Online piracy of entertainment content keeps soaring

Despite the growth of Netflix, Amazon.com and other legal channels for watching entertainment online, the volume of pirated movies, TV shows, music, books and video games online continues to grow at a rapid pace.

The amount of bandwidth used for copyright infringement in North America, Europe and Asia Pacific has grown nearly 160% from 2010 to 2012, accounting for 24% of total Internet bandwidth, according to a study from NetNames, the British brand protection firm.

At the same time, the number of people engaged in copyright infringement has grown dramatically too. In January2013, 327 million unique users illegally sought copyrighted content, generating 14 billion page views on websites focused on piracy, up 10% from November 2011, according to the report.

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Titled “Sizing the Piracy Universe,” the study was commissioned by NBCUniversal, owned by Comcast Corp., and is a similar to one NetNames (formerly Envisional) conducted in 2011.

“While legitimate services have come along like Netflix, the piracy world hasn’t stood still,” said David Price, director of piracy analysis at NetNames. “People are infringing all kinds of content, including films, television, music and games. Over 300 million people infringed copyright at least once. That’s an enormous number of people. It just shows how embedded this particular activity has become in people’s lives.”

The report examined more than 1,000 websites that enable users to illegally download or stream copyrighted material, generating profits by advertising or charging a subscription fee. In addition to original data collection by NetNames, the report draws on supplemental data from leading networking equipment companies, including Sandvine Inc. and Cisco Systems Inc.

The results underscore the challenges Hollywood studios, music companies and other industries face in their long-standing efforts to combat piracy, which has spread rapidly along with the growth of Internet usage.

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The Motion Picture Assn. of America, which represents the major production companies in Hollywood, mounted an ill-fated effort to crack down on illegal websites through legislation in Congress. But the bills they backed — known as SOPA (Stop Online Piracy Act) and PIPA (Protect IP Act) — died in Congress in 2012 after a massive opposition campaign led by Google Inc., Wikipedia and other Internet giants that viewed the laws as an unwarranted intrusion on Internet freedom.

Payment processors — including PayPal, Visa and American Express — agreed in 2011 to a set of best practices to investigate complaints and stop processing transactions for sites that distribute counterfeit and pirated goods. And last year, Google said it was modifying its search engine to penalize websites suspected of hosting pirated movies, music, video games and other copyrighted material.

But such actions have done little to slow the spread of online piracy, which has accelerated as Internet bandwidth has grown worldwide and as illegal sites improve their customer experience, Price said.

“At the moment it hasn’t had a major effect at all in terms of how easy it is to locate infringed content,” Price said.

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The findings, however, do illustrate the effectiveness of some enforcement action, Price said.

In January 2012, the MegaUpload direct download cyberlocker was closed after an international law enforcement effort. The fallout led to other major direct download cyberlockers also closing or changing their mode of operation.

From November 2011 to January 2013, the number of visitors worldwide to direct download cyberlockers fell 8% to 149 million; and the number of page views dropped 41.0% to 2.3 billion, according to NetNames.

However, so-called BitTorrent websites — those that use a peer-to-peer distribution system — accounted for 7.4 billion page views, up 31% from November 2011. Video-streaming sites generated 4.2 billion pages, up 34% in the same time period.

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