Over one million illegal set-top boxes were sold within the UK over the last two years, fuelling intellectual property theft which is costing the UK an estimated £9 billion per year, according to a report released by FACT UK today. Digital piracy has evolved hugely in the last three or four years as technology has developed according to the research, which harms both ad-supported broadcasters and online advertisers.
The report, which drew insight from experts including the Intellectual Property Office (IPO) and the Police Intellectual Property Crime Unit (PIPCU), found that 25% of Brits who view content online download or stream content illegally, down from 30% in 2015. But while fewer people are watching illegal content, pirates are having an easier time distributing it thanks to illegal modifications of legal Kodi software, and an increase in streaming via social media.
Illegal streaming draws revenue away from legitimate broadcasters, with live streams of Premier League games posing a particular problem in the UK; the UK High Court of Justice earlier this year mandated that ISPs must block access illegitimate Premier League streams. Advertisers themselves are also directly affected as piracy is largely funded by advertising, some of which is sold to unsuspecting, respectable brands.
“Many of these ads are placed through ‘adtech platforms’ that automate the process of publishing advertising across the internet,” explains the report, “which means legitimate brands often don’t know exactly where their ads are going but can give the site an impression of respectability”. FACT doesn’t give an estimate of how much advertising revenue is earned by pirates in the UK, but cites a 2013 US study of almost 600 “content theft” website which found they earned $227m in annual advertising.
The UK government has begun to take a harder stance on piracy, partially by extending the penalties for online copyright infringement to match those of physical copyright infringement. As the IPO warns, if piracy is not curbed, it could have a “potentially crippling impact” on creation in broadcast.
