Advertising Agency Initiative Cuts Piracy Ad Revenue in Half

October 5, 2017

We live in a time of incredible innovation, experimentation, and investment in the media. Around the world, creative content is proliferating dramatically – as are the platforms and services for consuming it.

However, this explosion of creativity and innovation is threatened by the illegal streaming and distribution of creative content across large-scale pirate sites.

Today, piracy is a significant global challenge. It is an expansive black market that threatens the viability of millions of jobs and undermines the legal digital market for creative content. In 2016 alone, there were an estimated 21.4 billion total visits to streaming piracy sites worldwide, according to an analysis of SimilarWeb data.

At the same time, large-scale pirate sites generate significant revenue for illicit enterprises. The operators, for example, reap huge profits by placing digital ads on their sites. A study by the Digital Citizens Alliance, found that the top pirate websites generated $209 million in revenue from ads in a single year. Overall, online piracy (including film, television, music, games and publishing) has become a $2.4 billion problem for our economy, according to the Interactive Advertising Bureau.

Fortunately, scores of major companies involved in the media and advertising industry have joined the Trustworthy Accountability Group (TAG), a voluntary initiative designed to eliminate fraudulent traffic, prevent piracy, and combat the malware increasingly found on piracy sites.

On October 5, TAG released an Ernst & Young LLP (E&Y) study, “Measuring Digital Advertising Revenue to Infringing Sites,” showing the impact of industry efforts to reduce ad-supported content piracy. The report found that TAG validated anti-piracy steps have reduced ad revenue for pirate sites by between 48 and 61 percent. Other study highlights, include:

  • Digital ad revenue linked to infringing content was estimated at $111 million last year, the majority of which (83 percent) came from non-premium advertisers.
  • If the industry had not taken aggressive steps to reduce piracy, those pirate site operators would have potentially earned an additional $102-$177 million in advertising revenue, depending on the breakdown of premium and non-premium advertisers.

As TAG CEO Mike Zaneis said: “We have not won the war against ad-supported piracy, but the battle is joined and we are making good progress.” He went on to explain the key factor is hundreds of companies working together and using tools validated by TAG to cut off “the revenue of criminals who profit from stolen content and reducing their incentive to distribute it.”

The TAG initiative is an important step forward. It demonstrates the effectiveness of collaborative action across multiple industries. But if we are to expand the legal marketplace for creative content and protect the over two million American jobs supported by the film and television industry, we must do far more.

To make continued progress, it’s time for other stakeholders to follow in TAG’s footsteps – including hosting providers, cloud and anonymizing services, payment processors, social networks, and search engines – to play an active role in curbing piracy.