A new study from Sandvine reports that pirated live TV is an increasing and costly problem for pay-TV providers, resulting in more than $4 billion in lost revenue for Communications Service Providers this year.Read More
Sandvine’s Global Internet Phenomena Spotlight report focusing on paid subscription television piracy services reveals that 6.5 percent of households in North America access pirated live TV services each month.
The illegal subscription services are meant to replicate live television offerings provided by legitimate cable and satellite providers, but at a steep price reduction of about $10 per month.
“Continued adoption of pirate video and television streaming services could lead to increased cord-cutting and create ‘cord-nevers,' people who never sign-up for a standard TV subscription,” Lyn Cantor, CEO of Sandvine, comments in a statement. “This will significantly impact CSPs’ revenue and profitability, undermining the business models that keep them operating.”
According to the report, the vast majority, nearly 95 percent, of TV piracy access comes from purpose-built set-top boxes (STBs), which aim to recreate the experience of using a STB with a traditional cable or satellite television experience.
Kodi software that can run on PCs, smartphones, and other devices is the second most popular platform for TV piracy services. Although the user experience with Kodi isn’t as strong as that with a STB, Sandvine says it’s a convenient option for using a TV piracy service because the software is compatible with many devices already in subscribers’ homes.
Another problem Sandvine identifies is the ‘phantom bandwidth’ issue, whereby purpose-built STBs will stream continuously until they are powered off, even if no one is viewing the transmitted data. This results in users generating over 1 TB of “phantom bandwidth” each month.
In its report, Sandvine points to the August UFC pay-per-view fight between Floyd Mayweather and Connor McGregor as one of the most recent examples of a surge in piracy for live events.
“On one portion of a tier-1 North American fixed access network, at its peak, the pirated UFC and PPV channels for the Mayweather/McGregor fight accounted for almost 80 percent of all pirate TV traffic,” Sandvine says in the report.
The study identifies four types of content driving the growth of pirated TV services: premium television, live sports, news, and international content.
Sandvine says pay-TV providers aren’t the only ones to feel a hit from illegal television services, as content creators of original programming are also hurt.
“If the television revenues of CSPs decline, there is less money for to invest in original programming, which in turn could lead to fewer jobs in the entertainment industry,” Sandvine notes in its study.