Video Piracy Growing Alongside OTT Video

Video access has evolved from theaters and broadcast television to TV over managed networks, physical media, digital media, and online video over unmanaged networks. Today, over 70% of U.S. broadband households subscribe to an OTT video service; in Europe, 55% of broadband households in the U.K., and 51% in France watch TV programming and movies online. This broad change has resulted in unique challenges for content owners, distributors, and other video-related stakeholders in terms of protecting their intellectual property. 

OTT services continue to disrupt the traditional content distribution model. However, while demand for content is strong, U.S. broadband households spend less than $1 per month buying and less than $1 per month renting digital video, indicating they are not yet inclined to pay for video on an asset-by-asset basis. The data suggests that households engage in transactional video behavior on a minimal basis annually. Meanwhile, technologies that created the OTT video economy also increased the risk for piracy.

Parks Associates research shows 6% of U.S. broadband subscribers indicate that they access a subscription OTT video service paid for by someone outside their home. Younger consumers, specifically, report sharing passwords for OTT services at a disproportionally higher rate than older consumers, making it a demographic of high concern to content providers. This demographic includes recent move-outs piggybacking off their parents’ accounts. However, the industry has done little to police password sharing, instead taking an attitude of tacit acceptance despite an estimated $500 million loss in direct revenues worldwide in 2015.

As the premium video space expands to IP through network-provided apps and TV everywhere services, the industry may have more revenue than ever to lose from single-factor authentication credentials.

As digital video distribution continues to expand, so too will piracy. My CONNECTIONS panel session on May 25, “Risky Business: Piracy and Protecting Content in an OTT World,” will take a deep dive into consumer frustration with DRM systems and the prevalence of password sharing. Joining me in the discussion will be:

• Shane Keats, Director of Industry Marketing, Media and Entertainment, Akamai Technologies
• Paul Moroney, SVP Advanced Technology, ARRIS
• Petr Peterka, Chief Technology Officer, Verimatrix
• Mitch Singer, President, Digital Entertainment Content Ecosystem
• Robin Wilson, VP Business Development, NAGRA

This year is the 20th anniversary of CONNECTIONS, so in addition to examining current and future trends, I and other Parks Associates analysts will be looking back at the last 20 years of technology innovations. I hope you are able to join us at the event!