A report from the Digital Citizens Alliance and NAGRA claims illegal piracy subscription services in the United States have grown into a billion-dollar industry.
“Money for Nothing” details a sophisticated ecosystem of thousands of retailers and wholesalers are providing pirated services to nine million US households.
The report goes beyond the IPTV-delivered services to examine infrastructure, supply chain, revenues and profit margins, as well as ad-financed pirate IPTV service business models.
“When it comes to piracy, the scope of the risk to consumers, small businesses and others is in direct proportion to the size of the industry, which is why we need to stop the reach and depth of this ecosystem before it grows even bigger,” said Digital Citizens Alliance Executive Director Tom Galvin. “This report underscores how outdated laws and a lack of focus and enforcement has let thieves, hackers, and scammers create a major criminal enterprise.”
An estimated 9 million fixed broadband subscribers in the United States use a
pirate subscription IPTV service. They get these services from at least 3,500 US-facing storefront websites, social media pages, and stores within online marketplaces that sell services.
“Understanding the impact and tactics involved in the business of subscription IPTV piracy outlined in this report is the first step in addressing the evolving fight to protect content, the most valuable asset in the media and entertainment industry,” said Michael Sharp, Director, Data Analytics, Anti-Piracy Services for NAGRA. “We applaud Digital Citizens Alliance for bringing the issue to light as we continue to support content owners and service providers in effectively disrupting pirate activity–through our expertise, our wide range of anti-piracy solutions and the intelligence we have gathered over years of examining piracy ecosystems–to ultimately keep viewers in the legitimate content value chain.”
The report explains that because the providers of these services pay nothing for the programming that makes up their core product, they operate with estimated profit margins that range from 56 percent (“Retailers”) to 85% (“Wholesalers”).
The ecosystem also depends upon legitimate players, including hosting services, payment processors, and social media. The extent to which these legitimate players are aware of their role is a subject of debate.