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.
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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.
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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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