Even as more and more subscribers are paying for streaming services than for traditional cable, this shift has given rise to a new source of online piracy. A new study has revealed the alarming statistic that now, more than 80% of stolen and shared content is viewed on streaming sites, and overall, approximately 26.6 billion viewings of U.S.-produced movies and 126.7 billion viewings of US-produced TV episodes are digitally pirated each year — mostly from outside the U.S.
These are some of the findings of a new study published by U.S. Chamber of Commerce Global Innovation Policy Center (GIPC), in partnership with NERA Economic Consulting. The study, entitled, Impacts of Digital Video Piracy on the U.S. Economy, says that while the proliferation of streaming services provides consumers with unprecedented choice, content, and convenience, it also presents new challenges for the US movie and television production industry that, in 2017, accounted for approximately $229 billion in domestic revenues and 2.6 million jobs. In recent years, video streaming has grown in popularity with more than 500 licensed online video portals worldwide.
Key findings of the Impacts of Digital Video Piracy on the U.S. Economy study
Let us first look at the key findings of the study. The US content production industry is very big in its size, sweep and contribution to and impact on the US jobs, GDP and economy, but alarmingly, is facing equally huge and dire challenges due to digital piracy.
- The U.S. movie and television production and distribution industry is an important component of the U.S. economy, with revenues in 2017 of about $229 billion. It is also a major job creator, directly supporting 927,000 jobs and 2.6 million in total.
- Video streaming accounts for a large and growing share of content industry revenues—indeed, there are more than 500 licensed online video portals worldwide and as of 2018, more video streaming subscribers than pay-TV subscribers. This growth is threatened by the increase in streaming-enabled piracy, which has overtaken BitTorrent and other download-based technologies as the primary vehicle for digital video piracy.
- Overall, approximately 26.6 billion viewings of U.S.-produced movies and 126.7 billion viewings of U.S.-produced TV episodes are pirated digitally each year, mostly from outside the U.S.
- The impact of digital video piracy on revenues of the U.S. content production sector and related industries depends on the extent to which piracy is assumed to displace legal purchases. Based on a broad range of estimates, we find that digital video piracy conservatively causes lost domestic revenues of at least $29.2 billion and as much as $71.0 billion annually, representing a revenue reduction between 11% and 24%.
- Digital video piracy not only causes lost revenues to the U.S. content production sector, it also results in losses to the U.S. economy of between 230,000 and 560,000 jobs and between $47.5 billion and $115.3 billion in reduced gross domestic product (GDP) each year. While piracy remains a problem in the U.S., our analysis indicates that most of these losses (223,000 to 541,000 jobs and $45.7 billion to $111.1 billion in lost GDP) are due to digital video piracy of U.S. content by non-U.S. residents.
Jeff Eisenach, Managing Director and Co-Chair of NERA’s Communications, Media, and Internet Practice, says, “As the video streaming industry has grown, we have seen a dramatic increase in digital video piracy, especially of U.S.-produced television series and movies. Those illegal views and downloads deprive the content production industry and the broader U.S. economy billions in lost revenue – and hundreds of thousands of jobs – every year.”
“Video streaming, driven by innovative technologies, has transformed the industry, fueled the U.S. economy, and changed how people around the world consume content,” says Jonathan Weinberger, Senior Vice President of the Global Innovation Policy Center. “However, digital piracy has emerged as a serious problem that undermines this growth. The findings from this study highlight the urgent need to coordinate enforcement efforts against illegal streaming and strengthen IP protections both in the U.S. and abroad. GIPC will continue to champion strong IP protections to promote creativity and protect content online.”
Research indicates that more than 80% is attributable to streaming. Illegal streaming is enabled by piracy devices and apps, which have overtaken BitTorrent and other download-based technologies that deliver
The study shows that all of the benefits that streaming brings to the US economy have been artificially capped by digital piracy. Using macroeconomic modeling of digital piracy, the study estimates that global online piracy costs the U.S. economy at least $29.2 billion in lost revenue each year.
While there is no single solution, global collaboration among industries and governments to educate consumers of the dangers of piracy, coupled with the expansion of legal options in cases of infringement, is necessary to curb these negative effects. #StreamingStudy
Mark Olshaker, bestselling author of Mindhunter and the Emmy Award-winning writer of Roman City, says, “For anyone in the creative, inventive, or innovative community, intellectual property laws are the only bulwark that protects our ability to make a living. Theft of intellectual property is the same as theft of money or anything material because it prevents us from earning a living. Moreover, it rewards the copycat or exploiter at the expense of the creator.”