While it is seldom noted publicly by streaming purveyors, about 27% of U.S. broadband households engage in some form of piracy or account sharing, Parks determined. The current revenue hit is $9.1 billion, according to the researcher’s new report, 360 Deep Dive: Account Sharing and Digital Piracy. As connected devices have become ubiquitous, piracy is focused on these newer conduits, with 20% of U.S. broadband households acknowledging using a piracy app, website or “jailbroken” device.
“Piracy is a complex issue that cannot be addressed with a single solution or by targeting a single use case,” said Brett Sappington, Senior Research Director and Principal Analyst, Parks Associates. “Most pirates also subscribe to at least one OTT service. They are not simply thieves looking to steal content but are video enthusiasts who engage with many different services. OTT services could better reach these consumers through ad-based content, which also aligns with these users’ general belief that ‘movies/music should be given away for free.’”
With more than 235 OTT services now targeting U.S. consumers and penetration of subscription and free, ad-supported services up 13% and 23% over 2018 levels, respectively, the market is healthy, Sappington notes. Substantial new offerings are also on the way from Disney, NBCUniversal, WarnerMedia and Apple.
Nevertheless, the Parks report cautions that all of the increased focus on streaming and the “aggressively promoted content” on newer platforms is apt to worsen the piracy problem. “Consumers will hit an upper limit to spending eventually,” Sappington said. “When that happens, they will resort to pirate tactics to get the content that they want, particularly for sports and other content where trials are not available.”
Technical issues with log-in represent another pressure point, with the Parks study finding that 19% of U.S. broadband households experience account-related issues with an online video service. Frustrated by going in through the legal entryway, an increasing number of viewers — primarily male, under-35 and in lower-income situations — appear willing to jump the fence.