Recent announcements from major entertainment studios indicate that 2021 may be the year VOD (Video on Demand) matures into a genuine rival to theatrical moviegoing as some of the biggest slated titles for the coming year will now be co-released in movie theaters and on streaming platforms simultaneously.
Although this shift to parallel distribution may have happened eventually, the pandemic has forced faster adaptation to the reality of less people in movie theaters and more people consuming content at home. The risk for content owners, however, is that viewers will search for free, pirated titles instead of paying for streamed content. Now, more than ever, anti-piracy software for movies and TV, particularly analyst-led solutions that take down infringements and direct online traffic to legitimate sources, can support content owners to secure their places in a changing digital economy.
Without impactful anti-piracy support, the threat from what has been described as a potential “platinum age of piracy”, and a “bonanza” of new content, could well derail legitimate content owners before they can fully explore the new distribution options available to them.
The Changing Strategy of Content Distribution
In response to the pandemic of 2020, studios have already begun investing heavily in new titles for release on VOD and PVOD (Premium Video on Demand) platforms. One of the most notable experiments with PVOD so far was Universal’s co-release of Trolls World Tour at the 48-hour home rental price of $19.99. It has been reported that the studio made an estimated $95 million in rental fees during the first 19 days after release, and, because it enjoys higher profit margins than releasing films theatrically, the experiment may prove to be a long-term success. The Wall Street Journal reported that the Trolls sequel actually made more money for Universal than the original did during its five-month theatrical run.
Now, with the mooted co-release schedules for 2021, it’s clear that major studios are investing more in this distribution method. What’s also clear though is that if paid-for content is to generate the return on investment it requires to offset production and distribution costs, potential subscribers and one-time viewers need to be effectively directed to authorized platforms and away from platforms that encourage the piracy of movies & TV shows.
How Big a Threat Is Digital Piracy for Movies & TV?
Despite the best efforts of content owners to protect their copyright against digital piracy, the increasing speed of the Internet and the availability of online streaming has made online piracy ubiquitous. In 2019, the U.S. Chamber of Commerce’s Global Innovation Policy Center reported its estimate that, annually, there are 26.6 billion illegal views of movies produced by U.S. organizations and 126.7 billion views of TV episodes made by U.S. producers.
In addition to the obvious impact this has on content producers and distributors, it’s estimated that digital piracy is also responsible for the loss of 230,000 American jobs and a GDP reduction of approximately $47.5 billion. As it now constitutes an estimated 80% of online piracy, illegal streaming is the biggest emergent risk in the sector. The threat is particularly pronounced for movies & TV as they can be easily consumed from a stream in single or multiple sittings and do not require downloading. For other pirated material such as computer software or ebooks, users obtain and consume them in different ways, leading to their being accessed through other methods such as P2P networks.
Streaming, Illegal Streaming, and COVID-19
The turn to VOD and PVOD has been made possible by the normalization of services including Netflix, Hulu, and Amazon Prime. In recent years, such channels have become so popular that they have created a new home-based market as an alternative to both moviegoing and subscription television. In fact, Netflix alone has grown so dramatically that it increased its global subscriber base from 70.8 million in 2015 to 167.1 million in 2019.
What we saw in 2020, as a result of COVID-19 lockdowns, was an even greater demand for these services. As movie theaters closed and people turned to in-home screens for entertainment, VOD increased its reach. In the United Kingdom, one study reported that the country’s national lockdown in spring encouraged 12 million new customers to sign up for streaming services, three million of whom had not used a streaming platform previously. In total, this activity meant that streaming services saw a 71% uplift on the previous year.
Predictably, as interest in legitimate content grew, so did piracy. Google Trends data demonstrates that as stay-at-home orders took hold in the spring, worldwide searches for the notorious Pirate Bay website doubled between April 2019 and 2020. The same was found for many of the main illegal streaming sites and for other options for digital pirates.
This simultaneous growth of legal and illegal options highlights one of the main drawbacks of the Internet as a distribution method for legitimate producers; namely, the ability of pirates to provide the same experience as authorized platforms but without the same demand for payment. This will be compounded in 2021 as pirates will no longer even have to wait for content to run through its theatrical release cycle before they are able to obtain high-resolution copies. Another factor that may add to the ability of pirates to capitalize on the new economy is the reality that the profusion of legitimate VOD platforms could overwhelm consumers with options; leading to a mixed system where they are likely to pay for some content but to access some illegally.
Although distribution costs will be lowered for media companies (and their long-term subscription models will undoubtedly reap a strategic reward in coming years), without box office receipts and the attendant revenues generated from the publicity of a theatrical distribution window — from merchandising and other tie-ins — studios need to transfer their pricing structure onto the streaming model. However, because pirates can match this offering without the same price tag, two questions arise.
First, whether consumers will consistently pay the same amount for a different product when a free version is available, and secondly, what steps can be taken to stop digital pirates from disrupting the conversion of potential users into paying viewers.
If You Build It, Will They Come?
The early co-release experiments for titles such as Trolls World Tour are all promising indications that consumers will pay premium and subscription fees for exclusive content, but the picture is complex.
In recent years, studies have repeatedly showed that a percentage of consumers are unwilling to pay market prices and are apathetic about the impact of accessing illegal content. In the U.S., one report found that “39% of Americans Don’t Care That Piracy Hurts Content Creators”, while YouGov polling data in the United Kingdom also found that in 2017, 10% of the population accessed illegal streams on a regular basis — while a further 6% also expected to do this more in the future. These figures have been repeated globally and it appears as though substantial numbers of users will remain unlikely to pay for content.
This scenario isn’t entirely gloomy, however, as evinced by the number of homes who have already chosen to pay a premium price for 2020’s releases so far. The news gets better too though because research also suggests that when presented with “clean” SERPs (Search Engine Result Pages) and authorized options, consumers will choose to pay for content rather than even venturing to click past the first page on Google. According to a 2019 study from Carnegie Mellon University, Pittsburgh:
“Statistically significant differences across groups, strongly suggest that reducing the prominence of pirated content in search results can have a significant impact on a users’ propensity to choose legal or pirated content, and thus is a viable anti-piracy strategy. This result holds in spite of the fact that pirate or legal links are still readily available to users beyond the first page of search results.”
In short, if you make it available and more prominent than pirate alternatives then consumers will pay for content.
Creating a Clean SERP Environment
Traffic from search engines and social media platforms constitute the majority of traffic for most websites, but that’s especially true for digital pirates. As illegal streaming sites and P2P networks can rarely advertise through conventional means, it has become more common for them to engineer search results and direct users through social media. They have become experts at this process though and their infringing results can quickly become the highest-ranking terms for watchable content.
This is where the value of expert anti-piracy software and investigations for movies and TV can pay dividends. Through an SEO-optimized system capable of detecting, reporting, and removing infringing listings rapidly, Corsearch’s anti-piracy solution enforces on thousands of unique domains each month and is trusted by some of the world’s most prestigious media companies.
Corsearch delivers an end-to-end solution capable of finding and taking down copyright-infringing material on pirate torrents, illegal streaming sites, and peer to peer piracy networks. We also support content owners to increase the value of their titles by directing consumers to authorized channels and so maximizing the return on their investments.
With the media economy changing in 2021, taking control of this important space should be part of any proactive approach to digital distribution strategy.
To learn more about the Content Protection Corsearch offers please visit us here and start a conversation today.