According to a new study from Digital Citizens Alliance and NAGRA, illegal piracy subscription services in the country which steal content from broadcasters and OTT platforms is now worth over US$1 billion.
More alarming is the fact that this US$1 billion tally does not even include the sales of illicit streaming devices (ISDs), which have been found to be their own separate industry worth millions.
The report notes that an estimated 9 million fixed broadband subscribers in the US use a pirate subscription IPTV (PS IPTV) service. These consumers are subscribing to such illegal services via at least 3,5000 US-facing storefront websites, social media pages, and stores within online marketplaces that sell services like these including Facebook.
With operators of PS IPTV services paying nothing for content, profit margins are extremely high ranging from 56% for retailers and up to 85% for wholesalers. According to researcher estimates, the typical wholesaler makes a yearly profit of over US$1,345,200 while the average retailer earns yearly profit of over US$335,000.
The report also brings into question the complicity of legitimate players such as hosting services, payment processors and social media. It said that the “extent to which these legitimate players are aware of their role is a subject of debate”.
Commenting on the findings, Digital Citizens Alliance executive director Tom Galvin said: “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. This report underscores how outdated laws and a lack of focus and enforcement has let thieves, hackers, and scammers create a major criminal enterprise.”
Michael Sharp, director of Data Analytics and Anti-Piracy Services for NAGRA.
“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 “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.”
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