The top 5 consequences of content piracy in the entertainment industry

As the entertainment industry continues to evolve and diversify at a rapid pace to accommodate the massive surge in the digitalization of content, the instantaneous and easy access to high-quality content is also bringing a rise in sophisticated content piracy.

Put simply, content piracy involves the unauthorised acquisition, use, sharing or selling of copyrighted content. Piracy is stealing.

As high-quality content and advanced streaming technology becomes more easily available, it has also become easier for pirates to illegally acquire and redistribute content.

According to a report by IBC — a technology company providing anti-piracy and market analytics — film piracy has increased by 40%. The report shows that while the world was under lockdown as a result of the Covid-19 pandemic, film piracy increased by 41% in the United States, 43% in the United Kingdom, 50% in Spain, 62% in India and 66% in Italy, when compared with the final week in February 2020, before most countries went into lockdown.

The content most often pirated via the internet is software, music, literature, and video content, including live sports and the latest series and movies – making streaming piracy arguably the biggest threat to content owners, broadcasters, and operators.

Below, the top five consequences of content piracy are outlined.

Piracy has a negative effect on the economy

Piracy is a global phenomenon. Digital video piracy costs the entertainment industry up to $71 billion every year, according to the US Chamber of Commerce’s Global Innovation Policy Centre – harming businesses, destroying lives and livelihoods.

In South Africa, the overall creative industry is valued at R74,4bm, contributing 1,7% to the GDP - a study by a renowned intellectual property law firm in the country revealed that the local music market alone, was projected to account for US$1.7 billion.

Jotam Matariro, CEO for Capasso (Composers, Authors and Publishers Association) has been noted saying of all music downloaded or streamed via digital platforms, it was estimated that only 37% was extracted legally. “In South Africa, this means that an estimated R691m in revenue is lost to piracy and the situation is getting worse.”

Left unchecked, the theft of content severely harms investor confidence, tax revenue, and can also affect trade opportunities – effectively finishing off an economy that is already ailing.

Reduces the ability for creative professionals to earn a decent living

Content creators around the world, including South Africa, create powerful creative content in inter alia the music, film, sports, gaming, publishing, broadcast, and animation sectors. However, this wealth of content is met by a relentless scourge of piracy that robs creative rightsholders of their livelihoods.

When a company or individual produces a show, and that show gets pirated, it immediately becomes a less profitable show. That means there’s less incentive for anyone to produce or commission another show in future.

Where producing content for audiences stops being profitable or worthwhile, content production stops. South African content users will be reduced to making do with poor-quality entertainment, old content and content that does not fulfil the needs of their community and their culture. Besides destroying Africa’s creative economy, piracy can also lead to import substitution, where all content is imported from the USA, Europe and other overseas markets. Audiences will no longer be able to access content that reflects their own lives.

Negatively affects brand value and reputation

Pirated content may damage the brand image and reputation of firms over time.

According to a report by the Organisation for Economic Co-Operation and Development (OECD) titled, The Economic Impact of Counterfeiting and Piracy, when a firm’s content is found on pirated sites – which are often loaded with malware and explicit advertising – it can negatively affect their brand reputation as a trusted entertainment provider.

When audiences’ expectations are not met as a result of accessing low quality content on a site, they will likely blame the originator of the content thus resulting in a loss of goodwill. If consumers never discover that they were deceived, they may be reluctant to engage with that firm’s products and content in the future and may communicate dissatisfaction to other potential buyers.

Fighting criminal networks and organised crime requires substantial resources

Analysis shows that criminal networks and organised crime thrive via piracy activities. The items that pirates produce are often substandard, sometimes endangering the lives of those who purchase them.

The magnitude and effects of piracy are of such significance that they compel strong and sustained action from government – often requiring the strengthening legal and regulatory frameworks, enhancement of enforcement and the deepening of the evaluation of policies, programmes and practices.

Below are some policing challenges when it comes to piracy:

• Extended investigation times: Due to limited capacity and availability, police investigations into broadcasting piracy often take longer than they should. This delay impacts the overall case handling time and potential prosecution.

• Reluctance and inexperience in dealing with intellectual policy matters: Police stations often show reluctance in investigating piracy cases due to inexperience and lack of knowledge in dealing with intellectual property matters.

• Prolonged device analysis and potential cost: The police analysis of seized devices may take longer due to the junior level of staff working in the labs. Sometimes, police may recommend that the complainant pays for the analysis, adding a potential financial burden to the process.

• Extended duration for Section 205: The process to receive bank details under Section 205 can take up to three months with certain banks, further delaying the investigation process.

• Verification of suspects and addresses: There are challenges in verifying the identity and addresses of suspects, which is a crucial part of the investigation process.

• Untraceable burner phones: Suspects often use burner phones, which are difficult to trace, making the collection of evidence a challenge.

• Communication issues: There is a lack of effective communication, specifically with the Provincial Commercial branch in Cape Town. Promises made often remain unfulfilled, leading to a lack of progress in cases.

• Resource allocation at DPCI: The Directorate for Priority Crime Investigation (DPCI) is value-based and may require proof that the value of the investigation exceeds R500,000. This requirement places an additional burden on the claimant and could result in cases being overlooked due to the assumed lack of value.

Piracy poses safety concerns for consumers

Content that is found on pirated sites is often loaded with malware and explicit advertising.

Using pirated content or software puts consumers at risk because illegal and counterfeit software may infect their devices with viruses, malware, or adware.

Pirates also use pirated content as a trap to steal sensitive information. When accessing an illegal site with pirated content, consumers have a one in three chance of accidentally downloading malware with it. This can lead to irreparable damages, like identity theft and loss of personal data including payment information.

By nature, networks that distribute pirated content are largely infectious environments ripe with tracking cookies, spyware, Trojans and more.

Also, unsafe payment methods can lead to credit card fraud and other financial scams.

Piracy robs content creators, artists, and entire creative communities of their royalties and is also a violation of copyright and intellectual property rights.

In order to educate consumers across the board on the devastating impact of content piracy, the Copy Coalition of South Africa and various other private and public stakeholders came together to launch Partners Against Piracy (PAP).

PAP was officially launched in Kenya in 2018, and it is a multi-stakeholder awareness programme to help fight the piracy menace, by educating the public on the unintended consequences of piracy and the threat it poses to livelihoods, and to society. The initiative looks to ensure Africa’s creatives earn a living from their talent, freeing them to continue creating relevant, entertaining content that reflects the culture and interests of the continent.