At the end of last month (May 2017) German media company Mediengruppe RTL Deutschland shuttered its pay-TV channel RTL International, having failed to reach necessary subscriber levels despite only launching in January 2016.
It blamed the failure on illegal streaming sites. “First analyses clearly show that a major reason for this [lack of subscribers] is the success of globally acting piracy platforms streaming the broadcast signals of many domestic German channels over the internet illegally and in many cases free-of-charge,” explained Stefan Sporn, SVP International Distribution.
This is among the most drastic but far from the only impact of piracy which is surging in demand and wrecking the global market.
In MENA, over half of viewers in Egypt and in the Gulf Cooperation Council (GCC) admitted to watching pirated video content, according to research carried out by security firm Irdeto.
TV content piracy and illicit downloads caused French rights-holders a $1.47 billion loss in 2016, with 13 million internet users involved in the practice, according to a study from EY consulting.
Pirate torrents remain highly popular, with Pirate Bay having 234.5 million visits in February 2017 alone.
Kodi, a legal set top box platform with over 35 million active users worldwide, is the latest to be hijacked by pirates forcing Sky and BT to take legal action in the UK.
Piracy has become such a big industry that it almost has to be looked at as competition, according to Rob Pinniger, associate director for content security, Virgin Media. Speaking at TV Connect in March, he added that pirate services are reaching scale and can even look like they’re legitimate, charging monthly subscription fees.
“It’s important that the TV industry unites to combat this form of piracy because it loses more than $90billion a year globally in revenue to this and other kinds of content theft,” advises Christopher Schouten, senior product marketing director at content protection and multiscreen systems firm Nagra.
Live sports most at risk
Piracy takes many forms, from key sharing of broadcast services to content sharing of live events and premium VOD titles over the net. A quarter of those surveyed in the GCC by Irdeto and 31 per cent in Egypt stated that they are most interested in watching pirated movies currently shown in cinemas.
The issue is particularly acute around the high value properties of live sports, more and more of which are pouring onto OTT platforms. Live sports were the second most popular illegal streamed content in GCC, with 23 per cent in Egypt.
Research by Sport Industry Group (SIG) into the viewing habits of the younger generation in particular, finds that piracy has become normalised among this generation while the take-up for traditional subscription services is far less than among older viewers.
According to the survey, 54 per cent of millennials have watched illegal streams of live sports and a third admit to regularly watching them, compared to only 4 per cent of over-35s.
Eighteen to 24-year-olds are also half as likely to have subscriptions to pay TV services such as Sky or BT Sport (12-24 per cent).
“Unless we are careful we will have a generation of young people who consider pirated sports content to be the norm,” said SIG chairman Nick Keller. “That’s a significant challenge not just for rights holders but the whole sector from sponsors and athletes to ticketholders.”
Millennials influencing change
Irdeto’s research into MENA also revealed that millennials are among the most likely to illegally consume content. Additionally, 20 per cent of 18-24 year-olds in the GCC and 23 per cent in Egypt pirate more than once a week.
The survey also uncovered an interesting shift that is occurring in the region regarding content consumption habits. While laptops remain the favourite device for consuming illegal video, mobile devices are growing in popularity. Of those surveyed, 33 per cent in the GCC and 35 per cent in Egypt stated that smartphones or tablets are their most frequently used devices to watch pirated video content.
“Millennials are influencing major changes in how consumers watch pirated video content in MENA,” said Khaled Al-Jamal, Irdeto’s director of sales. “This shift to mobile devices to consume pirated video content serves as a signal to the media industry that further innovation is required in MENA to meet consumer demand.”
The innovation he speaks of is a combination of offering affordable content with a comprehensive anti-piracy strategy.
However, there’s no guarantee even the first part of this will work. According to Ampere Analysis, most viewing of illegal streams is among people with low income (and therefore can’t afford to view) and/or who live with others (so that their control of the TV is limited).
“These are demographic issues rather than a fundamental business threat,” says Ampere Research director Richard Broughton. “Making multiplatform streams available is important for operators so that they can reach consumers on different devices.”
In addition, millennials may be more likely than older generations to use online-only services such as Sky’s Now TV but figures are still small, with only 5 per cent taking up the option (according to SIG’s survey). Meanwhile, only 2 per cent of respondents between 18-24 said they sourced their sports entertainment through clips on social media.
The study’s findings follow a crackdown on piracy by the English Premier League with the League determined to preserve its lucrative broadcast rights.
The EPL was granted a court order to stop matches being streamed for free on Kodi boxes. While Kodi itself is a neutral platform, its open-source nature means add-ons can be developed by third parties that make paid content illegally accessible.
This decision meant that the UK’s Internet Service Providers are obliged to shut down the source of illegal streams.
The Federation Against Copyright Theft (Fact) declared that the use of Kodi software to watch pirated streams was becoming an “epidemic” last September.
No silver bullet
According to Irdeto, Kodi boxes are particularly prevalent in the UK. It reported that 11 per cent of UK viewers who admitted to watching pirated streams said they did so via a Kodi box.
There is no silver bullet to resolve the problem. A first step is to secure the stream with encryption (and/or conditional access systems (CAS) in set-top boxes) and add digital rights management (DRM) to authenticate usage.
Video management platform Kaltura, for example, encrypts content as part of the ingest process or on the fly. Then it adds a Universal DRM which is integrated with Google Widevine, PlayReady and Apple Fairplay for content protection which Kaltura says will work regardless of the browser, device or platform being used.
“DRM makes sure that those watching content have relevant access rights,” says Arik Gaisler, Sr. director of product, infrastructure. “This is the approach taken by most pay TV broadcasters. “To overcome DRM it would need to be hacked in a deeper, sophisticated way.”
DRM and CAS do a good job of ensuring that only legitimate viewers can access content through paid services. But once the video is displayed, it is still vulnerable to re-streaming through numerous methods, including camcorder capture and screen-scraping in which data is copied in realtime and re-broadcast as a live stream.
“Traditional access control works up to the point where the customer starts watching the content,” argues Alistair Cameron, European sales director of content protection firm NexGuard. “From that point, all bets are off. Most pirates will pay for a subscription or will buy the pay per view.”
Illegal uploaders can turn a profitable business by selling ads around the site or in some cases selling a subscription service.
A report by the UK’s Digital Citizens Alliance estimated that in 2013, piracy websites generated $227million from advertising.
Education is important
“Some sites are so professional even down to the small print of terms and conditions,” says Cameron.
By embedding an invisible forensic watermark (from firms like NexGuard or Verimatrix) in each video stream, content that is improperly re-distributed can be traced back to its source. “By knowing the source, immediate action can be taken to interrupt the pirate stream while the event is still going,” he says.
As further back-up, monitoring and analytics technologies are required. “HTML-based video players allow you to look at reference urls to get an idea of whether the content is being accessed in unusual places or whether stream volumes are in line with expectations or if you have a leakage,” says Mark Blair, VP, EMEA at video player developer Brightcove.
Once illegality is verified operators have some choices. Sending cease and desist notices works in some cases, legal action in others.
“The problem is that when people do take content down it will respawn quite quickly on a new website,” says Blair.
In the U.S. the Recording Industry Association of America is calling for the country’s Digital Millennium Copyright Act (DMCA) to be updated. Currently, ISPs in the country that remove copyrighted content when alerted by rights holders get legal immunity or so-called safe harbour. But the RIAA and others including the Screen Actors Guild and American Federation of Television and Radio Artists say this process is not sufficient, as the pirated copy reappears instantly, requiring yet another takedown notice.
Instead they want the DMCA to demand a time window of days or even hours within which content must be removed.
The use of automated content identification technology could be a solution to prevent repeated uploading of pirated content. But it’s not so simple. Google, for example, said that, in January, more than 99 per cent of links it was asked to remove — 16.5 million URLs — weren’t even in its search index. YouTube filters content with its Content ID system, and Facebook, Dailymotion, SoundCloud and Twitch use Audible Magic, a copyright compliance service.
Irdeto argues that even all these measures are not enough. It calls for the media industry to educate consumers about the damage that piracy causes the content creation industry.
Its survey in MENA indicates that, of the respondents to its survey, 46 per cent in Egypt and 47 per cent in the GCC would stop or watch less pirated content if they understood the negative impact of piracy on the media industry.
“The amount of respondents who were unsure if it was illegal to download or stream pirated video content is around 33 per cent,” said Al-Jamal. “There is a clear knowledge gap in terms of the legality of piracy. This must be addressed through education on the illegal nature of piracy in order to reduce its impact on the content creation industry in MENA.”