Online piracy

As the Internet has continued to grow more technologically sophisticated, online piracy has kept pace. A study funded by NBC Universal and released by NetNames, a British brand-protection firm, found that during January 2013, approximately 423 million Internet users around the world infringed on copyrighted content, an increase of 10 percent since November 2011. Targeted content includes films, television, music, games, and books, and piracy of this content has become so commonplace that some people consider it a right instead of a crime. The significant financial impact of online piracy on copyright holders has become the concern of individuals, businesses, and the US Congress, while advocates for Internet freedom of speech are just as concerned about remedies that might unduly restrict online expression and legitimate use of content.

Brief History

While the use of the term “piracy” in reference to intellectual property has a long history, it only entered widespread use with the advent of the Internet, especially when CD burners made copying and distributing music, software, and other material from the Internet as easy as a few clicks. The most commonly pirated content includes music, films, television shows, e-books, and software. Digital music files, typically in MP3 format, were one of the first types of files to be extensively copied, due to the development of several file-sharing programs in the 1990s that made it easy to transfer such files both legally and illegally.

Internet pirates have turned illegal copying and sharing of intellectual property into thriving businesses, with several websites specializing in hosting pirated files for download. One popular site was megaupload.com, hosted by the Hong Kong–based company Megaupload Limited. In 2012, the US Justice Department shut down the company’s sites and indicted its owners for allegedly operating an organization based on copyright infringement, and Hong Kong’s Customs and Excise Department froze the company’s $42 million worth of assets.

As quickly as authorities shut down pirating services, others just as quickly spring up to take their place. According to a report by Digimarc, a company that provides antipiracy technology for publishers and authors, in the first month after Megaupload shut down, two other sites, Putlocker and Rapidshare, raised the total of pirated books to 13 percent. Digimarc also identified the twenty best websites for downloading free e-books. In another piracy report, brand-protection firm NetNames reported that in Europe and North America, the peer-to-peer file-sharing protocol BitTorrent is the most popular method of downloading pirated material, while in the Asia-Pacific region, pirates prefer direct-download websites.

Software piracy has also continued to advance as technology has improved. The main types of software piracy include softlifting, in which users share their software with other, unauthorized users; uploading and downloading; software counterfeiting; OEM unbundling, in which OEM (original equipment manufacturer) software is separated from the hardware it was originally sold with and distributed independently; and hard disk loading, in which unauthorized software is preinstalled on hardware before it is sold.

Topic Today

According to a 2011 study by Envisional, a subsidiary of NetNames, digital piracy of music, movies, and other copyrighted material accounted for 23.76 percent of Internet bandwidth worldwide and 17.53 percent of bandwidth in the United States. Commenting on the study, Republican senator Orrin Hatch of Utah, cochair of the International Anti-Piracy Caucus, argued that online piracy hijacks the earnings of artists and creators of movies, television, and music, which discourages reinvestment in new job-creating projects and thus weakens the American economy.

Internet book piracy affects millions of writers and publishers whose books have been scanned or their digital files copied and uploaded to websites that feature pirated works, sometimes alongside legitimate uploads. A study published in January 2010 by Attributor, which has since been acquired by Digimarc, found that writers and publishers had lost an estimated $2.8 billion to date because of Internet piracy, assuming that each illegal download represented a lost sale.

Internet theft of music is a constant challenge. The volume of pirated music and the drop in music industry revenues is significant, with rising digital sales not closing the gap. The Recording Industry Association of America (RIAA) reports that a decade after Napster introduced its file-sharing site in 1999, music sales in the United States dropped from $14.6 billion to $7.7 billion. In 2003, with the launch of the Apple iTunes Store, steady options for legal digital music downloads became available. It is illegal to download copied music files in the United States but legal to do so in Canada and Europe. In most Western countries, it is illegal to copy movies through Internet piracy.

The Motion Picture Association of America (MPAA) reports that in 2005, the major US motion-picture studios lost $6.1 billion worldwide to Internet piracy, and the worldwide motion-picture industry, including foreign and domestic producers, distributors, theaters, video stores, and pay-per-view operations, lost $18.2 billion. With these statistics in mind, the entertainment industry has countered Internet piracy of music, television, and movies with more legal options. As broadband speeds have increased, so too have the opportunities to legally watch television shows and movies online, whether via download or streaming video files. Netflix, which offers video-streaming services in addition to DVD rentals, announced in 2015 that it had over 57 million subscribers around the world, while also in 2015, the music-streaming service Spotify totaled over 75 million active users.

In 2013, major Internet service providers and the entertainment industry announced a partnership to attempt to curb piracy of copyrighted material online. Under the Copyright Alert System (CAS) or “six strikes” system, Internet subscribers accused of online piracy will receive a series of alerts each time they are found pirating material. The sixth copyright violation may result in the user being punished by the Internet provider. Subscribers who illegally share movies or songs can be punished by losing their Internet access or having the speed of their broadband downloads reduced to a crawl.

Responding to an outcry from Internet users and technology companies including Google, Congress defeated the Stop Online Piracy Act (SOPA) and the PROTECT IP Act (PIPA) in 2012. SOPA and PIPA would have imposed strict penalties on websites carrying copyright-violating material, which Google and other critics claimed would curtail free speech.

Reputable companies who advertise on the Internet have also been pulled into the online piracy problem. Because most Internet ad placement is generated automatically through algorithms, companies cannot always control where their ads are placed. Often these ads appear on sites that offer illegal downloads of music and films. A 2015 report issued by Digital Citizens alliance and MediaLink, a consulting firm, found that "theft" websites earned more than $200 million from advertising placed on their pages in 2014. This phenomenon has been termed "ad fraud" and is an effect of online piracy, illustrating the ubiquity of the problem.

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