The availability of high quality content and broadband access becoming the norm is making online pirates’ lives a lot easier. Content owners, sports rights holders and operators are taking steps to address this problem. But is it enough to have the impact needed to curb the rising tide of piracy?
Disruption affecting studios
Studio’s revenue comes not only from box office performance but also from a complex system of staggered releases of the content to the hospitality industry, Blu-ray/DVD, PayTV, OTT etc. With the growth in online viewing, legal and illegal, there’s a significant decline in DVD sales. Although Blu-ray sales are steadily increasing they will not cover the short fall.
Nielsen ‘Home Entertainment Consumer Trends’ May 2015
Step forward, OTT providers. In 2015, the major three (Hulu, Amazon and Netflix) were estimated to have paid over $6bn to studios as part of their content acquisition strategies. OTT providers are now an important part of the studios revenue mix. But they are also a competitor. All three investing in producing their own original content.
Different business drivers
For studios, they must make movies that sell. Each movie must carry itself. Having a string of movies that don’t deliver the numbers has a direct impact on their bottom line. Piracy across their distribution chain: redistributing early release movies to ripping discs, has an immediate impact.
OTT providers, on the other hand, rely on a reoccurring business stream: subscriptions. And having compelling content is key to attracting subscribers. This, in addition to high studio fees are no doubt the reason they’re starting to generate their own original content. Reoccurring revenue means the impact of piracy, for them, is not felt immediately. Although you could argue, that if it’s not addressed it will ultimately undermine their own business in the long run as subscribers move to pirate subscriptions offering the same OTT original content. Proof in point, Amazon’s Grand Tour is the most pirated TV show followed by HBO’s Game of Throne.
What’s the trigger to unite?
We only have 24 hours a day and a share of that is spent viewing video. All kinds of video are competing for our eyeballs – movies, TV and sports. If we don’t unite against online pirates consumers will simply migrate to the format that they can get hold of at the lowest cost. So while initiatives like MovieLabs ECP is a great step in the right direction, unless we unite across all platforms we will fail.
Pirates are formidable competitors to each player in the media industry. I’m not sure what will bring the industry together – maybe the ongoing consolidation of pay-TV and telco and content owners will? But it’s clear that for the industry to have half a chance of beating online pirates, we must work together. And although it’s encouraging to see some progress we need to move faster to prevent piracy becoming the norm.