Global Internet Phenomena Spotlight: Video Piracy in North America

One of our more controversial spotlights was on the current video piracy situation in Canada. To provide further insight on the changing face of live video piracy, we are revisiting video piracy in this report.

The general awareness worldwide of the popularity and prevalence of video and television piracy around the world has been rising.  A quick search reveals some interesting headlines:

• A recent study by broadband TV news found that 15% of Singaporean consumers view pirated TV.  [read more]
• Thailand pay-TV suffering massive piracy [read more]
• Scoop: AT&T to cut off some customers' service in piracy crackdown [read more]
• Dish Awarded $90M in Video Piracy Case [read more]

Based on Sandvine’s data and in-depth analysis over the past several years, this should come as little surprise.

With the rise in popularity and prevalence of video and television piracy, network operators who license or produce video content stand to lose enormous amounts of revenue. Content is being stolen, but because subscribers are paying to pirate these services in some of these instances, money is being diverted away from the actual content creators or rights holders who might otherwise benefit from this revenue. With our extensive experience in the field of network intelligence, Sandvine has been keeping pace with real network data that exposes the true extent and impact of video piracy.

Case Study: North America 

One of the very first things we at Sandvine get challenged on when reporting on the video piracy is, "Your metrics and stats are great, but how do I know it is statistically significant?" At Sandvine we understand that metrics and statistics on video piracy are only valuable if they provide a clear enough view to determine statistical significance. To be sure that Sandvine’s data is representative of what is actually happening at a macro level (in terms of North American Internet usage), we employed the following methodology:

• Data gathered from 16 States/Provinces (varying locations in the US/Canada)
• Total Market Population: 19.3 Million (of regional locations)
• Study coverage included 7% of the total market population, with direct observation
• Observation period covering 30 days 

Taking these factors into consideration, this was the largest study of its kind directly measuring real network data on digital video piracy.  

The study showed that approximately 5.5% of North American households access pirated live television services.  With such a comprehensive study, the demographics become very important - i.e. location, location, location! There is a huge variability in the demographics of those using pirated video services from region to region. Even sites that are geographically close to each other reveal very differing behaviors among users.

Previously, Sandvine reported that 6.5% of North America households are streaming illegal IPTV services. So, is piracy slowing down? The answer is a definite no, as the numbers are still within the margin of error from a statistics perspective, and show specific sampling bias tendencies. Specifically, the previous study was in an urban area, and the data below shows that that usage has actually grown.

The current study encompasses a larger variety of subscribers and variety of demographics, sites, and regions than previous studies. Of particular interest in terms of demographics, there is a distinct difference between piracy in major urban centers and more sparsely populated or rural areas. The results are not surprising; 7.3% of households in urban centers are accessing pirated content, which indicates growth compared to the previously reported video piracy numbers.

North America households accessing pirated live television services

The data revealed by Sandvine’s study clearly reveals a correlation between population, regional demographics, and rates of video piracy. The results posted in the report should also be considered a floor and not a ceiling because our data specifically focuses on IPTV fraud (e.g., Kodi boxes) and does not capture all video piracy conducted from a traditional web browser. It is very likely that many households are engaged in both forms of video piracy.

A fully loaded Kodi ecosystem and subscription television piracy are no longer emergent threats; they are already having a significant effect on revenue streams of network operators. By being able to accurately identify where revenue leakage is occurring, Sandvine can continue to support operators in developing effective strategies to counter the growing trend of video piracy.