Study: Piracy Could Cost Streaming Services $113 Billion in the Next Five Years; Password-Sharing Rules Could Combat That
Video piracy has always been an issue — even before the internet existed. Bootleg copies of recently-released movies would become available, filmed with dodgy equipment direct from the perpetrator’s local cinema. Of course, nowadays, a variety of software and apps make it much easier to copy movies and upload them to pirating sites. When streaming started to pick up, people had less reason to pirate TV shows or movies — they were readily available for a low monthly fee. Now, as we see video-on-demand subscription prices going up, and people becoming more budget conscious, is it inevitable that we will see a rise in piracy? According to a recent study by Parks Associates, the answer is “yes” and the losses for content owners will stack up to $113 billion by 2027.
“While there is some optimism that emerging countermeasures and best-practices may see piracy begin to plateau by 2027, there is no consensus among stakeholders as to when it may begin to decline,” Parks contributing analyst Steve Hawley said. “This research provides a much-needed understanding of the issues at hand and the technologies and approaches available to fight piracy.”
Parks currently estimates that the entertainment industry lost just shy of $20 million due to piracy last year, but this isn’t just because of people stealing content and sharing it on shady websites for anyone who doesn’t want to pay for the service. The research firm also includes sharing streaming service log-in credentials as a form of piracy.
While companies, especially Netflix, are beginning to institute rules to curb password sharing, Parks forecasts moderate increases in losses due to piracy over the next five years, leading to a cumulative loss of nearly $1.2B.
“The number of households who share account credentials and consume pirated content is rising. People are increasingly looking for new ways to satisfy entertainment needs,” Parks Associates research analyst Sarah Lee said. “Participation in sharing account credentials increased 48% since 2019.”
Netflix has said that 100 million people share their account information for the platform worldwide, which explains why the company is planning to roll out its new sharing rules in nearly every region by the end of the second quarter.
However, the world’s largest streamer isn’t the only platform dealing with privacy. The impact of piracy is multifaceted, having an effect on live TV streaming services such as DIRECTV STREAM and Sling TV and premium services such as HBO Max and Disney+ alike. The report suggests that in the United States, there are currently at least 3,500 online sources offering subscriptions to pirated material at a minimal cost compared to official services. Parks indicates that traffic to those types of sites increased by 31% in 2020; while the pandemic resulted in a boon for services, it also led many people to find less legal alternate routes to streaming content.
When discussing their plans to fight password sharing, Netflix executives often discuss the fact the anyone who is using the service without an official account is a potential customer, because they are already interested in the streamer’s content. The same is true for anyone pirating the titles in other ways. So, if services can find ways to bring these people into the fold, it would have major financial benefits for everyone involved.