How does online piracy of movies and TV series actually work?

From the moment an illegal copy is first made and placed online, Digital Piracy is in play, an illicit business that moves huge sums of money.

Total visits to the 5 most active cyberlocker sites account for 1.83% of total internet traffic worldwide

Piracy has represented an enormous challenge to intellectual property rights ever since internet access became commonplace. Currently, illegal downloads or online views of movies and TV series account for 31.5% of media viewership. An organized hosting and distribution process, comprised of a network of agents that monetize their illegal activity in various ways, enters into action from the moment a pirated copy is first posted online and shared, making piracy a lucrative business.

How do people gain access to pirated material?

The first step in digital piracy is securing an illegal copy of a movie or TV episode. Logically, for illegal sharing to take place, the content must first be obtained. There are 4 methods pirates use to obtain an illegal copy.

In-Theater Recordings. Normally, recordings made directly from a movie theater screen are low in quality, and pick up audible sounds from the audience, such as laughter, or video sequences of spectators getting up, say, to buy popcorn.

DVD or Blu-ray Originals. To make this type of copy, pirates circumvent the digital rights security measures (DRMs) implemented on both DVDs and Blu-ray discs, which allows them to copy their content using digital recording software and/or hardware.

Leaks of Original Copies. This method, perhaps the least common, occurs when courtesy copies are distributed, for example, prior to the Goya or Oscar awards. The illicit file sharers are usually people from within the film industry, who take advantage of their privileged access to copy, and thereby steal, the original material, even before its release.

Streaming Recordings. Through the use of Subscription Video-on-Demand services (SVoD), such as Netflix or WuakiTV, any user can record streamed content using a PC software plugin with hardly any advanced computer knowledge.

Where are the pirated copies hosted on the internet?

After obtaining this initial illegal copy, pirates host the copy themselves or sell it to other users, called uploaders, who are then tasked with uploading it onto the internet via two forms of online hosting:

Piracy Cyberlockers. This is the most popular online hosting method for illegal files, allowing users to share content by directly uploading it for others to download. Uploaders upload the illegal content and receive compensation per download, or collect per-view sales commissions financed by the Premium accounts hosted on the cyberlocker site and sold to users seeking preferential access to such content (higher download speeds, more simultaneous downloads, and so on).There are about 500 active cyberlockers around the world, but the main ones that doing the most harm to the film industry number approximately 120.

P2P (Peer to Peer)/BitTorrent File Transfer. Bit Torrent is a file transfer protocol for exchanging files over an online Peer to Peer network, or what amounts to PC to PC file sharing. This hosting method is based on the storage of data and files on multiple computers interconnected over the BitTorrent protocol.

How is pirated content distributed online?

The illegal content hosted by cyberlockers or P2P networks is not easy to find. The pirated material reaches the end user through intermediaries who are responsible for promoting such content: pirate websites.

These websites are well designed, hosting directories and indexed file listings of the films and TV series they offer. They offer online viewing or downloaded access to illegal audiovisual content, but without directly hosting it, connecting instead to the cyberlocker sites and/or P2P host computers where the file is located. These websites are made known through word of mouth, but also by means of industry-standard SEO search optimization and social media advertising.

Pirated content websites are extremely attractive to their users, who through the use of search engines and social networks can access illegal content in a completely open and unlimited manner. Meanwhile, cybercriminals reap great profits, causing multi-million-dollar industry losses estimated to surpass $1,200 B by 2020.There are 5 ways that pirates can use to monetize their content:

1.Uploader Remuneration: Pirate cyberlockers offer compensation schemes to people who upload copied content in order to encourage such uploads. Web traffic is not the main generator of revenue, rather, the bulk of income stems from the views of the digital content hosted by cyberlockers. The reward system may vary in line with the geographic region where the material is viewed. In the United States, for example, for every 10,000 views of a 40-60-minute video, an uploader can earn about $35. This means that, by uploading 5 movies that generate 10,000 views per day, a pirate can earn over $1,000 dollars per week.

Remuneration table

2. Advertising: Pirate websites include advertising on their pages and charge for it, like any other company. Sometimes, cyberlockers may include advertising within the audiovisual file itself and charge per view, or advertising hit.

3. Advertising Fraud: There are several forms of illicit practices with respect to advertising, such as Pixel Stuffing, which consists of displaying a 1×1 pixel ad in a region of the webpage that users won’t notice, but which is still counted as a legitimate viewing for the advertiser, who then pays for the hit believing that the ad has reached the public.

4. User Data Sales: Through the use of browser cookies, a pirate can gather data on user profiles and sell them to third parties.

5. Membership: Users pay a monthly fee to the pirate cyberlocker in the form of a premium subscription for high speed download of hosted contents.

How is pirated content viewed?

The total visits to the top 5 cyberlockers amounts to nearly 47 million visits per month, which represents 1.83% of the total traffic on the Internet at a global level. However, why does piracy continue growing?

Using and viewing unauthorized content is not only easy, but free and devoid of legal consequences for the user. In addition, the lack of knowledge on the part of many Internet users that the practice itself or the content viewed are illegal makes the offer extremely attractive.

Finding illegal content using the main internet search engines or via social networks is very common among many netizens. Once the user gets used to visiting a site, they become a recurring visitor.

One of the reasons why it is so complicated to do away with piracy owes to the absence of unambiguous and standardized international laws and regulations, something that the various actors involved in piracy take advantage of. Current regulations only determine liability once an offender has been notified that the hosted or shared content is illegal.

Under such a scenario, the most effective and immediate method for curbing the dissemination of illegal copies would be to activate audiovisual content protection by means of technologies that would allow the Internet to be tracked so as to identify these infractions. We at Smart Media Protection, in addition to employing machine learning technology and big data information management on our technological platform, also have agreements with Google and with the main social networks and marketplaces to take down and eliminate pirated content in record time.

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Sources: Piracy observatory and digital content consumption habits 2018_Gfk-La Coalición. Alexa Traffic Rank.