Piracy websites make a whopping $4.4M annually on ads: report
Makers of original content don't only lose money from pirated copies of their work. A report entitled "Good Money Gone Bad" published by the Digital Citizens Alliance or DCA showed that in 2013, sites that steal content also make an estimated quarter of a billion dollars from advertisements, VentureBeat reported.
DCA said in its report, "Crime can pay when you can steal other people's content." According to DCA, around $4.4 million is earned each year by the 30 biggest sites that pirate content from movies and television shows from ads. The ad revenue for BitTorrent and P2P portal sites, considered as the more well-known kinds of this type of websites, can even go up to over $6 million annually. Ad money is even earned by a small piracy site to the tune of over $100,000 a year. Profit margins of these sites run anywhere from 80% to 94% since they obviously don't pay the content they pirate, the report said.
Research firm MediaLink LLC, who did the study in behalf of DCA, covered 600 websites for the study. It found that big brands like e-commerce giant Amazon, fast food chain McDonalds, Lego and Whole Foods had ad placements in nearly 30% of the big piracy sites, the report said.
In an interview with VentureBeat, DCA Deputy Executive Director Adam Benson said, "A lot of companies have no idea that their ads are showing up on those sites." Automated ad placement is the main reason for this. According to media strategy company Magna Global, around 53% of placements for online ads in the US was placed on auto mode in 2013. The number of automated ads is forecasted to rise 83% by 2017, the report said.
VentureBeat reported that online piracy has caused a greater degree of harm these days. The DCA report said, "The harm caused by content theft now extends well beyond the music and movie industries. It robs designers who rely on the Internet to sell their creations, hurts brands that find themselves associated with illegal and inappropriate sexual and violent content, funds online criminals and provides seed money for other illegal activities."