Money for Nothing: The Billion-Dollar Pirate Subscription IPTV Business

Piracy used to mean bringing a camcorder to a movie theater or selling burned DVDs ––on a busy city sidewalk. But as technology has advanced, so have pirates’ models of service. Now, most pirates offer subscription Internet Protocol Television (PS IPTV) Services, which mimic popular streaming services like Hulu and Netflix, offering huge libraries of on-demand and live entertainment for just a few bucks a month.

According to a recent study conducted by the Digital Citizens Alliance and NAGRA, those few bucks a month really add up: PS IPTV services generate subscription revenues of $1 billion annually in the U.S. alone, even excluding the sale of pirate streaming devices used to receive the content. It’s a big number with even bigger consequences.

First, considering PS IPTV scammers don’t pay for the content they distribute, that profit stays with them versus helping the hardworking creators who deserve it. Actors and producers, sure – but also commercial drivers, lighting technicians, make-up artists, sound engineers, caterers, and other key players in the content creation ecosystem. In total, the American film and television industry supports 2.6 million jobs, pays out $177 billion in total wages, and comprises over 93,000 businesses. Piracy puts all of that economic activity at risk.

Piracy puts consumers at risk, too.

The Digital Citizens Alliance/NAGRA study explains, pirates partner with hackers to install malware within their services, exposing consumers to identity theft, ransomware, spyware, and more. In one piracy scheme, PS IPTV users’ residential Internet connections were sold to other criminals, who could potentially use them for their own illicit activities, like accessing child pornography, committing fraud, and launching cyber-attacks. In another instance, a PS IPTV site was giving audience to banned terrorist propaganda television channels.

This information is cause for alarm and its cause for further scrutiny.

Digital Citizens Alliance Executive Director Tom Galvin agrees: “When it comes to piracy, the scope of the risk to consumers, small businesses and others is in direct proportion with the size of the industry, which is why we need to stop the reach and depth of this ecosystem before it grows even bigger.”

The best way to dismantle the piracy ecosystem: consumer education and legislative action. The Digital Citizens Alliance/NAGRA report aims to tackle the first. It’s time for Congress to tackle the latter.