According to a new study from the Digital Citizens Alliance, Web sites that trafficked in pirated TV, film and other content make a projected $227 million in annual revenue from advertising, many of those spots for "premium" brands.
The alliance, whose advisory board includes Paul Almeida from the AFL-CIO and Sally Greenberg, executive director of the National Consumers League, contracted with MediaLink on the study, which looked at hundreds of infringing Web sites and found that the largest sites averaged $4.4 million annually in ad revenue, with a profit margin of 80% to over 90%.
“Ad profits are the tip of the iceberg,” said Digital Citizens Alliance executive director Tom Galvin about the report. “These ad-supported rip-off websites are just a small sample of the sites that are profiting from theft, and with the Internet population growing so quickly we need to address this problem immediately. Let’s be clear, the quarter of a billion dollars that these sites make from ads in a year is a huge sum, but it’s only a fraction of the financial losses inflicted on the creative economy and its workers."
Almost 30% of those ads were for premium brands, the study found. It does not suggest those brands are to blame, suggesting they are unwitting participants, but also recommends that their appearance on the sites "should be an incentive for those brand marketers to press agencies, ad networks and exchanges to strengthen current blocking methods and to develop new ones."
“This report confirms that content theft isn’t a cottage industry—it’s big business," said Galvin. "Plain and simple, ad-supported rip-off sites are exploiting the Internet and advertising community to get rich."
DCA does not divulge its funding, beyond identifying them as "private citizens, the health, pharmaceutical and creative industries as well as online safety experts and other communities focused on Internet safety." But its mission is clearly to emphasize the impact of online piracy and safety on consumers.
The study looked at 3Q 2013 and defined an ad-supported infringing site as one that was at least partially ad-supported and with at least 25 or more Digital Millennium Copyright Act takedown requests in the quarter, not including porn sites, "hate" sites, ones with mostly user-generated content or where the content was not primarily TV and movies.
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Contributing editor John Eggerton has been an editor and/or writer on media regulation, legislation and policy for over four decades, including covering the FCC, FTC, Congress, the major media trade associations, and the federal courts. In addition to Multichannel News and Broadcasting + Cable, his work has appeared in Radio World, TV Technology, TV Fax, This Week in Consumer Electronics, Variety and the Encyclopedia Britannica.
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