Piracy has exploded alongside OTT reflecting a shift away from slow-to-download and risky .mp4 files to free internet streaming. The quality of pirated content has risen dramatically with instant access to new film releases, TV series and live sports accessed on illicit streaming devices.
Piracy has exploded alongside OTT reflecting a shift away from slow-to-download and risky .mp4 files to free internet streaming. The quality of pirated content has risen dramatically with instant access to new film releases, TV series and live sports accessed on illicit streaming devices. Perhaps most notorious is Kodi, the free and open-source media player, that is popular for its third party plug-ins to facilitate unauthorized access to copyrighted media content, as well as boxes sold pre-loaded with add-ons. All of this has had a big impact on the level of pirated streaming media today. When measuring total web traffic to 14,000 of the biggest piracy websites, 73% were for streaming content sites while only 17% were to torrent sites1.
Location piracy is also on the rise involving a virtual private network (VPN) or a fake location app to access content for free and is also causing a loss of revenue for broadcasters. The mix of software, such as VPNs or DNS masking, along with hardware, such as Kodi boxes and Roku, has created an authentication nightmare.
For pay TV providers globally, online streaming, peer-to-peer downloads and IPTV piracy via illicit streaming devices are the forms most affecting providers globally. The impact is most felt in Latin America and Asia Pacific.
Many of those who are most impacted by piracy have little visibility into the damage being done as it’s impossible to measure, unlike torrents, which leave a trail to follow in terms of number of downloads (and revenue loss). However, signal piracy and hardware piracy can be estimated at the household level with 15% of households in Latin America engaging in illegal pay TV services and 14% in Asia Pacific. In North America, 9% of households pirate content and in EMEA, 7% pirate content. If these households subscribed to legal services, $28 billion in revenues could be realized. However, if the pay TV industry serviced 1 in 4 of those pirating content, which is a conservative approach, the losses would be between $6-$8 billion according to ABI Research.
There are steps that pay TV providers can take to protect revenue streams including taking steps to protect content while minimizing overhead. One proven method of protecting valuable content against rampant piracy is digital rights management (DRM). Operators are no longer adopting DRM because they are forced to do so, but rather because it protects their content from piracy, especially during a time when their services are being threatened by competing OTT services. DRM is especially important as rights-holders and broadcasters are seeing viewers circumvent territorial licensing policies and as millions of international customers gain unauthorized access to content licensed in the United States.
One hurdle to DRM is the total cost of ownership which includes capital expenditure and operational expenditure. There is a trifecta of overhead costs to contend with for content owners as the value of content continues to rise, and more hackers attempt to access this content – added to the recurring expense of more devices coming into the market, plus growth in HD and 4K markets. Due to the nature of digital rights, the access controls must be updated frequently, requiring in-house security infrastructure and R&D resources. For instance, nearly 2.5 billion devices shipped in 2016 across nine device types with various chipsets and platforms, browsers and application interfaces. Meanwhile, a high-quality user experience is expected for subscriber retention. According to Frost & Sullivan research, the average cost of porting a secure player to a new platform ranges from $100,000 to $250,000 with a requirement that services support between 10-12 devices – which must also be supported by browsers or apps on yet another 40 devices14. The investment required outprices almost all SMBs and most enterprises due to the complexity of the ecosystem.
Content protection technologies and services enable a trusted environment for content companies to distribute their content. While content protection for digital media is a mature technology, protecting the billions of pieces of content distributed to millions of devices daily is a constant challenge. The Intertrust ExpressPlay™ cloud DRM system provides complete, end-to-end content protection and is the only multi-DRM technology available across all popular platforms and formats.
The ExpressPlay suite also offers a disruptive card-less Conditional Access System (CAS) that uses open-standard Marlin DRM to enable broadcasters and network operators to deliver content.
Intertrust How to Revive the Pay TV Market White Paper 2018