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NBCU-Backed Study: Online Piracy Continues to Rise Dramatically

Megaupload seizure cited in decline of cyberlocker activity

With Capitol Hill lawmakers once again poised to scrutinize the state of online piracy, a new study commissioned by the entertainment industry shows a rapid increase in Internet infringement in recent years, to almost one-fourth of all bandwidth in North America, Europe and Asia.

The 100-page report from NetNames showed that infringing bandwith use rose by 159.3% between 2010 and 2012, or 23.8% of the total of all Internet use in the three regions. It also showed that 327 million unique Internet users “explicitly sought” infringing content during January 2013, a jump of almost 10% from November, 2011, and representing 25.9% of the total Internet user population in the three regions.

The report —- financed by NBCUniversal — is being cited by showbiz executives and some lawmakers as concrete evidence that despite stepped up enforcement efforts and a series of other measures, piracy is still persistent and even worsening. It was released on Tuesday, the day before a House Judiciary subcommittee hearing on voluntary initiatives that have been implemented between the entertainment industry and other industries, like Internet providers, ad networks and payment processors.

The report showed progress in fighting piracy in one area: Cyberlockers. The seizure of MegaUpload in January, 2012, followed by the closure of other direct download cyberlockers, showed “the ability of a successful antipiracy action to really have a disruptive effect on the ecosystem,” said David Price, director of piracy analysis at NetNames. According to the study, 338 petabytes of data was used for infringing uses on cyberlockers in the three regions in 2012, a decrease of 54.7% decrease from 2010. But the study showed increases in piracy consumption via BitTorrent peer-to-peer sites and video streaming.

Although Price said that the figures show how online piracy can react to events like “closures and seizures,” his report concluded that the “practice of piracy itself morphs to altered circumstances, with the use of video streaming and bittorrent escalating as direct download cyberlockers fell away.”

As of now, standalone anti-piracy legislation still appears unlikely, after the Hollywood lobby suffered a stinging defeat in January 2012 with the failure of the Stop Online Piracy Act, in the face of an unprecedented protest from Internet firms and users. But the dynamics could change, as the House Judiciary Committee has also launched a series of hearings on remaking copyright laws, undoubtedly touching on issues that could have an impact on anti-piracy initiatives.

Price said that the increase in infringing Internet use is going up faster than overall Internet consumption in North America, Asia and Europe. The report showed that video streaming consumption of all kinds rose by 170% between 2010 and 2012, but that consumption of infringing video streams rose by 470%.

Price said that the study did not count consumption of legitimate content on BitTorrent sites, nor did it include pornography.

Even before the report was released, there was some criticism from orgs that have often pushed back against stricter anti-piracy measures. Matt Schruers, vice president of law and policy at the Computer and Communications Industry Assn., expressed doubts in a blog post that the study would distinguish between legitimate and nonlegitimate BitTorrent traffic.

The report was unveiled on Tuesday morning at a Capitol Hill event featuring Sen. Orrin Hatch (R-Utah) and Sen. Sheldon Whitehouse (D-R.I.), cochairs of the International Anti-Piracy Caucus. “Copyright infringement is, as the report’s author states, ‘tenacious and persistent,’ and our efforts must be tenacious and persistent,” Hatch said.

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