A new analysis predicted that pay-for-TV companies and over-the-top (OTT) media services experienced $9.1 billion in lost revenue due to piracy and sharing account passwords.
The analysis, compiled “360 Deep Dive: Account Sharing and Digital Piracy” by Parks Associates, a research and consulting company that specializes in technology, found the amount of revenue lost will increase to $12.5 billion in 2025 -- an increase of 38 percent. The study stated that 27 percent of American broadband households “engage in some form of piracy or account sharing.” It also found 20 percent of U.S. broadband households "use a piracy app, jailbroken device or website."
"Piracy is a complex issue that cannot be addressed with a single solution or by targeting a single use case," Brett Sappington, the senior research director and principal analyst of Parks Associates, said in a statement. "Most pirates also subscribe to at least one OTT service. They are not simply thieves looking to steal content but are video enthusiasts who engage with many different services. OTT services could better reach these consumers through ad-based content, which also aligns with these users' general belief that 'movies/music should be given away for free.'"
The research also found 19 percent of broadband households have had issues with an online video service. The study said men under the age of 35 and those living in low-income households were pirating content “at a disproportionate rate.”
"The penetration of OTT services was up 13 percent over the past year while free services was up 23 percent over 2018," a press release from Parks Associates stated.
"Growing subscriber numbers and an increased number of services signal a very healthy OTT market, but more services and aggressively promoted content could incite more piracy over time," Sappington said. "Consumers will hit an upper limit to spending eventually. When that happens, they will resort to pirate tactics to get the content that they want, particularly for sports and other content where trials are not available."
There are more than 235 OTT services that target U.S. consumers while streaming services from Disney and NBCUniversal were slated to launch in the future, according to Deadline.