Concerned citizen (and anti-piracy group) the Digital Citizens Alliance has released a new report aimed at quantifying the revenues made by ‘digital thieves’, and have come up with the number $227 million.
The report, snappily titled ‘Good Money Gone Bad: Digital Thieves and the Hijacking of the Online Ad Business’ (the DCA is clearly a group who likes to wear its pro-copyright stance on its sleeve), starts by defining ‘piracy’ vey loosely; ‘the baseline was sites with 25 or more DMCA takedown requests in Q3.’
Without any direct means to measure how much revenue a website makes from advertising, the report divides sites into different sizes, with Small being fewer than 1 million unique visitors each month, Medium up to 5 million, and Large greater than 5 million, and then further subdivides the sites by ‘functional segmentation’.
Based on this model, the report analyses the number of advertisements typically found on a website, and considers factors such as number of page views and ad positions per page, and amount paid per thousand impressions, per click, on a banner or text link, minus the running costs of the website (e.g. hosting fees and human resources), comes up with the following figures:
Because of relatively low running costs, large torrent sites are estimated to make a whopping 94.1 percent profit!
The report goes on to identify the common practice of reselling ads as the root of the problem (other than the simple existence of the ‘pirate’ websites themselves), something that is completely beyond the control of the parent companies’ to regulate, and found that much of the revenue came from large brands that are household names across the world, including Amazon, Angry Birds, Dell, H&M, McDonalds, Motorola, Verizon, and many more,
‘Premium brand ads appeared on nearly 30% of large sites, highlighting the ineffectiveness of current approaches to protecting the brands’ reputation and value.’
The report’s main concern is the damage done to legitimate brands through association with ‘dodgy’ websites,
‘Premium brands are those easily recognizable companies familiar to most consumers, and which suffer reputational damage when their ads appear on content theft site, often alongside ads for illicit sites and services.’
It therefore concludes that ‘just as brands do not advertise on porn or hate sites, they can take steps to assure they are not on content theft sites,”
We however draw somewhat different conclusions. For a start (if the figures in the report even vaguely reflect the reality of the situation), visitors to these ‘shady’ websites, who see the ads and presumably click on them enough to help generate such massive revenues, are unlikely to attach such negative connotations to seeing the brand name on that website.
In addition to this, the figures show how much legitimate revue can be generated when copyright enforcement is not an issue, pointing the way to how business can monetize in a post-copyright world, and how important the ‘piracy’ business is the world economy.