In 2019, BREIN, the MPA and ACE teamed up to take down Moonwalk, a pirate CDN system that provided back-end services to large numbers of pirate streaming sites.
Moonwalk's business model was of particular interest since, in addition to providing back-end services, it also supplied huge volumes of pirated content, including more than 26,000 movies and 10,000 TV shows to around 80% of Russian streaming sites.
In the wake of the enforcement action, more 'pirate' CDNs shut down but these were not the only players in the market, with others remaining operational.
Jolly Roger's Patrons and Beyond
Last summer, cybersecurity firm Group-IB published an interesting report into the activities of players in the 'pirate' CDN market, detailing how platforms including Collaps, HDVB, and VideoCDN, offered an all-in-one solution by providing content, advertising and embedded video players to pirate sites.
Today, the company follows up with a new report titled "What Makes Jolly Roger Sad", revealing that revenues for pirate entities in the video space are down for the third successive year.
In 2017, revenues for players in the pirate video streaming sector were estimated to be around $85m, reaching a peak in 2018 at $87m. In 2019, the year that BREIN, the MPA and ACE took legal action against the major players, the market took a significant hit, with revenues down 27% to around $63m.
In 2020, the revenue generated by streaming platforms contracted again, albeit by a smaller amount. With a 7% drop when compared to the previous year, revenues stood at an estimated $59m. According to Group-IB, several factors were at play.
"Online pirates were not quite successful in fully restoring the video content database after the elimination of the CDN big three. After Moonwalk, HDGO, and Kodik were shut down, the geographical scope of pirate CDNs has been quite limited, with three locations: the Netherlands, Lithuania, and Russia (Mnogobyte/ZeroCDN)," Group-IB explains.
"Furthermore, they have lost the advertising profits and found themselves in a competition for viewers with legal online streaming platforms which were able to increase their audience during the pandemic."
Boost For Legal Streaming Platforms, Pirates Continue to Search
Citing research carried out by TMT Consulting, Group-IB says that during the height of the coronavirus pandemic in 2020, the number of people using legal streaming services reached 63 million viewers, an increase of 17% over the previous year. This led to legal streaming services generating revenues of around $365.7 million.
However, even with this increased interest in legal supply, pirates were still keen to find content for free, with search engines such as Yandex (90% of traffic) proving a popular port of call.
"The number of searches in popular search engines in Russian for free trending movies and TV shows on illegal websites has also grown," Group-IB notes.
"The figures show a 12% increase compared to 2019, amounting to 11.8 billion search queries (compared to 10.5 billion in 2019). The number of searches for illegal content rose to a record-high 1.4 billion intentions in April 2020. At times, servers streaming illegal content failed to deal with such a high influx of viewers."
Pirate Services Take Revenue Hit But Continue to Innovate
Following the removal of Moonwalk, HDGO, and Kodik from the market, plus increased pressure from financial institutions and regulators, Group-IB observes that advertisers began to show less interest in the pirate market. In 2020, the average CPM (cost per mile) fell by 16% to $5, down from $6 a year earlier.
The replacement 'pirate' CDNs also failed in their efforts to properly fill the gap in the market left by the 'Big Three'. According to Group-IB, even when the content offered by the current eight largest CDNs is added together, they only manage to offer around 50% of the content offered by Moonwalk, HDGO, and Kodik.
That being said, pirates didn't stand still. In 2020, Group-IB says that pirates innovated by integrating CDNs with fully automated streaming services.
"The first mass prototype was the Cinemapress script and about 400 pirate streaming services were based on it. In April 2020 Cinemapress was replaced by Yobobox with its 250 domains discovered so far, which — unlike its predecessor — is entirely free and integrated with Collaps, one of the largest CDNs," the company notes.
Another innovation involves techniques to reduce the effect of 'pirate' links being deleted from search engine results as required by the country's anti-piracy memorandum. While millions of infringing links are being deleted by search engines such as Yandex as part of the agreement, which in theory should make pirated content harder to find, pirates are adapting.
"Experts' biggest worries are tied to the fact that in 2020 Russian-speaking video pirates learned to quickly detect the links eliminated by the anti-piracy memorandum, to generate duplicates in real time (using alternative URLs), and use mutating links (scripts for automatic changing of paths in links) resulting in a decreased effectiveness of countermeasures," Group-IB notes.
Both Legal and Illegal Services Have Increased Their Audiences
Another interesting detail in Group-IB's report is that, while pirate sites are less profitable and legal services are doing better than ever, pirate sites are still growing their audiences.
"In 2020 both legal and illegal streaming platforms significantly increased their audience but failed to get the maximum benefit out of it", says Dmitriy Tiunkin, Head of Digital Risk Protection Europe at Group-IB.
"We witnessed pirates recover from the three largest CDNs being shut down. Pirates are restoring their technical capacity and increasing opposition to copyright owners. Some digital pirates use mutating links, domain changes, and decentralized CDNs to bypass the anti-piracy memorandum, thereby undermining attempts of manual regulation and anti-piracy techniques that were relevant several years ago."
'What makes Jolly Roger sad. The state of video piracy in Russia' can be found here.
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