Unauthorized Blu-ray Ripping ‘Gaining Steam,’ Says Analyst

Unauthorized copying of Blu-ray Disc movies pales in comparison with that of DVDs but is “growing rapidly” and is “going to be a major concern in the next several years for content owners,” Michael Greeson, founding partner of the research firm Diffusion Group, said Tuesday at a Rovi-sponsored presentation in New York about infringement. Even with the rise of unauthorized sharing over peer-to-peer services, he said, DVD copying remains another significant threat to content owners.

Greeson said his conclusions were based on the findings of a study done in Q4 of 2009. About 2,000 U.S. and 1,000 U.K. broadband users 16 and older were polled about their content viewing and copying activity the previous six months. The responses indicated about 19 percent of the U.S. and 13 percent of the U.K. broadband users were involved with unauthorized copies, he said.

Another key finding was that “rent, rip and return is an entrenched behavior,” especially in the U.S., Greeson said. Twenty-five percent of the DVD copiers and about 50 percent of the Blu-ray Disc copiers polled indicated they rented discs through services including Netflix, ripped them, then returned them, Greeson said. Early adopters are more likely to buy or copy Blu-ray Discs, but improved copying methods “may drive ripping” to grow “even faster,” he said.

"Just a few years ago folks were saying” it was “way too complicated, it’s way too cumbersome” to rip packaged movie optical discs, but it has become much easier, Greeson said. While there were only two widely known software choices for ripping discs in January 2008 -- AnyDVD HD and Doom9 -- there were six by January 2010, he said, citing the additions of Leawo, Pavtube, DVDFab and MakeMKV.

Another key finding was that infringers via P2P and by disc copying seem to be “distinct consumer segments,” Greeson said. People who use P2P sites tend to view the content, then “walk away,” and they don’t typically make copies, he said. The disc users tend to make copies for themselves and others, meaning more revenue lost to the movie industry than from P2P users, he said. Younger broadband users tend to be P2P users, and older broadband users tend to be disc copiers, he said. But he said there’s a small “overlap between the two” camps that’s growing.

The report said 85 percent of those polled said they “would rent or buy” content via an authorized channel if they tried but failed to copy content through their preferred method, Greeson said. So the key for content owners is to “frustrate” these consumers enough that they give up on trying to obtain the content illegally, he said.

Sixty-nine percent of U.S. respondents said they had bought a DVD in the six months before the survey, and among those who bought a new movie release on DVD, 13.4 percent made a copy, Greeson said. On average, those consumers copied 3.27 of such titles and made about 1.23 additional copies of each, he said. Of the U.S. broadband users polled who bought a DVD, 12.6 percent made copies of catalog movies, 6.7 percent copied TV shows and 6.6 percent copied special interest titles, he said.

In comparison, 78 percent of the U.K. respondents said they had bought a DVD in the previous six months, and among those who bought a new release on DVD, 9 percent made a copy, Greeson said. On average, those consumers copied 2.1 new release titles and made 0.67 additional copies, Greeson said. Special interest DVDs proved to be especially popular items to copy there, because of soccer’s popularity in Europe, he said.

Seventy-four percent of U.S. respondents said they rented a DVD during the six months before the survey, and, among those who rented new release movies, 11.1 percent made a copy, said Greeson. On average, they copied 4.16 of the titles and made 2.89 additional copies, he said.

Only about 6 percent of U.S. respondents said they bought a Blu-ray Disc in the six months before the survey, Greeson said. But he said among those who bought a new movie release, 24 percent indicated they made an unauthorized copy. On average, they copied 3.34 new releases and made 1.6 additional copies of each, he said.

About 77 percent of U.S. respondents said they didn’t get free copies of premium video content, and the proportion was much lower -- 46 percent -- among U.K. consumers polled, Greeson said. The main reason for the difference was that U.K. newspapers often give away DVDs, he said.

In a separate presentation, Greeson said consumers continue to largely avoid TV video on demand, in part because “the interface is lousy.” One way to improve on demand revenue would be for cable and satellite providers to offer a Pandora-style service that offers consumers choices based on individual tastes, he said. Better metadata would offer more flexibility for TV service providers to add written details about programs and multimedia including cover art, which would also make the offerings more attractive, he said. Greeson also predicted that Netflix, fresh from announcing plans to expand outside the U.S. with a streaming-only service in Canada (CED July 20 p7), will offer the same service in the U.K. He also predicted that Netflix will introduce a premium pay streaming service like Hulu Plus.