Piracy websites pushing stolen music, movies and television programs earned $227 million in 2013, with large sites earning an average of $4 million in ad revenues.
In a report published by the Digital Citizens Alliance, a nonprofit focused on Internet safety issues, an examination of such websites showed a significant amount of the ads are from premium or secondary legitimate brand advertisers. Secondary ads are the non-premium legitimate ads, largely for legitimate gaming, gambling and content aggregator sites.
"Let's be clear, the quarter of a billion dollars that these sites make from ads in a year is a huge sum, but it's only a fraction of the financial losses inflicted on the creative economy and its workers. This goes beyond the old adage that crime pays," said Tom Galvin executive director of Digital Citizens Alliance.
While 30 of the largest sites that profit from ad sales earned an average of $4.4 million annually, P2P and BitTorrent portals earned upward of $6 million a year. Because many of these websites are providing stolen content, their profit margins can be as high as 80 to 94 percent. Thirty percent of the large sites were found to be carrying premium ads and 40 percent were carrying legitimate secondary ads.
The Alliance teamed up with media advisory firm MediaLink to do the report. They looked at 596 sites that provided stolen content and ranged from BitTorrent sites like Pirate Bay to video streaming sites like AlbaFile.
"The reality of it is, this is a big business," said Wenda Harris Millard, president and COO of MediaLink. "I think people thought it was a cottage industry."
While advertising bodies have tried to implement best practices when it comes to keeping their ads off such websites, the report states that the nature of today's online ad buying system -- which is largely automated -- makes it difficult to find anyone culpable for this kind of activity.
"Some of it happens without [advertisers and agencies] knowing it," Galvin said. "Second, the system doesn't give them a lot of power over where their ads are going to appear. We really sympathize with the advertisers. They're victims of a system that doesn't always work in their favor."
[Digital Citizens Alliance]
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Original headline: Piracy websites roped in $227 million in ad revenues in 2013
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