59NQBdawO
29 Jan 15 09:20:08
$GOOG Opinion Click here to find out if $GOOG is a buy hold or sell. Watching these stocks. $CURE $ACT $MLNX $ http://t.co/8Rd95Y48AZ
RED Option
29 Jan 15 09:18:48
$AMZN at $304-Options pricing in $21 move (7%) into earnings $GOOG at $503 -Options pricing in $20 move (4%) Hmmm...STAY #RISKDefined ^TW
29 Jan 15 09:17:10
Er, what other platform would users be coming from? BB10? lol // http://t.co/h96HZgjSdj $AAPL $GOOG
Lauren Holmes
29 Jan 15 09:17:02
$AAPL $GOOG do you follow what top hedge funds are doing? We certainly do. Check here http://t.co/VrsGMCgPOC
29 Jan 15 09:13:19
Why Investors Should Be More Concerned About Google's Outlook Than Its Quarterly Numbers: La... http://t.co/TrdUCui0NK $goog $googl
Real Bearded Men
29 Jan 15 09:12:09
#coolshirt #beard #Facialhair $twtr $ aapl $ua $mjna $hemp $f $goog $grpn $fnma $c $twc @Teespring @cnn... http://t.co/kjI1IrZVva
Quantpost Technology
29 Jan 15 09:10:11
$GOOG $GOOGL News: "Why Investors Should Be More Concerned About Google's…" http://t.co/OXJUcMJk4J Board view: https://t.co/jOJ3iiFC5A
29 Jan 15 09:10:08
Why Investors Should Be More Concerned About Google's Outlook Than Its Quarter $GOOG $GOOGL http://t.co/PVQJ3IZytQ http://t.co/zCHzXJ8Zqx
29 Jan 15 09:05:56
Join me on tsū, is sharing social revenues with all of us. http://t.co/xycMWeldhM $LNKD $AAPL $GOOGL $GOOG $FB $YHOO http://t.co/T0h2RBx4p0
Stock Wire
29 Jan 15 09:05:34
Google Inc. (GOOGL) Traders Gamble On an Earnings Flop $GOOG http://t.co/THJs40SW3i
Bidness Etc
29 Jan 15 09:03:32
What To Look For In Google Fourth-Quarter Earnings Today http://t.co/WIYkTextHj $GOOG http://t.co/umGByjhEX8
Class Actions News
29 Jan 15 09:03:00
#google #android sued re antitrust violations. #samsung #technews #app #antitrust $GOOG http://t.co/pgtVN194Kg
Stocks News&Markets
29 Jan 15 09:02:02
$GOOG - MARKET SNAPSHOT: U.S. Stocks Aimless As Mixed Earnings Offer Little Boost http://t.co/1IqmeniIB4
Live Stock News
29 Jan 15 09:01:48
$GOOG - MARKET SNAPSHOT: U.S. Stocks Aimless As Mixed Earnings Offer Little Boost http://t.co/BF1WoFDamN
Drew Cohee
29 Jan 15 09:01:17
TD Ameritrade Chief Strategist Sees Potential 4% Move In Google Shares $FB $GOOG $GOOGL http://t.co/nSJ8L57j54 via @benzinga
Tyler Nathan
29 Jan 15 09:01:07
Interesting to see $V and $GOOGL / $GOOG sell off past week into their earnings reports today. Long both
Solo traders
29 Jan 15 09:00:57
$GOOG - MARKET SNAPSHOT: U.S. Stocks Aimless As Mixed Earnings Offer Little Boost http://t.co/m5rSCcMkPI
john smith
29 Jan 15 09:00:45
$GOOG - MARKET SNAPSHOT: U.S. Stocks Aimless As Mixed Earnings Offer Little Boost http://t.co/folXUJbYkV
29 Jan 15 09:00:09
Learn stock technical analysis and charting. http://t.co/STnJTqyeL6 $AAPL $GOOG $JRJC $LIVE $INTC $TWTR http://t.co/xPtMZcjeYl
29 Jan 15 08:56:30
$GOOG Google Inc. (GOOGL) Traders Gamble On an Earnings Flop: Google Inc. (GOOGL) Traders Gamble On an Earnin... http://t.co/kjELIAWsJv
The Stock Professor
29 Jan 15 08:56:15
This is the gift of choice among wealthy Chinese: [at CNBC] - In the wake of China's crac... http://t.co/hMMfSIQOeW $AAPL $GOOG $PCLN $K
29 Jan 15 08:51:06
$MLNX Mellanox Technologies (MLNX) 44.36 +0.98 (+2.26%) $GOOG $ZLTQ $TASR http://t.co/WBBSK4mplI
29 Jan 15 08:49:00
Google's Whisper Number Shows Investors Lacking Confidence $GOOGL $GOOG http://t.co/WEesbTioes #GOOGL
Techno Terrorist
29 Jan 15 08:48:36
$GOOGL $GOOG News: "Google's Whisper Number Shows Investors Lacking… http://t.co/mYaNU0l7Nd #TechnoTerrorist http://t.co/dqPOybK529
Matthew G. Lawrence
29 Jan 15 08:47:53
No they dont MT @Benzinga: Facebook Has Competition From Amazon $AMZN $FB $GOOG http://t.co/EzljHqs3R8 @laurabsaid http://t.co/LqjZjSVux9
Quantpost Technology
29 Jan 15 08:47:47
$GOOGL $GOOG News: "Google's Whisper Number Shows Investors Lacking Confidence…" http://t.co/A6r03mkuxp Board view: https://t.co/C9ZUmHbQzL
Seeking Alpha
29 Jan 15 08:47:46
Google's Whisper Number Shows Investors Lacking Confidence http://t.co/5d7FRODTba $GOOGL $GOOG
29 Jan 15 08:47:44
Google has 4.5/5 stars on Vetr going into their earnings report https://t.co/LiHnYeICa9 $GOOG
John B. Case
29 Jan 15 08:45:59
@ymscapital @jimcramer My choice would be David Rosenblatt who worked at $GOOG.
Quantpost Technology
29 Jan 15 08:45:57
$FB $GOOG News: "Facebook Has New Competition From Amazon $AMZN $FB $GOOG …" http://t.co/ZIkV2Sm8zj Board view: https://t.co/WGBEu6AsHm
Quantpost Service
29 Jan 15 08:45:57
$AMZN News: "Facebook Has New Competition From Amazon $AMZN $FB $GOOG …" http://t.co/LzInGRbKNw Board view: https://t.co/dDf5fDn7Ez
29 Jan 15 08:45:55
Facebook Has New Competition From Amazon $AMZN $FB $GOOG http://t.co/rs0tUwnRMg @laurabsaid http://t.co/cGYnrSZbQu
Scott Ari Shaw
29 Jan 15 08:40:05
@TheStreet $fb next $goog and with hindsight 20/20, if you own $FB buy more, if u don't own then buy, and if your short? #findanewcareer
steven cavaluzzo
29 Jan 15 08:40:03
@karenfinerman your picks have done me well. Sticking with $GOOG. @BABA too?
29 Jan 15 08:36:06
$GOOG $GOOGL $PJC: Google Inc Earnings On Tap: Analysts Downgrade Pre-Print: http://t.co/p2JeR6eN6H
By  +Follow July 3, 2014 6:30AM



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.