• Patrick Dalisay

Digital Piracy - An Uphill Battle

Updated: Sep 18, 2020

With technology becoming an inherent part of our lives, digital piracy is also spreading its wings far and wide across the globe. In this article, we discuss how and why the US economy dips with a loss of about $29.2 billion each year due to the excessive use of pirated content. We further elaborate on how the Digital Millennium Copyright Act (DMCA) works to enforce copyright laws and criminalize digital piracy. Read on to know why is it so difficult to do away with digital piracy and the steps that can be taken to reduce its impact.

It's no secret that intellectual piracy runs rampant within our society. Whether it be music, movies, games, or even art and photographs, intellectual piracy affects all industries. When intellectual piracy takes place in the digital realm, it is referred to as digital piracy, which is the illegal downloading, copying, or sharing of digital content without permission. In some ways, patent infringement may also be classified as intellectual piracy; any instance of stealing another's works would be considered piracy, inventions included. Piracy is not exactly a complicated skill to master either, with many people around the globe partaking in digital piracy.

Why is Piracy so Widespread?

For some, money is scarce, and media is a luxury, so digital piracy may be the only option to enjoy a new book or a new video game. Perhaps some may think that the cash-rich companies are trying to squeeze the consumers for everything they have, so they pirate their goods and consider it to be their “fair share”. But for others, it is not feasible to obtain the media in their country and pirating becomes their sole way to have the pleasure to experience it. Piracy has always found a way to be excused into the common life and it has massively affected not only individual companies but the worldwide economy as well.

As mentioned above, one of the most common reasons why people pirate digital media is due to the cost attached to the original content. The ability to get things such as software and media for free appeals to the masses, whether it be a $3 movie or a $300 software. Consumers can get digital media in a matter of seconds.

The Impact of Digital Piracy

In the United States, the entertainment industry contributes substantial revenue to the national economy; this includes the music, film/television and gaming industries. A study conducted in June 2019 found that digital piracy costs the U.S. at least $29.2 billion in revenue every year. This is backed by the U.S. Chamber of Commerce stating in 2019 that pirated videos were viewed over 200 billion times. Seen below are graphics of how digital piracy has impacted the economy both within the U.S. and globally.

Total Digital Video Pirated (Billions, 2017) (Source)

Estimated Impact of Digital Video Piracy on U.S. Employment (Thousands, 2017) (Source)

Global Downloads and IPs in 2014 (Source)

Key Piracy Statistics (Source)

As for the video game industry, research by Tru Optik show that 2.5 billion games were pirated and downloaded in 2014 alone, which equals to around $74 billion in revenue. Just in the United States, piracy has made a huge impact on the economy, but what are we doing to fix it?

Digital Piracy Solutions, Do They Work?

The industry has been trying to combat piracy for years with varying solutions, some effective and some less helpful. In 1998, the US passed the Digital Millennium Copyright Act (DMCA) in order to enforce copyright laws and criminalize digital piracy. The DMCA works in tandem with digital rights management (DRM) to combat digital piracy, with DMCA prohibiting the circumvention of digital rights management.

DRM reigns amongst the most effective methods of fighting digital piracy. Using encryption, DRM allows companies to limit what consumers can do with their products. For example, DRM has the ability to limit users from editing or saving content, sharing products and it can even set an expiration date on media.

However, some consumers, companies, and prominent figureheads believe that DRM has had an overall negative impact on the industry and should be eliminated. To these individuals, the title of digital rights management is misleading; digital restrictions management is a more accurate description of what DRM actually provides. DRM makes it hard to distinguish a legitimate buyer from an illegitimate one and this can hamper the legitimate buyer's ability to enjoy the media they purchased.

Another approach to reducing piracy is piracy analysis. Piracy analysis uses automated search engines, personal agents, and search engines to initiate takedowns. Examples such as Onsist, Red Points and VFT Solutions are used to help companies track where pirated content is streamed, served or downloaded to identify piracy.

Often, removing a download or stream is equivalent to cutting off a hydra's head; you take one download down and two more will pop up on another site. A big problem with digital piracy is that there is always a medium where pirates can access the content they are looking for. Creators can send in a DMCA takedown letter and get the pirated media removed, but it will likely get uploaded onto another site.

Sample DMCA Notice (Source)

The most notorious site is the infamous Pirate Bay, which was raided in both 2006 and 2014 by the police in Sweden, and Pirate Bay’s servers were seized. However, Pirate Bay still exists today, as multiple versions of the Pirate Bay website popped up after the raid. If these resurgences are possible, what can companies do to combat against these new versions?

Patents against Piracy

Companies are eagerly trying to combat piracy by innovating new technologies and methods attempting to identify pirated content. For example, Sony has filed numerous patents in an attempt to combat piracy in their products by working to improve DRM by employing novel methods of adding a layer of protection, among other techniques.

In August 2011, Sony filed a patent to target load times by tracking periodic checkpoints for devices. U.S. patent 8,826,456 adds a threshold range of acceptable load times for these checkpoints and associates it with legitimate media. If the range of load times on a particular media type is outside of the threshold, then it will check the user identification information, such as a serial number, within the product to account for errors of the load times. If the user identification cannot be verified, the media will be deactivated and it will not play. This was assigned to Sony in 2013, who in the same year announced the PlayStation 4, which could identify when a copied or burned DVD or game was inserted into the console.

As previously mentioned, VFT Solutions is a company solely focused on identifying illegal media, and they have even created patents on their methods. U.S. patent 10,080,047 claims methods for “identifying, disrupting and monetizing the illegal sharing and viewing of digital and analog streaming content". It targets live streaming applications such as YouTube, Instagram and Periscope, where pirated media is often broadcasted to millions of viewers with very little effort. The patented technology focuses on solving the identification process, deterring and monetizing unchecked activity within live streaming applications and similar media sources. The technology provides a method that uses lists of keywords, images, watermarks, etc. to identify similar websites with matching components. It will use a generated virtual persona on a website to gain access to “Nano-pirate broadcasts”, where the system will identify and analyze whether the broadcasts are streaming illegal content.

In addition to targeting the hardware and software components to identify pirated media, some inventions introduce incentives that discourage pirating. Sony filed a patent application in December 2007 that was published as of June 2020. The patent introduced a method of sending interactive views of video game sessions from the server to a client device. U.S. patent 2020/0197804 claims a method of sending a display of video game sessions that users can select and then interact with on the client device. Because the media is being sent by the server, the media cannot be directly accessed by the user therefore making the media unable to be pirated.

What Happens Next?

Even as technology advances and anti-piracy methods become more streamlined, it's hard to say that digital piracy will ever go away. To fully remove digital piracy, the core incentives must be targeted and taken away. With the introduction of new platforms and technologies such as streaming, it has become easier for even casual users to partake in digital piracy. Content owners and creators still have a long fight ahead of them and anti-piracy technology will have to grow to stop digital piracy more effectively.


Patrick Dalisay

Associate Consultant at Lumenci

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