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Study: Piracy Shifts Away From Downloading to Video Streaming

The nature of piracy is shifting significantly to video streaming from file-sharing and downloading, posing potentially more vexing problems for authorities as they try to make a dent in online infringement, according to the results of new report from the Digital Citizens Alliance.

The organization, a nonprofit set up to highlight consumer perils from the trafficking in pirated goods online, will unveil their report in a few weeks, but they were expected to offer some details of their findings at the Digital Entertainment World conference in Century City on Tuesday.

Their preliminary findings showed that between the third quarter of 2013 and the third quarter of 2014, there was a “significant shift” to streaming and away from torrent file-sharing and downloads. According to the group, that poses a problem for enforcement in that it is more difficult to find the sources of video streams that are embedded in sites that traffic in infringing content.

“I think what we are seeing is that as users’ consumption of content changes, the pirates are changing with them,” said Tom Galvin, executive director of the Digital Citizens Alliance. “The shift is alarming, but consistent with consumer habits.”

He said one of the big concerns is that streaming “poses challemges for enforcement because the real time nature makes it more difficult to track.” He added that another problem is the presence of malware on all types of piracy sites, adding the possibility of ID theft in addition to copyright infringement.

Their report, in which the organization commissioned Medialink for research, is a followup to a study from last year that showed that sites that sell infringing movies, music and TV shows advertising reap some $227 million annually from advertising. Nearly 30% of large websites that traffic heavily in infringing movies, TV shows and music carried ads for premium, “blue chip” brands.

The new study found that video streaming accounted from 21% of the revenue for the sample of sites studied, up from 12% the year before.

It found that video streaming was the only segment to generate more revenue than the year before, even with half as many large sites. Aggregate annual revenue was up more than 50%.

One factor, according to Digital Citizens Alliance, is that streaming services may be able to collect higher CPMs from video ads, only adding to the economic lure of piracy, Galvin said.

According to the organization, smaller sites made up 70% of their sample, the same as last year. But they generated 21% of the revenue, a rise from 12% a year earlier.

“When you are streaming there is no transfer of content from one location to another,” says Hemanshu Nigam, founder of SSB Blue, an advisory firm for online safety and security. “It happens in real time and when it is over it disappears. So it is almost as though you set up a movie and it gets streamed, by the time anyone can do anything it is gone and you can move the streaming location to a different server and often to a different hacked server.”

He adds, “This is why it needs to get personal, because you could be running a great game machine that you use to play games online and that is a perfect location to put some streaming content, and now your own hacked computer as a consumer is being used to stream out pirated content. So you are now become a chain in illegal activity.”

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