Internet Piracy: The Effects of Streaming Services and the Digital Marketplace

Internet piracy was thought to be an unstoppable blight on the digital market as recently as five years ago. As quickly as music, movie, and video game companies could shut down pirates and pirate sites, new ones would appear. The notorious Pirate Bay website, for example, is practically indestructible, having survived being forcibly taken down almost a dozen times. Entertainment and software companies began to prophesize the end of their industries due to lost profits from piracy if they weren’t given the tools to fight internet piracy, leading to attempts by the federal government to pass draconian internet laws like SOPA and PIPA. These bills defined internet criminal activities incredibly broadly and would have allowed companies to bring down sites with a single complaint, with the burden of proof passing to the allegedly infringing site. When those attempts failed, companies began to attack individual pirates and pirate enablers by bringing lawsuits against them. For the pirates, these lawsuits could result in enormous fines relative to the value of what they downloaded. As for the enablers, one only needs to look at the history of Napster and Megaupload to see how far these companies were willing to go to stop illegal downloads. Napster and Megaupload’s businesses were shut down by lawsuits, while the owner of Megaupload, Kim Dotcom, was violently arrested during a raid of his home in New Zealand, had his assets seized, and was extradited to the U.S. to face charges. Yet, while predictions were that internet piracy would increase, over the past few years we’ve heard fewer and fewer outbursts from these production companies.

As it turns out, the total amount of illegal downloading has been steadily decreasing for the past few years. In particular, the use of torrents to illegally share files has been decreasing drastically. Torrents operate as a peer-to-peer file distribution system and are one of the preferred ways for pirates to illegally copy copyrighted materials due to how easy it is to use them and how secretly people can download illegal copies with them. So what caused illegal downloads to decrease?

The most popular theory is that when primary distributors make their copyrighted work as easily accessible as pirated material, people will switch back to acquiring the work through legal channels. In other words, companies have begun to embrace the convenience of the digital marketplace and are offering safer and faster services than pirates could provide, which has drawn people away from acquiring the work illegally. Pirating always contains a few risks that these services avoid. First, there is always a risk when pirating that a pirate might be caught and sued. Second, when pirating there is no guarantee that the product downloaded is what it says it is. Oftentimes, individuals will maliciously disguise malware as songs or movies and place it on pirating sites. New legal distribution systems avoid these risks while being faster (usually) than their illegal counterparts. In particular, subscription streaming services such as Netflix and Spotify have provided incredibly convenient access to television shows and films, and music, respectively, and have single handedly had a notable effect on illegal downloads of videos and songs.

That is not to say that internet piracy has gone away. First, just because streaming services are available, doesn’t mean that product will not be pirated. For some consumers, even a minimal payment is too much. Second, certain types of products are difficult or impossible to stream, such as computer software, books, and video games. These products will often rely on different types of digital rights management (DRM) software to protect the goods from copying. This software is sometimes a double-edged sword and can encourage potential customers to turn to piracy. This is particularly apparent with video games. Games running with DRM can experience extreme technical issues or can be completely unplayable, while a pirated copy will have the DRM removed and will run without complications, creating a situation where the only people who can play the game properly are pirates.

What’s more, pirates have begun to compete with streaming sites by streaming content themselves. These sites illegally host streams of television shows or movies for anyone to watch. This causes new problems for companies going after end users of these sites as they never actually download anything on their computer. The sites themselves are near impossible to completely take down. Some people even illegally stream on popular sites, like Facebook and YouTube. These sites have methods of taking down illegal content, but it is nigh impossible for them to monitor everything that’s uploaded to them and remove all uploaded illegal content.

Internet piracy will never go away. Some people will always pirate movies, songs, games, and software. The only question is how to combat this theft. Right now, it looks like the best method is to improve service to the customer and emulate the success that services like Spotify and Netflix have had in regards to reducing internet piracy. Most people just want to get their entertainment as easily and as quickly as possible. Certainly some products cannot be streamed like books or video games (though that might change in the future), but they can still be offered on services that are easy to use and access like Amazon. So long as piracy is the fastest and easiest way, people will pirate. But, if procuring entertainment becomes easier through legal means than illegal ones, then, hopefully, the piracy problem will be minimized.

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