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Piracy Set to Cost Streaming Players More Than $50 Billion, Study Says

The cost of piracy to Netflix, Amazon and their streaming peers will top $50 billion between 2016 and 2022, according to new research released Monday.

Digital TV Research measured the impact of piracy on the streaming services across 138 countries, and across TV and movie output. It projected lost subscription and ad revenue totaling $52 billion between 2016 and 2022. The figure is for the streaming services only and does not account for losses sustained by traditional cable and satellite pay-TV players.

One silver lining for the streamers is that the gap between legitimate revenues from their services and piracy is widening, whereas only a few years ago the piracy number eclipsed the cash coming in from subscriptions and ads, the study says. In 2016, revenues from legitimate streaming services totaled $37 billion versus the $26.7 billion lost to piracy. Next year the totals will be $55.5 billion and $37.4 billion, respectively.

Not everyone pirating content would necessarily sign up for a legitimate service if their illegal access to content were curtailed, but the sums involved make sobering reading for SVOD and AVOD services. In June, Netflix and Amazon were announced among the members of a new anti-online piracy industry coalition, the Alliance for Creativity and Entertainment.

Figures for each individual player are hard to come by, but Amazon’s unscripted hit “The Grand Tour” has been described as one of the most pirated U.K.-originated shows ever.

“Piracy will never be eradicated,” said Simon Murray, principal analyst at Digital TV Research. “However, it is not all bad news. Piracy growth rates will decelerate as more effective government action is taken and as the benefits of legal choices become more apparent.”

He added: “Legitimate revenues from OTT TV episodes and movie overtook online piracy losses as far back as 2013. The gap between the two measures is widening.”

By region, Asia Pacific will lose the most from online piracy from 2018, taking over from North America. But by country, the U.S. will suffer the biggest piracy losses, ahead of China, a situation not expected to change over the next five years.

Brazil, India, the U.K., South Korea, and Mexico are other piracy hot spots.

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