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Study: Cyberlockers Profit On TV, Movie Theft

Combine credit cards and cyberlockers, and you have a recipe for stealing millions of dollars worth of TV shows and movies.

That is according to a new report, "Behind the Cyberlocker Door," from the Digital Citizens Alliance, which promotes stronger content protections on behalf of the creative industries, pharmaceutical companies, and others.

The study defines cyberlockers as "online services that are intentionally architected to support the massive distribution of files among strangers on a worldwide and unrestricted scale." It is cloud storage, but with the distinction that NetNames said it has found negligible infringing content on "legitimate" storage sites, as opposed to cyberlockers.

According to a study of the top 30 direct-download and streaming lockers, total annual revenue was approximately $96.2 million in a mix of ad revenue and subscription fees, which the report labeled a conservative estimate. The most profitable direct-download site made $15.2 million on $17.6 million in revenue, or an 86.1% profit margin, but was outdone by the top streaming site, which banked $8.1 million of its $8.4 million in revenue for a 96.3% margin.

The report asserts that the vast majority of those revenues came from infringing content, based on a "sampling" of the files on those lockers—78.6% infringing content in the 15 direct-download lockers, and 83.7% in streaming lockers.

It said the majority of the balance of files on both lockers were porn, which was likely infringing as well.

Pirated copies of TV shows, movies and games were the most popular stolen content.

All but one of the lockers allowed a credit card to be used to pay for the subscriptions, but only one allowed PayPal, which the report points out has adopted a policy of not doing business with rogue operators.

"There are commercially reasonable, technologically feasible steps can be taken by payment providers such as MasterCard and Visa," the report says, advising them to follow PayPal’s lead.

"This report demonstrates that immense levels of revenue and profit are possible for sites that facilitate and encourage infringement by providing centralized hosting for infringing content," said NetNames.

(Photo via Ervins Strauhmanis's FlickrImage taken on Sept. 19, 2014 and used per Creative Commons 2.0 license. The photo was cropped to fit 3x4 aspect ratio.)