Parks Points

Consumer frustration just one factor leading to video content piracy

by Glenn Hower | Feb. 16, 2016

In addition to technologies that facilitate piracy, several trends are contributing to the growth of content piracy among consumers, including trends in password sharing as a result of consumers being frustrated with digital rights management, OTT service adoption, and individual content discovery.

Consumer frustration with Digital Rights Management (DRM) systems has encouraged content piracy. While the intent of DRM systems is to prevent unauthorized copying, DRM may carry certain usage restrictions that consumers believe infringe on their right to fair use. Additionally, the nature of the connected world has fostered a consumer attitude that a user can watch video on his or her own terms. While DRM systems have become more platform and device agnostic than in the past, a restrictive environment for content access and use encourages consumers to seek alternatives.

Aside from credential swapping, content security providers fight video piracy with two main methods: content identification and tracking and access restriction. Tools that providers use include digital fingerprinting, forensic watermarking, conditional access, and digital rights management. However, these tools only help prevent unauthorized copying and distribution of content, while another type of piracy exploits the simplicity in content access.

The growing adoption of subscription services that stream video over unmanaged networks has opened the door to a new type of piracy: consumers accessing each other's services. Six percent of U.S. broadband households use an OTT video service that is paid by a person living outside of the household. OTT video service credential swapping will cost the industry $500 million in direct revenues in 2015, increasing to $550.5 million in 2019.

OTT video services, including TV Everywhere services through pay-TV providers, are managed through simple username and password access, information that is easily shared between individuals. Digital OTT services have removed a significant barrier to piracy when compared to physical media rentals—consumers do not even have to leave the house to access video content. With conditional access and convenience barriers removed, consumers are just a few clicks away from hours upon hours of content. Increased penetration of username/password managed OTT video services in turn increases the ease with which consumers can share account information, reducing the price per user to watch content.

While not rampant, account swapping occurs at a notable level. As noted earlier, six percent of U.S. broadband subscribers say that they access a subscription OTT video service paid for by someone outside their household. Twenty percent of OTT users between 18-24 use an OTT video service paid by someone outside the home, the highest of any age group. Ten percent of OTT subscribers 25-34 admit to this behavior.

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Glenn Hower

Glenn Hower

Senior Analyst

Glenn Hower currently studies entertainment content and delivery services. Glenn is experienced in entertainment content production and distribution systems with a particular emphasis on radio, television, and film content.

Glenn earned his BA in music with a focus on the music business and industry from the University of Texas at Austin. He earned his MS and MBA from Texas Woman's University in Denton, Texas.

Industry Expertise: TV & Video Content Production, Content Licensing & Distribution, Television Services, Broadband Services, OTT Services, Digital Music

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