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New study estimates value of ad income to piracy sites

By | Published on Wednesday 19 February 2014

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When facing criticism from the content industries for not doing enough to remove piracy sites from its search results, Google’s line has usually been “you should be going after the money”. That is to say, rather than getting bothered about all the links to unlicensed content sources that appear in Google searches, labels, studios and publishers should focus on the revenue streams enjoyed by the actual piracy sites, which often includes ad income.

And to be fair, the anti-piracy brigade within the music business has been looking into the presence of ads on websites that provide links to unlicensed content, and into what can be done about it. And support for that action might now increase after a report from US consumer group the Digital Citizens Alliance, which estimates that 596 piracy sites which it surveyed are together generating about $227 million a year in ad revenues, with the top 30 sites bringing in around $4.4 million each. And because said sites have relatively few running costs, the DCA reckons these operations could be operating at an 80% to 94% profit margin.

The report also reckons that 30% of the larger piracy sites carry ads for “premium” brands, despite efforts by ad agencies to ensure their banners do not appear on such websites. Nearly 40% carried “legitimate secondary ads”, the report added. DCA Executive Director Tom Galvin said: “These premium ads are on sites that are stealing content, which gives the sites the incentive to keep going, and at same time, it damages the credibility of the brands”.

Meanwhile Wenda Harris Millard of MediaLink, the company that carried out the research on behalf of the Alliance, added: “The reality of it is, this is a big business. I think people thought it was a cottage industry”.