Piracy is an ancient issue. In the media industry, piracy is the unlicensed use of content that is protected by copyright. While there are many benefits to OTT video, a downside is that its “over the top” nature where content travels via the internet (rather than a managed network), gives piracy more opportunity to thrive. OTT operators therefore need heightened awareness of how to manage the threat of piracy. But OTT also offers a promise: with the right legal framework, the available technical solutions could potentially bring video piracy to dramatically lower levels.
Various industry reports highlight that Live content, Sports content and Movie content are the main victims of piracy. Some reports estimated the global media industry lost $60 billion of revenue in 2020, with losses forecast to reach $67 billion in 2023. This impacts jobs as the content producers and pay-TV operators manage costs to offset the lost revenue. Recent press coverage shows the big efforts being made to combat piracy, including Singapore’s StarHub calling an amnesty on illegal set-top boxes, Portugal’s government considering new illegal stream blocking laws to avert the continued tax revenue impacts of piracy, actors asking their audiences to legitimately pay to watch their films, and the European Union taking legal action against member states that have not implemented updated copyright law.
On the one side there are losses, on the other side there are gains. The European Union Intellectual Property Office published a report in 2018 that estimated the revenue generated by illegal video services in the EU to be €1 billion per year. This income was estimated to come from 10% of the total pay-TV user base, or 3.4% of the EU population, engaging in some form of consumption of pirated content.
There is not a simple 1:1 relationship between video piracy and a media business’s lost revenue due to piracy, because it is not true that a consumer would pay for content if it was their only way to access it. Recent results from Malaysia’s anti-piracy efforts showed a 64% decrease versus the year before in the number of consumers accessing pirated services (from 61% of consumers to 22% of consumers). It also showed that of those that stopped, 20% became paying subscribers, while the remaining 80% switched to advertising-supported services.
But the cost of piracy in OTT is not just loss of revenue. More and more there are real costs incurred by operators. The pirated services ride on top of the same infrastructure as the legal services, without the OTT operator’s knowledge or the CDN/ISP operators’ knowledge, until the resource usage has been measured and billed to the OTT operator.
How OTT Encourages Piracy
Piracy thrives when security is weak and distribution is easy. Internet technology helps piracy to thrive for various reasons.
Net neutrality prevents Internet Service Providers (ISPs) from unilaterally blocking streams they perceive to be unlawful. Some countries have given legal authority to internet service providers to do this, but most have not. The legal argument preventing ISPs from unilaterally blocking pirated streams is that rights holders must take legal action against copyright infringement, not intermediate service providers like ISPs, CDNs, and social media and payment platforms. This creates a responsibility that is not always easy, quick or cost-effective to implement. This legal issue is where the industry grapples with quickly averting video piracy.
Digital commerce has opened new routes to market. Physical, pirated DVDs are not easy to sell globally, and physical DVDs are easily seized by authorities. The purely digital form of OTT content completely changes this dynamic. Now, the opportunity to deliver content globally and to easily move content from one storage location to another makes video piracy even more lucrative, encouraging more criminal activity.
And finally, even when a pirate operation is stopped, it can be recreated relatively easily. A new business name and new domain, and the business is ready to access the same technology infrastructure and customer base as before.
The Video Piracy Ecosystem
The ecosystem looks remarkably similar to any legitimate video service, especially from a technology perspective.
The elements shown in green are the innocents or the victims in this ecosystem. On the technology side the devices used for viewing pirated content could equally be used for legitimate content. On the people side the victims are the content owners or licensees, who can sue for copyright infringement.
The elements shown in red are the perpetrators of the crime. These parties, especially the Unlicensed Content Providers and Subscription Wholesalers, are the subject of extensive criminal investigation and prosecution by law enforcement authorities. The cycle of assessment, investigation and prosecution by the rights owners can be continuous and complex. The question “is it worth it?” is central to the rights owners’ decisions about how far they go to address piracy.
The elements shown in orange represent a highly complex legal situation, which is managed differently by different regulatory bodies in different countries. This subject warrants a full explanation, which will be the subject of a separate article.
Security Best Practices
So, is it worth it? The security experts know that battling piracy is multi-faceted and continuous. And D2C streaming is raising the stakes for the content owners to assure their revenue, given their direct relationship with paying consumers instead of a B2B commercial relationship with pay-TV service providers. So, what can be done?
1. Start With The Basics
One of the observations from industry experts is that content security can be treated like home security, which begins with the basics – i.e., lock the doors, close the windows. The equivalent security mechanisms for OTT video streaming start with a DRM solution. DRM “locks” need to be applied at the content source. And because OTT services deliver services to multiple consumer device types, multi-DRM solutions are required.
2. Understand The Security And Piracy Threats
Before you start buying and installing alarms, security cameras, etc. you want to know the value of what you are trying to protect and what the potential weak points are in your house. Similarly, in video piracy, we must assess the security and piracy threat, understand how much content is being pirated, and calculate the cost of piracy to the organization. Anti-piracy investments can then be directed and sized accordingly.
3. Disrupt The Piracy Threats And Security Breaches
Industry security experts are generally approached when content is already being pirated. At this point two things need to happen – stop the hack and stop the distribution. Hacking and piracy communities need to be detected, infiltrated and monitored to establish who is behind the piracy. Pirate sites, platforms, apps, blogs and social media need to be shut down, enforcement notices of trademark and copyright infringements need to be sent, and advertisements for pirate devices, apps and services need to be removed. This requires a multi-disciplinary team of investigators, forensic analysts, legal specialists, security software engineers, and sometimes even law enforcement specialists.
4. Piracy Doesn’t Sleep
OTT providers need to continuously scan the internet to find their pirated content and respond quickly. To find their pirated content, forensic watermarking can be valuable. Forensic watermarking enables OTT operators to quicky detect their pirated content and inform consumers that they are watching pirated content. Watermarking techniques include bitstream modification (not optimal for legacy consumer equipment), A/B Variant watermarking (which has higher costs due to its dual-stream approach) and client-side watermarking (the simplest and most popular method, which must be deployed alongside a robust DRM solution to protect content until it reaches the device where the watermark is applied). Consumer notification will not stop all piracy, but it helps.
Without watermarking, the process of detecting pirated contents will take longer. So when cost is an issue, operators can choose to watermark only the most valuable content.
A particular challenge with watermarking comes from collusion, or the combining of streams. When a number of watermarked streams are combined into one, the existing watermark detection mechanisms no longer work, so a new mechanism must be built. This cat-and-mouse game continues as more streams are combined, and although only the most sophisticated pirates with sufficient funds can play this game, OTT operators need to remain vigilant for new methods that pirates use to avoid detection.
5. Up Your Game
Going back to the home security example, the general rule applies - thieves will break into the easiest target. There are several levels where additional investments can be made.
To stop the hack requires continuing to build different levels of security - a strong implementation of more piracy blockers and deterrents – geoblocking, short session tokens, software security, a differentiated content delivery strategy between App and browser, etc. If the content is highly valuable it is unlikely this will stop sophisticated video pirates, but it may deter enough to be worth it.
To stop the distribution requires shutting down websites or streaming platforms (e.g., CDNs). To do this requires an efficient and cost-effective legal framework for dealing with copyright infringement. At the moment most legal actions against copyright infringement are long and complex, because they focus on suing a legally established business for an illegal action.
Technically, a business that transports a stream – like a CDN or ISP – can block that stream. But they cannot legally do this without correct legal authorization, or else they may in turn be sued. But this is where we find the promise of OTT to dramatically reduce online piracy. If the technical mechanisms to identify an illegal stream are accurate, and the legal authority exists for a CDN or ISP to block a stream, then efficient and cost-effective action can be taken to protect content owners’ copyright and their legitimate revenue.
6. Educate The Consumer And Reduce The Demand For Pirated Content
Consumer education on what constitutes piracy, the impact of piracy, and the risks of engaging in piracy can also be effective. A growing form of piracy is credential sharing, which is largely a customer service challenge for the content providers more than a legal copyright infringement process. A more serious side of credential sharing is when credentials are sold on the black market – either through a database hack or because sharing leads to information falling into the wrong hands. Consumer education and solutions like concurrent stream management can be effective in limiting password sharing. Consumers will be less inclined to share their passwords if they understand the risks they open themselves to and if their viewing experience can be impacted when there are 10 people using their credentials at the same time.
As Shane McCarthy, COO Video Entertainment for Irdeto states: “Piracy is not fought with a silver bullet nor is the war won on a single day. It requires fighting daily battles. For this, an incremental well thought through data-based approach is needed with a long-term partner that will stand with you across every battlefield.”
Can We Stop OTT Piracy In Its Tracks?
OTT’s strength lies in its accessibility. But this is also the weakness that criminals exploit. Video piracy is known to reduce the revenues of content providers and increase bottom-line costs. As OTT grows, the scale of loss could grow significantly.
Battling piracy is multi-faceted – technologically, commercially and legally. The security best practices show what OTT operators can do to protect their business within their own current legal authority. In parallel, there is continued lobbying for legal changes to strengthen copyright law and to give authorization to intermediate platforms like ISPs and CDNs to quickly block illegal streams.
OTT’s direct to consumer streaming model is transformative for many reasons, including mobility, convenience, addressability and new viewing experiences. To the list, we can add that there is the possibility to literally stop piracy in its tracks. The industry should stay focused on implementing the supportive legal frameworks that allow full use of the available technology.
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