What’s behind the surge in online video piracy?

In part one of this series, we discussed how the boom in live streaming is changing how people consume live events, and what content providers need to know about protecting their content and its associated revenue. In part two, we’ll dive into the role live sports plays in online video piracy and what is at stake. 

The biggest force behind live streaming

Live sports, which shut down at the advent of the coronavirus pandemic, have been the biggest force behind live-stream viewing and are sure to resume that role now that things are picking back up. OTT operators with popular sports content like fubo TV, YouTube Live TV, Hulu Live TV, and even more specialized sports league packages have become mainstays of online viewing across the globe. 

The demand for online access to live sports has brought major tech companies into competition for live streaming rights, including: 

• Amazon’s multi-year Thursday Night NFL and English Premier League (EPL) deals 
• Facebook’s rights to Major League Baseball (MLB), Major League Soccer (MLS), and a variety of college and international events 
• Verizon’s NFL deal that has made games available on its AOL and Yahoo sites 

The surge in demand is evident everywhere. Viewership during the 2016 Summer Olympics is just one example and a vivid one at that. Although NBC reported a drop in traditional TV viewing compared to the 2012 summer games, the amount of time viewers spent watching streamed coverage nearly doubled the time spent streaming the 2012 Summer Olympics and 2014 Winter Olympics combined. 

Providing online viewing improves engagement

A more recent and equally dramatic example occurred during the Q4 2019 regular-season NFL games and shows that when online streaming is offered, engagement improves. When games were available for online viewing, Conviva saw an average per-game increase of 4% in total global video traffic. Some games pushed the global spikes to nearly 30%. In 2018, the FIFA World Cup had a similar impact on global traffic. The peak level of concurrent sessions in the final game topped 9 million, a record surpassing the previous high set by that year’s Super Bowl. 

Fox, the producer of the 2020 Super Bowl, said its average per-minute online viewer count (3.4 million) far outstripped previous averages. Other events breaking streaming records in 2019 included the Rugby and Cricket World Cups, basketball’s March Madness, and the U.S. college football championship. 

International sports and esports 

The U.K. is another sports streaming hotbed. Sky Now TV, first launched in the U.K. and now available in many other countries as an OTT subscription service, has a heavy live sports schedule. The company also offers one-day pass options for streaming EPL matches. Additionally, Amazon Prime provides an a la carte offering that allows users to pay extra for any of 40 live-streamed TV channels, including Eurosport. 

Competing with Sky in the U.K., BT has been making coverage of Champions League and Europa League finals available on YouTube for several years. According to online video publisher Ooyala, more than 45% of sports viewing in the U.K. and Ireland occurs on smartphones and tablets. 

Turning to Japan, the numbers aren’t much different. Perform, a digital sports group with roots in the U.S., has a ten-year contract to stream J-League soccer games, which can be purchased on a monthly (or longer-term) basis through the DAZN online service. In India, licensing of sports rights by the dominant leagues has been a key driver of satellite provider Star India’s online venture, Hotstar. It saw viewership on second-year streaming of the two leagues surge to 87 million and 100 million, respectively, the latter representing a 144% jump over first-year performance. 

Adding to the acceleration in live sports traffic, esports events have reached digital audience levels on par with traditional sports. In 2019, per-event viewership averaged 480 million, representing an 18% increase over the previous year. Total time spent by all viewers streaming esports worldwide came to 5 billion hours, which led Netflix to identify esports as a bigger source of competition for viewership than any of its SVOD competitors.

The financial impact of online video piracy 

By 2022, global losses to online video piracy are projected to reach $51.6 billion, nearly double the amount lost in 2016. That’s equivalent to 61.2% of $83.4 billion that will be generated through legal access to streaming services in 2020. 

These findings track closely with other projections. Parks Associates estimates $67 billion will be lost to streamed content theft in 2023, with about $55 billion of that total resulting from access to online video piracy sites, apps, and devices. According to Parks, 20% of broadband households in the United States admit to using a piracy device, app, or website. 

Judging from other reports, theft of live-streamed content is a heavy contributor to those losses. Internet technology supplier Sandvine reports that 6.5% of North American households access illegal live TV services every month, which equated to $4 billion in lost revenue for legitimate providers in 2017.

In a 10-country survey of over 6,000 sports fans, Ampere Analysis found that just over half are watching content from pirate services at least once a month. In the U.K., 54% of young adults in the 18-24 bracket surveyed take advantage of online video piracy to watch sports events.

The scale of the impact of online video piracy on live sports programming is also reflected in a report on the illicit streaming of soccer games in Spain, which found the profit loss attributable to piracy came to about 270 million euros in 2016.

Conclusion

The increase in potential for live streaming and the fracturing of the traditional content delivery model means that companies looking to live stream content need an affordable and flexible digital rights management solution to keep their investments secure. 

To find out more about the risks and opportunities of live streaming content and how it will affect your business over the short to medium-term, read our in-depth whitepaper here. And stay tuned for part three of this series, where we dive into how attack modes are expanding in the online video piracy ecosystem.