The web sites and illegal streaming apps that offer pirated TV shows, movies and other online content take in an estimated $1.34 billion annually in advertising revenue according to a year-long investigation by the Digital Citizens Alliance and White Bullet Solutions Ltd., using the latter's digital ad monitoring system.

Amazon, Facebook and Google are the major brands with the most ads on pirated sites, the investigation found.

Also Read: DCA Seeks Investigation of Terrorist Channel on Pirate TV

Combined with an August 2020 report from Digital Citizens Alliance and content security company NAGRA that found that piracy apps and sites generated over $1 billion in subscriptions, that makes pirated content at least a $2 billion-plus business.

And the groups point out that number undercounts profitability since it does not include the money from partnering with hackers to spread malware, or from the aps that allow for accessing pirated content, or the income from selling personal data or the revenue from selling illicit streaming devices.

The investigation found that the top five of pirate Web sites generated an average of $18.3 million annually in ad revenue, many even as they changed domains and redirects to avoid getting caught or winding up on ad block lists. The total piracy web site annual take was a shade over $1 billion.

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The top five aps generate a total of over a quarter billion dollars annually. While the aps are a "smaller piece" of the piracy ad pie ($258 million), they are growing rapidly because they are more profitable, the investigation concluded.

The list for Fortune 500 companies whose ads appeared on piracy apps was dominated by Amazon, Facebook and Google (in that order), which accounted for 73% of all major brands appearing "frequently" on piracy apps. Vimeo and Start.io rounded out the top five.

The good news for Amazon is that there has been a significant decline in their ads on piracy web sites and apps, the groups said, which "demonstrates that the issue can be addressed when a brand makes it a priority."

The groups also concede that all brands are susceptible to the occasional instance of their ads being on pirate apps or sites, but that many digital advertisers are almost never on such sites.

Taking the profit out of piracy benefits more than legitimate content creators, the groups suggests. "Roughly one in three piracy websites and apps have risky advertising that exposes consumers to fraud and malware," they said, according to research released last February.

DCA said it hopes to spur collective action from government regulators, law enforcement, ad agencies, brands and consumer protection groups.

Also look for a follow-on report from DCA and White Bullet "delving deeper" into how pirate advertising promotes fraud and malware.

Methodology: The investigation was commissioned by DCA, which asked White Bullet to identify the most popular piracy web sites and apps with ads, then identify the brands and calculate the value of the advertising. The survey period was June 2020-May 2021. White Bullet identified 6,194 web sites and 884 apps "deemed suitable" for ad monitoring in the study.

The Digital Citizens Alliance said it wants the U.S. government to investigate how illegal IPTV services are helping Al-Manar, a channel designated a global terrorist entity, to "skirt" a U.S. ban on the service and get into millions of U.S. homes. 

That is one of the offshoots of a report DCA released last week with NAGRA, a company that provides legal online video distribution platform services. 

DCA said that in the course of putting together the report NAGRA monitored hundreds of pirate IPTV services and found that almost half of them included Al-Manar in their channel lists. Al-Manar was labeled a terrorist organization in 2004 and banned from the U.S. and several European countries.

The report, "Money for Nothing," asserts that illegal piracy in IP subscription services is a billion-dollar business, with an estimated 9 million fixed "subs" using pirated IPTV service from some 3,500 storefront websites, social media pates and online marketplaces. The figure grows even more when the sale of pirate streaming devices is included. 

Then there is the extra money pirates get by teaming up with hackers to install malware in the free pirate video apps, the report points out, malware that can lead to  theft of personal data, cryptocurrency mining, adware, ransomware, and botnets launching denial-of-service (DoS) attacks.

Nonprofit Digital Citizens Alliance has produced a slick video to try and educate Washington about the risks of devices--including kodi boxes--and apps that it says facilitate the distribution of pirated content, including potentially exposing kids to porn.

The video warns about the devices and apps exposing computers to malware and ransomware and users to inappropriate content.

It points out that the devices and apps are sometimes sold in retail stores alongside legitimate products.

The rise of illegal streaming devices (ISDs) has made it easier than ever for kids to get access to illicit videos (including child pornography) and unlicensed content which is often loaded with malware that infects our electronic devices," said the group in releasing the video.

“There is nothing on jailbroken equipment to protect your kids from illicit and/or malicious material,” said Digital Citizens Alliance Executive Director Tom Galvin in a statement. "Pornography lives right next to popular movies. There is nothing distinguishing whether the content comes from a licensed provider or if it is stolen and laced with malware. Once that material comes in to your home and infects your devices, it’s not easy to clear it out.”

Galvin wants regulators to join with some attorneys general to create their own videos for TV and social media promoting vigilance in identifying and shunning pirated content.