Different types of video piracy are driven by very different behaviors, and understanding how to combat each in turn can help mitigate the problem.
Summary
- Video piracy varies widely, from password sharing (considered a minor crime) to organized crime syndicates running fake streaming services, each driven by different consumer behaviors and motivations.
- Password borrowers (15% of consumers) are primarily motivated by cost savings, with many expressing frustration over rising streaming prices, while pirated content watchers (7% of consumers) seek quick access to hard-to-find content.
- Key characteristics of password borrowers include a desire to avoid subscription costs and a tendency to cancel services when prices rise, whereas pirated content watchers are more critical of the value offered by streaming services and prefer pay-per-view options.
- To combat video piracy, streaming providers should consider partnerships with security experts, focus on affordable pricing strategies, and implement educational campaigns to highlight the risks of piracy to consumers.
Different forms of video piracy
There is more than one form of video piracy and more than one attitude that drives it. If we think of video piracy as a sliding scale, at one end we have password sharing. Most people will not even consider this piracy. It falls into the category of a ‘normative crime’, which means that when so many people do something it ceases to be thought of as illegal by the general society. Breaking the speed limit while driving is often given as a typical example of this: everyone does it, so where is the harm?
At the other end of the piracy scale are the organized crime syndicates that effectively set up entire streaming services from scratch, including sophisticated websites, customer portals, subscription offers and more. Sometimes the only detectable difference between them and the legal services they so closely imitate is that they don’t pay for the content they sell. For consumers, it can often even be hard to tell the difference.
Between them is a range of different behaviors, covering everything from buying a ‘cracked’ streaming device, to following a link on social media leading to a real-time stream, or signing up for a VPN to break the geo-blocking on specific content, and many more.
The behavior is widespread. According to analyst Deloitte, a massive 25% of US consumers it surveyed have used other people’s streaming passwords or watched pirated content in the last 12 months. What is genuinely interesting to note, though, is that the analyst has identified very different motivations behind two of the main forms of piracy. This analysis of motivations is not only interesting but can in turn help operators shape a response to the threat.
Different piracy motivations
In short, password borrowers are driven by cost savings. Pirated content watchers, meanwhile, are motivated by quick access to hard-to-find content.
Of the two different behaviors, password borrowing is definitely more prominent among consumers than watching pirated content. Fifteen percent of respondents in the Deloitte data have used someone else’s SVOD password (though it would be interesting to measure how this has changed following the successful password sharing crackdowns first initiated by Netflix last year - it may once have been much higher).
In contrast, only 7% watch pirated TV shows or movies. 4% do both. Unsurprisingly, Gen Z and Millennials are more likely to report being password borrowers and pirated content watchers. This is likely due to a combination of tech savviness and having a lower disposable income than older demographic cohorts.
The data shows that Password Borrowers are primarily motivated by financial considerations. These are some of the key points regarding their behaviors:
- 35% of Password Borrowers cite a desire to avoid paying for streaming services
- Password Borrowers subscribe to a similar number of services as the average consumer
- 73% express frustration with rising entertainment service prices
- 53% have canceled a paid streaming service in the past six months (compared to 40% of overall consumers)
- Over half would cancel their favorite SVOD service if the monthly cost increased by $5
The key takeaway here is that they are looking to maximize their entertainment options while managing costs.
Pirated Content Watchers, on the other hand, have quite different motivations. Again, here are some of the key data points.
- 40% of them cite quick access to desired content as their primary reason (vs. 18% of password borrowers)
- 50% believe SVOD content isn't worth the price (compared to 36% of overall consumers)
- 46% prefer pay-per-view options for individual shows and movies over monthly subscriptions
- They also have a higher churn rate (62%) and churn-and-return rate (51%) compared to overall consumers
All this suggests that pirated content watchers are more critical of streaming services' value propositions and are willing to seek alternatives to access the content they want.
Here is how the different attitudes contrast across the two different groups.
Taking action against video piracy
Both groups present challenges for streaming providers. Password borrowers may be reaching their spending limit on subscriptions, while pirated content watchers seem to desire more flexible, on-demand access to specific content.
So, what can broadcasters and operators do? There are definite strategies that will work.
First off, a partnership with security experts and a greater focus on holistic anti-piracy strategies is an essential move. As already discussed, moves by Netflix and others to persuade password sharers to pivot to paid sharing have been successful. This can be further augmented by PR and educational moves that highlight the dangers of piracy to consumers.
Increasing affordability is another proven tactic, as this removes the initial incentive for piracy in the first place. While finding the right service bundling / offering balance here can be difficult, there are an increasing number of options available. These range from per-per-view options for tentpole events to the rollout of a differentiated model featuring lower cost and/or ad-driven tiers. These can even be extended further to become genuine free, ad-supported streaming TV (FAST) services, especially given the increasing sophistication of ad tech stacks and the growth of targeted advertising.
Indeed, analysis shows that FAST could play an important role here. According to Deloitte, password borrowers and pirated content watchers are both more likely than the average consumer to watch a FAST service. This is an opportunity for operators. Once customers are enrolled in an overall content ecosystem, there are many more opportunities to try and transition them into paying consumers via targeted offers and more.
25% of consumers watching pirated content represent millions of viewers and millions in lost revenue. But, by examining their data and understanding precisely what forms of piracy they are being most affected by, operators can match their offers to suit the type that is most impacting them, combat video piracy, and try and reduce those numbers.
