Streaming Piracy Is Now a Billion-Dollar Industry
Tami Abdollah is dot.LA's senior technology reporter. She was previously a national security and cybersecurity reporter for The Associated Press in Washington, D.C. She's been a reporter for the AP in Los Angeles, the Los Angeles Times and for L.A.'s NPR affiliate KPCC. Abdollah spent nearly a year in Iraq as a U.S. government contractor. A native Angeleno, she's traveled the world on $5 a day, taught trad climbing safety classes and is an avid mountaineer. Follow her on Twitter.
- Pirated streaming subscription services, a billion-dollar industry with large profit margins, have been on the rise for the last two years.
- They give users access to premium cable and sports content, still-in-theater films, DVD content, Amazon, Netflix and more, for $10 to $15 a month.
- Why it matters: The convenience comes at a steep cost to the U.S. economy, roughly $29B, including an impact to jobs. The Motion Pictures Association says combating such illicit streaming is their "highest priority."
So long, Napster and Limewire. The next generation of illegal streaming is a growing, billion-dollar industry with big profit margins and its own pirate ecosystem, according to a new report.
The report jointly released this month by the nonprofit Digital Citizens Alliance and NAGRA, a digital TV technology provider, found that such pirated streaming subscription services often mimic the look of legal content providers and are being used by an estimated nine million subscribers in the U.S.
It works like this: Users download an app, click on a link to a media player, or access an already bundled device, for a monthly fee of $10 to $15, gaining access to thousands of channels on-demand videos. They include many movies still showing in theaters, full seasons of TV series and a cornucopia of content from the big streamers.
Customers may not even be aware that their subscription service is fueled by pirated content — though that's debatable. The convenience comes at a hefty cost for those whose jobs depend on the creative industry. A 2019 study estimated that global online piracy has cost the U.S. economy $29.2 billion in lost revenue annually.
An illustration from the report released this month by the nonprofit Digital Citizens Alliance and NAGRA shows a typical pirate streaming service.
"If it's too good to be true, it's too good to be true," said Jan van Voorn, the executive vice president and chief of global content protection for the Motion Picture Assn. "How would it be possible to get all the sports channels, all the cable channels, all the DVD content, Amazon, Netflix, plus what's in theaters? It's something fishy that can't be correct and would never be correct."
Van Voorn said the Motion Pictures Assn. has seen a rise in these new types of pirated subscription services in the last two years. The association has helped create the Alliance for Creativity and Entertaining (ACE) with major creative content companies to combat the challenge of online priracy. ACE has pushed forward with civil and criminal actions, visits to storefronts and takedown actions around the world.
"We have all these services on the radar," van Voorn said. "This is ACE's highest priority and we're addressing it with all the resources we have."
Pirated subscriptions can be purchased through 3,500 storefront websites, on social media pages or online marketplaces like eBay. For the pirates targeting the U.S. market, it's a lucrative business, generating $1 billion in annual revenues in the U.S. with profit margins ranging between 56% to 85%.
The marketplace demand has also led to an ecosystem that includes wholesalers and retailers, who rely on legitimate players like hosting services, payment processors and social media to operate.
The Digital Citizens Alliance/ NAGRA report illustrates the ecosystem pirate services leverage to get their content to (sometimes unsuspecting) subscribers.
These "pirates" also make money by teaming up with hackers who install malware within their free apps. That enables the hackers to steal subscribers' personal and financial data, use their computers to mine cryptocurrency or possibly also harness their systems to create a botnet for cyberattacks, the report found.
NAGRA also discovered that subscribers' internet connections can be turned over to others for illegal activities like accessing child pornography. The illegal streaming subscriptions can also let customers skirt a U.S. ban to watch the channel Al-Manar, a "specially designated global terrorist entity."
"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. "It's time to take this billion-dollar black market seriously."
___Do you have a story that needs to be told? My DMs are open on Twitter @latams. You can also email me at tami(at)dot.la, or ask for my contact on Signal, for more secure and private communications.
- As the Streaming Wars Heat Up, Why Are Consumers Losing Out ... ›
- Hollywood's Piracy Problem is Growing - dot.LA ›
- Movie Piracy Is Up 41% During the Pandemic - dot.LA ›
Subscribe to our newsletter to catch every headline.
Fresh off of closing a $50 million round that valued the company at $300 million, Triller – headquartered in L.A. and with offices in New York, London and Paris – is now seeking $250 million at a valuation of $1.25 billion, according to executive chairman Bobby Sarnevesht. The short-form, user-generated video sharing app's momentum has picked up lately thanks to increased usage during the pandemic and the troubles of TikTok.
Triller executive chairman Bobby Sarnevesht.
Pegasus Tech Ventures chief executive Anis UzzamanAnis Uzzaman
- The LA Dodgers Get Into Food Delivery - dot.LA ›
- Instagram Launches TikTok Competitor, Reels - dot.LA ›
As patients look beyond doctors' offices for health, the $4.5 trillion wellness industry is booming.
Technology and social media has made wellness services from nutritional foods to community clinics more accessible as providers rethink their approach to how they brand themselves.
These are among the forces transforming the booming industry Upfront Ventures Partner Kevin Zhang, Sequoia Consulting Group Wellbeing Director Kaleana Quibell and Remedy Place CEO & founder Dr. Jonathan Leary told dot.LA during a strategy session on Tuesday.
Kevin Zhang, Partner at Upfront Ventures
Kevin Zhang, Partner at Upfront Ventures<p>Kevin Zhang is a Partner at Upfront Ventures, the largest and longest-serving venture capital firm in Los Angeles with $2B in assets under management. Kevin focuses on healthcare, life sciences and interactive media. Prior to Upfront, he worked at The Boston Consulting Group, where he advised on strategy and operations for technology, automotive and healthcare clients in the US and Asia, and Cotiviti, where he built SaaS products for healthcare payors and providers. Kevin studied Biology at Harvard College.</p>
Kaleana Quibell, Wellbeing Director, Sequoia Consulting Group
Kaleana Quibell, Wellbeing Director at Sequoia Consulting Group<p>As the Wellbeing Director at Sequoia Consulting Group, Kaleana is responsible for the needs assessment, vendor selection, and rollout strategy of competitive benefit and wellbeing programs for some of the world's most innovative tech companies. This approach includes a holistic analysis of employees' needs and gaps in care, particularly focusing on the physical, emotional, financial and social wellbeing of the employee and their family.<br><br>Kaleana has over 10 years experience in the Total Rewards sector, with a background in recruiting & onboarding, benefits & human resources, and employee wellbeing program design. With BA degrees in Psychology and Communications, she also earned a MA degree in Organizational Psychology, focusing on workplace engagement and motivation. She was humbled to be recognized as one of EBA's 2017 Most Influential Women in Benefit Advising this year for her role in Sequoia's innovative approach to holistic wellbeing with her clients, and has spoken on various panels and conferences including SXSW.</p>
Dr. Jonathan Leary, CEO & Founder at Remedy Place<p>Over the past 9 years, Dr. Leary has pioneered cutting-edge techniques that optimize the body's natural ability to heal. From day one, his groundbreaking private practice has had a wait list that includes a wide range of celebrities, professional athletes, entrepreneurs, and executives.</p><p>In addition to his private practice, Dr. Leary is a highly sought after global health and wellness speaker who's expertise has been featured in a wide range of prestigious media outlets, from Forbes and ABC to Vogue. He has given corporate wellness talks for Fortune 100 companies, such as Delta Airlines, as well as hosted retreats at the Cannes Film Festival and across the globe.</p>
Rachel Uranga, Senior Reporter at dot.LA
Rachel Uranga, Senior Reporter at dot.LA<p>Rachel Uranga covers the intersection of business, technology and culture. She is a former Mexico-based market correspondent at Reuters and has worked for several Southern California news outlets, including the Los Angeles Business Journal and the Los Angeles Daily News. She has covered everything from IPOs to immigration. Uranga is a graduate of the Columbia School of Journalism and California State University Northridge. A Los Angeles native, she lives with her husband, son and their felines.</p>
- Watch: Its Founders Discuss How Mental Wellness Network Frame ... ›
- Heal Get's $100M in Humana Deal to Extend Telehealth - dot.LA ›