Piracy, Account-Sharing Expected to Cost Video Providers $9 Billion in '19, Says Parks

Over-the-top and pay-TV providers will lose $9.1 billion this year to piracy and account sharing, growing to $12.5 billion in 2024, blogged Parks Associates Tuesday. Currently, 27 percent of U.S. broadband households engage in some form of piracy or account sharing, it said. “Piracy is a complex issue that cannot be addressed with a single solution or by targeting a single use case,” said analyst Brett Sappington, noting that most video pirates subscribe to at least one OTT service. “They are not simply thieves looking to steal content but are video enthusiasts who engage with many different services,” Sappington said, suggesting OTT services could better reach those consumers through ad-based content, “which also aligns with these users’ general belief that ‘movies/music should be given away for free.’” Consumers who report viewing an OTT video service for free but without ads are 22 percent more likely than average broadband households to subscribe to OTT services, three times as likely to use ad-supported services, and twice as likely to use transactional online video services, said Parks. Growth in connected device ownership has shifted the focus of pirates toward the online video ecosystem; 20 percent of households are using a piracy app, website or jailbroken device, it said. “Growing subscriber numbers and an increased number of services signal a very healthy OTT market, but more services and aggressively promoted content could incite more piracy over time,” Sappington said, saying eventually consumers will hit an upper limit to spending. “When that happens, they will resort to pirate tactics to get the content that they want, particularly for sports and other content where trials are not available.” The demographic groups most often subscribing to OTT services -- men under 35 and households with low annual incomes -- pirate content at a disproportionate rate, he said.