Wednesday, May 27, 2015

Ad-Supported Piracy Remains a Serious Problem

A new report, entitled “Good Money Still Gone Bad,” was released on May 19, 2015, by the Digital Citizens Alliance (DCA). The report depicts the size and scope of ad-supported piracy and follows up on a DCA report entitled “Good Money Gone Bad” that was released in February 2014.

According to the new DCA report:

  • In 2014, websites generated an estimated $209 million in aggregate annual revenue from advertising illegal content.
  • In a sample of 589 websites, there were 131 recognizable brands whose ads appeared. This is up from 89 brands in 2013.
  • One-third of the websites included links that could potentially infect users’ devices with viruses or other malware.
  • Video streaming websites containing illegal content grew 40 percent from 2013 to 2014.

This report chronicles a serious problem that continues to plague the digital world: As the DCA puts it: “Ad revenue is the oxygen that allows content theft to breathe.” And considering that 88 percent of the most popular content theft websites in Europe rely heavily or solely on ad revenue, it should be inferred that efforts to decrease ad-supported piracy ultimately would put a large dent in the scope of online piracy as a whole.

While the problem is still very large, perhaps an optimist might suggest that a decrease in illegal ad revenue from $227 million in 2013 to $209 million in 2014 is a step in the right direction. This decrease may be attributable to several voluntary initiatives which help to fight online piracy and intellectual property infringements. Brand Integrity Program Against Piracy,, and Rightscorp have emerged to aid consumers in finding legal content and in raising awareness about websites and enterprises that violate intellectual property rights.

Strong enforcement of IP rights is important for ensuring that content providers, artists, innovators, and marketers can earn a return on their creative works and the labor that makes such works possible. According to an International Intellectual Property Alliance report, in 2014 copyright alone contributed $1.1 trillion in additional value to the United States GDP, accounting for 6.71 percent of the U.S. economy. A March 2012 report from the U.S. Patent and Trademark Office says that IP-intensive industries accounted for about $5.06 trillion in value added in 2010, or about 34.8 percent of the country’s economy. These figures, among many other similar ones, show that the protection of IP rights is key to incentivizing more innovation, investment, and economic growth.

While it is unknown how much of the $209 million in ad revenue would exist through legal transactions, any economic loss from IP theft negatively affects artists, entrepreneurs, and the economy as a whole.