Video pirates – the new TV service providers?

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The good news for owners of TV content is that it is so coveted viewers will do whatever is necessary to secure it. The bad news is that viewers will do whatever is necessary to secure it—even if that includes stealing it. The even worse news is that the illicit ways to secure it are becoming faster and easier.

Since the early days of analog cable TV systems—when some viewers were motivated to climb utility poles to illegally connect to cable service—content protection has been a perpetual game of Whack-a-Mole. Now the moles are scaling.

Sandvine, a provider of network intelligence systems, recently released a report estimating that about 6.5% of North American households are accessing illegal live TV services and paying the illicit providers about $10 a month. In Europe, where many football fans get around expensive viewing costs by using these services, it’s an even bigger problem. Penetration in the UK is pegged at about 15%.

In the meantime, content providers have been buoyed by consumers going outside of the traditional pay TV service to access OTT to get their content (or, at least supplement it). If subscribers will directly access proprietary services like Disney/ESPN and HBO, the content owners can distribute their content and skip paying the aggregators.

This begs the question: Could the pirates reasonably fulfill that aggregation role? In a fragmented landscape where viewers would buy content from multiple sellers, there are legitimate concerns that viewers will get turned off to paying for multiple services, searching for content in multiple “locations,” and enduring 5-10 different customer service operations instead of one. If the pirates are offering a centralized service via the public internet at $10 a month, perhaps more people will see that as a reasonable alternative to paying significantly more for legal distribution. Maybe the pirates could be the new middle men—the new aggregators.

Ten to 15 years ago, this idea wasn’t even contemplated. Piracy took much more time, skill and lurking. Now with the ubiquity of the internet and the exploitation of the legal XMBC (aka Kodi) open-source media player software and other IP-enabled distribution methods (i.e., VPN), it’s gotten a lot easier to watch illicit content.

In the case of legal Kodi software and STBs, the simple addition of a third-party plug-in that allows content streaming without permission from the copyright holders turns this into one of the most popular forms of piracy in our streaming age.

Consumers can add the plug-ins themselves on a computer, or they can buy a euphemistically-termed “fully loaded” Kodi STB. This simply means that the familiar-looking Android TV box (with the legal XMBC/Kodi media player installed) features a “magic” TV plug-in allowing viewers to get to just about any streaming service without paying. You do have to buy the STB, but Amazon will deliver it to your home (sans the brown-paper wrapping), and you just plug it in to your TV (just like a Roku box) and watch content. The Everyman’s piracy solution. (Note: Most developed plug-ins for XMBC have nothing to do with piracy).

Getting these methods shut down are complicated and time-consuming. England has been a bit tougher on the pirates. The US has been a bit behind, but there are a couple of lawsuits wending their way through the system. Although this is just another round of Whack-a-Mole, it is costing content owners billions in lost revenue, while combating the copyright infringement slowly making its way through justice and legislative systems around the world.

Other tools abound, making it popular to use Virtual Private Networks (VPNs) and unblock DNS to access content that is geographically restricted. VPNs have been touted as tools for protecting users’ privacy, but they are widely used to access streaming services outside of a viewer’s country. English football fans can use a VPN to watch the Australian version of the English Premier League at a much-reduced cost.

Most content owners will eventually find a way to enforce their copyrights as they have done in the past. But a confluence of easy-to-use piracy tools, a cultural blindness to IP rights post-Napster, and the advantages of getting all content from one source may have created a new TV services middle man—at least for a while.