Piracy Observatory 2014: Piracy Exceeds Legal
Digital piracy is beating records in seriously prejudicing the cultural and digital content industries: in the past year (2014), 87.94% of content consumed was illegal. Only 40 % of all access to contents was legal. Likewise the percentage of consumers acceding illegally to content on the Internet rose from 51 to 58% with regard to the preceding year. These are some of the data collected by the Observatory of Piracy and Consumption Habits of Digital Contents for 2014, set up by renown independent specialised consultant GfK and presented today by the Coalición of creators and content industries.
Carlota Navarrete, Director of the Coalición, points out: “These data confirm the urgent need to apply the recently modified legislation with maximum rigour”.
The study has incorporated two important improvements allowing to get a more complete and accurate image of the problem of digital piracy: on the one hand, the incorporation of the television series and broadcasting of matches of the football league; on the other hand, data on the sources of income of the sites offering the hacked contents.
ILLEGAL ACCESSES, LOSS OF PROFITS AND ATTITUDES
In total, in 2014 there have been illegal accesses to 4.455 billion digital works for a market value of 23.265 billion euros. The total value of the loss of profits due to piracy amounted to 1.7 billion euros.
Illegal accesses are shared out as follows according to the type of content: music, 24 %; movies, 38 %; videogames, 11 %; books, 11 %; series, 26 %; and football, 18 %.
Every other consumer acceding to illegal content justifies its attitude with the argument: “I am already paying for my Internet connection” (50.8%). Furthermore, among the reasons set forth by the consumers, one has to emphasise the “velocity and easiness of access” (46%), “I don’t want to pay for content that might eventually not please me” (39%), “I’m not hurting anybody” (19%) and “there are no legal consequences for the hacker, nothing happens” (19%).
ACCESS MODES AND SOURCES OF INCOME
With respect to the access mode, one notes a noteworthy increase of the use of browsers to accede to the illegal content that passes from 46 to nearly 72%, whereby Google is utilised 9 times out of 10.
More than 71% of the portals from which illegal access to the content was gained, were funded by advertising. From such advertising, about 70 % were for online betting and gaming sites, about 43 % for dating sites and more than 33 % for adult content.
What is conspicuous is that more than a third of the advertising on pirate sites corresponds to consumer goods of prestigious brands in the food, fashion, insurance, telco sectors, etc., which confirms the urgent need to enhance collaboration between industry and advertisers In order to improve the ecosystem of online advertising.
In any case the sources of income of such sites are varied, whereby it should especially be emphasised that 38.4% of the consumers had to register themselves as users while providing personal data which pirates compile in very valuable databases used in commercial emailing campaigns
Simultaneously while nearly 70% of the consumers remember communication campaigns against gender violence and nearly 60% remember road safety campaigns, only 35.8% remember campaigns against digital piracy, holding the fifth position in percentage of knowledge (even behind the campaigns against the over-consumption of alcohol and promotion of recycling).
IMPACT ON EMPLOYMENT AND ON THE REVENUE OF THE STATE
The impact of piracy on employment shows figures even more worrying for the cultural and content industries: in a sector employing currently 62,652 direct workers, a scenario without piracy would allow to create 29,360 new direct jobs, which supposes an increase by 47%, and about one hundred fifty thousand indirect jobs.
Accordingly because of piracy, more than 343.7 million euros in VAT did not get into the Public Treasury, and neither did 219.3 million euros in Social Security contributions and nearly 65 million euros in personal income tax. This means that in 2014 the State failed to receive a total of 627.8 million euros because of illegal access to contents.
This amount would cover the average costs of 200,000 Erasmus grants for a whole year (in 2014 Spain handed out 40,000 grants of an average of 3,000 each).
ACCESSES AND ORDERS OF MAGNITUDE PER TYPE OF CONTENT
In 2014 one observed illicit access to 1.831 billion musical works online, for a market value equal to 6,773 million euros. The loss of profits amounted to 386 million euros. Less than 1 out of 10 consumers accessed music legally online, whereas 21% accessed illegal content. More than 46% of the accesses corresponded to works that had been commercially launched less than a year before.
All the music consumers are advanced Internet users, although in the case of illegal music online, the level of use of Internet is somewhat even. The youngest people consume more music online: between 16 and 34, illegal music; and between 35 and 44, legal offer, mainly online.
The volume of movies to which it was acceded illegally in digital form in 2014 amounted to 877 million; the market value thereof amounts to 6.139 billion euros. The loss of profits corresponding to that type of content was equal to 140 million euros.
36 % of the users accede illicitly to content, while 9% accede legally to digital movies. 36% of the accesses took place while the movie was still shown in cinemas. The illegal use is observed principally among young people aged between 16 and 34, in general with a more advanced level of Internet use.
25% of the users illegally access series on the Internet, whereby the chapters reproduced or downloaded illicitly amounted to 1.033 billion in 2014. Their market value amounts to 1.755 billion euros, and the lost profit in 2014 amounted to 166 million euros.
41.5% of the access took place during the period in which they were still broadcast on television. The legal series consumer’s profile is that of a man aged between 16 and 34 and an advanced Internet user. The profile of the consumer of illegal content online is that of middle-class men and women aged between 16 and 44.
In 2014 one counts 335 million of illegal accesses to digital books, for a market value of 2.680 billion euros that produced a lost profit equal to 21 million euros.
42.8% of the accesses materialised in contents less than one year old. 11% access books illicitly, while 8% access legal digital books. The person illegally accessing digital books is mostly a middle-class male aged between 16 and 44.
For what regards videogames, there have been 240 million illegal accesses in the past year. The value of such products amounts to 5.409 billion euros and lost profit online exceeds 38 million euros. The videogames sector is one that still enjoys a significant physical market, itself hit with lost profit of 188 million euros, i.e. 226 million for the whole sector.
More than 40 % of the videogames accessed illegally had been on the market for less than one year. 10% of the consumers access videogames online in an illicit way. The typical profile of the person buying or accessing videogames is an advanced Internet male user. In the age range the consumption by young people aged between 11 and 34 is to be emphasised.
In 2014 139 million matches were viewed illegally in more than 1.8 million Spanish households. The market value of said broadcasts exceeds 509 million euros. The loss of profits caused by that type of digital piracy amounts to 227 million euros.
The access to football is distributed between 6% of authorised access and 18% of illegal access. The profile of the consumer of illegal online football broadcasts is that of a man aged between 16 and 34 and an Internet expert user.
For what regards football, the most emphasised grounds to display hacked broadcasts are that “Access through other systems is very expensive” (72%), “footballers are already earning enough money” (68%) and “watching football without paying does not harm my team” (46%) “nor anybody” (45%). These reasons rely on the fact that, according to 33% of the users, “everybody is doing this”.
EFFICIENCY OF THE MEASURES
The most efficient measures against piracy would, according to the net surfers’ opinions, be to block access to the website offering the content and to develop social awareness campaigns (65%) and sanction the Internet access operators and providers (59%), either with fines (53%) or restrictions on the use of Internet (37%).