From the 1990s to around 2002, the online piracy industry was predominantly financed by donations. But monetization methods have since evolved to include revenue from advertising, malware dissemination and subscription-based models.
Today, one of the biggest challenges facing legitimate content providers comes in the form of a little black box –illicit streaming boxes (ISD) with preloaded applications providing plug-and-play access to hundreds of live TV channels and premium Video-On-Demand (VOD) content.
“It’s the little black box that’s taking over piracy,” said Neil Gane, managing director of CASBAA’s Coalition Against Piracy (CAP). “And it signifies a perfect storm from both the supply and demand perspective.”
A combination of consumer demand and rampant supply by manufacturers has driven the ubiquity of such boxes in many markets, to the detriment of content providers and ISPs in the content distribution business.
While no official studies have attempted to estimate revenue loss to content providers and ISPs from online piracy, a study from Sandvine states that revenue generated from subscriptions to illicit content services account for nearly US$840 million in North America alone.
The little black box is enjoying popularity in Hong Kong. In a survey commissioned by CAP and conducted by YouGov, 24% of pay-TV subscribers use ISDs, with 49% of these users subsequently ending some or all of their pay-TV subscriptions.
The business is a lucrative one for online pirates, as ISDs can easily be purchased through popular e-commerce and social platforms such as Aliexpress, Lazada and Facebook.
Disrupting black box sales
Close collaboration between various industry players and the government is crucial to counter usage of ISDs, shared Gane, adding CAP has engaged intermediaries to ensure reduced access to the products. Barriers have also been initiated to hinder the payment process for ISDs and their associated services.
E-marketplaces such as Lazada now block product listings containing select keywords (in various languages) from appearing in search results, to increase the difficulty consumers have in locating and buying the products. Certain keywords have also been barred from appearing in product listings.
According to Gane, Facebook will remove posts advertising the sale of ISDs within three to four hours, if presented with sufficient evidence by CAP.
Mastercard’s Business Risk Assessment and Mitigation (BRAM) compliance program now includes anti-piracy features, which aim to terminate the merchant accounts of proven ISD sellers. A shared database aims to prevent these same merchants from applying for accounts at other financial institutions.
Raising consumer awareness about the purported ill effects of ISDs could also serve to dampen demand for the products, said Gane, adding that such risks could include malware infections or having children access inappropriate content.