Piracy Is Costing Streaming Companies a Fortune—But There Is a Simple Fix

Any way you look at it, streaming is booming. As of early 2022, the number of OTT streaming video users worldwide stood at 3.28 billion, with subscriber rates surging over the last few years thanks to the pandemic. In July, for the first time ever, U.S. consumers spent more time streaming than they did watching cable or broadcast TV, according to data from Nielsen. Viewers spent 34.8% of their total TV time streaming, and they streamed an average of 190.9 billion minutes per week. That’s a lot of video screen time.

In other words, streaming is big business and getting bigger. But keeping streaming content safe from pirates and bootleggers is a major hassle for streamers—and a major revenue leak. For example, the long-awaited premiere of House of the Dragon finally arrived in August and the Game of Thrones prequel was an instant hit on pirate sites and widely available a day before the official release. Worse, many consumers are sharing their passwords with family and friends (nearly one third of subscribers do this according to one recent survey), opening up streaming services to all kinds of security mischief and legal liability.

More recently, there was a big crackdown in the U.K. where over 1,000 households were raided for illegally streaming Premier League matches using illegal “fire sticks” and subscriptions.

The stakes are high too: The video streaming industry reached $72.2 billion in revenue in 2021, with most of that coming from the U.S. It’s expected to reach $115 billion by 2026.

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That makes streaming services a very enticing target for pirates.

Although we think of the top video streaming services, such as Netflix and Hulu, there are 200+ streaming services available around the world, including special interest streamers like Crunchyroll, Fandor and Crackle and new ones are coming online all the time. And that’s not even counting audio and gaming streaming services, which are also multiplying.

And all of them are potentially vulnerable. The gaming streamer Twitch for example, was hit hard last fall when hackers posted 120 gigabytes of Twitch data on the online forum 4chan. In fact, by some estimates, as much as 20% of global online piracy can be attributed to illegal streaming services. That’s a very leaky revenue pipeline.

The good news is that distributors and content producers have an easy way to protect their digital assets with digital rights management (DRM) technology that can thwart theft, stop illegal distribution, and prevent misuse. DRM works by stopping digital content from being stolen in the first place by blocking consumers, pirates, or anyone from:

• Editing or saving content
• Sharing or forwarding content
• Printing or distributing content
• Holding onto expired content

At the same time, DRM can also stop users from specific IP addresses, geographic regions, or domains from viewing content as well.

Streaming services can utilize DRM technologies to determine the geographic location of an IP address. For example, if Netflix Canada needs to enforce allowing only online users from Canada to visit that platform, a sound DRM stack will identify all IPs mapped to a country response of “can” (three letter code for Canada).

Any other country responses such “usa” (USA) or “mex” (Mexico) could be blocked from accessing Netflix Canada.

Additionally, streamers can use DRM technologies to see if the IP traffic coming to that platform is tied to a proxy. If that IP is tied to a proxy category such as “vpn” or “darknet”.  They can then enforce their restriction of that content based on this proxy information.

DRM has been around since the 1960s but only recently has it become sophisticated enough to handle some of the bigger nuances needed by streaming services. Many streaming providers cater to global audiences for delivering video, news, sports, eCommerce and gaming services. This makes tailoring content to specific locations crucial for delivering the best subscriber experience.

Being able to feed IP intelligence into content delivery means you can offer personalized, location-specific content while managing global web traffic levels intelligently and enhanced analytics. It’s also a revenue generator: Using IP addresses, DRM solutions help streaming services deliver more targeted advertising, which boosts ad revenue.

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But the biggest reason to use DRM is even more urgent: Security and compliance.

When a streaming service can’t comply with digital license and copyright agreements in real-time at a user, geographic and IP level, they’ll quickly find themselves in legal hot water with content licensors and regulators, both of which have deep legal pockets and are very litigious. And once a streaming service has a reputation for leaving content at risk, all future content licenses may well be out of reach.