Piracy: Dispelling myths, why people pirate and the reasons behind the new laws

PiracyPiracy hit the headlines once again this week after new website blocking laws passed parliament. In this in-depth look at the issue, Miranda Ward asks who pirates content, what impact it has on the media industry and what practical steps can be taken in the fight to protect copyright. 

“I pirate because it allows me to access television shows almost immediately after they air overseas,” says Elise, a 31-year-old school teacher.

“I do it simply because it has become habit. If TV Networks had adapted to the market quicker, like five years ago when broadband became fast enough to pirate, and had more diverse programming – then maybe I would not have started pirating.”

On Monday night, the Senate passed new legislation aimed at stopping the likes of Elise from accessing pirated content online. But, already, critics have noted the new laws have potential loopholes and could even drive people towards using virtual private networks (VPNs) in an attempt to continue accessing pirated content

The latest PricewaterhouseCoopers Media Outlook report noted, just last week, that an estimated 680,000 Australian households accessed overseas-based video content via VPNs in November 2014.

And while not all 680,000 households were using it for pirated content, it is increasingly evident that Australians are among the biggest pirates in the world.

Aiden gillan gives a stand out performance as Lord Baelish

Game of Thrones

Take, for example, pirated copies of season five of HBO favourite Game of Thrones.

Media intelligence firm TruOptik recorded 32m downloads of the first four leaked episodes along with the “A Day in the Life” documentary, reported Torrentfreak, with the first episode downloaded over 13m times.

Australia also had the most downloaders per capita and was ranked seventh on the list of people downloading the show.

Who pirates?

IP Awareness Foundation Australia executive director Lori Flekser told Mumbrella that it is a misconception that “everyone out there” is pirating.

“It is 29 per cent of adults aged 18-64 and 26 per cent of 12-17 year olds, so it is certainly not a mainstream activity yet,” says Flekser.

According to IP Awareness Foundation research conducted last year, Australia still has more non-pirates than pirates, with 60 per cent of adults aged 18-64 saying they have never pirated film or TV content online.

Source: IP Awareness The research summary 2014

Source: IP Awareness The research summary 2014

“Having said that, it is growing amongst adults and amongst 18-24 year olds it is the norm, it is more than 50 per cent,” she says.

“We know this is a real issue.”

How do consumers pirate? 

For most consumers pirating needs to be easy, with online downloading, torrents and streaming the usual choices.

Nicholas, a 27-year-old IT professional, says torrents are his “primary downloading mechanism”, with Pirate Bay and EzTV the preferred choices.

“I do use a Virtual Private Network (VPN),” said Nicholas, explaining he chooses to do so in an effort to remain anonymous, particularly in the wake of the Dallas Buyer Club court case which is now seeing rights holders writing to consumers demanding compensation.

“There is too much talk of people having their data looked into either by police or movie studios, and then either searched, watched or sued.

“I like to think of the internet as not a ‘nanny state’,” he added.

EFTM technology commentator Trevor Long explained a VPN allows consumers to circumvent geo-blocks and potentially legislated ISP blocks.

“A VPN is a perfectly legitimate tool particularly for international businesses to create one computer network,” he said.

“When you’ve got an office in San Francisco and Sydney, you often have two computer networks that don’t interact with each other. You use a VPN between them and it links the internet and everything can be shared. They see and act as if they’re in either office sharing files and accessing those remotely. Executives who travel might use VPNs so they can get access to their office and see their files.”

And pirates are using a VPN for the exact same purpose.

“Except pirates are using a VPN to connect to something that isn’t their own office, it’s just a server on the other side of the world that tricks the internet into thinking they are in that location. Someone in Sydney can trick the internet into thinking they’re in whatever location the VPN is in.

“Pirates will get around the government’s block by VPN-ing to another country therefore bypassing any blocks and restrictions that get put in place by the legislation,” Long added.

When asked if the government could crack down on VPN use to tackle piracy Long said it would be too difficult.

“It would either create a ridiculous amount of red tape for businesses to justify their VPNs or a large amount of bureaucracy to track down people utilising them,” he said.

Seven piracyAt around US$40 a year, the use of a VPN indicates pirating isn’t about the cost of local content.

“A VPN provides choice. It allows me to watch and access what I want on demand,” says Lachlan, a 27-year-old HR professional.

“I am happy to pay for entertainment and do pay for the US Netflix, but I am driven to download and stream TV shows from overseas as the other options at a reasonable and comparable price are extremely limited in Australia.”

The new legislation, which passed on Monday evening, stopped short of covering VPNs which, while used for a range of legitimate purposes – typically to create secure connections – are also used by pirates to circumvent systems designed to preserve copyright in various regions globally.

While pay-TV industry body ASTRA and Foxtel have both admitted the VPN could be a “potential” loophole in the law, IP Awareness Foundation Australia’s Flekser is dismissive of such an idea.



ASTRA chief executive Andrew Maiden told Mumbrella yesterday: “The VPN issue could be a problem but it’s no different in theory to word getting around that a supermarket has a faulty checkout where you can take goods out without paying for them.

“I’d say that boasting about a potential VPN loophole is like boasting about the ability to steal from a supermarket or a department store. Just because clever people may be able to circumvent the law doesn’t make it right.”

Foxtel said it will monitor the VPN issue to see how the law works in practice, acknowledging they “didn’t intend this law to be used specifically against VPN” because of the many legitimate uses of VPN.

However, Flekser is adamant there is no VPN loophole, saying: “There is no VPN loophole, it’s just a furphy created by paranoid pirates.

“VPNs don’t fit the primary purpose test – they don’t exist for the purpose of piracy.

“Yes, there are people who use them for piracy and yes, they’re part of the excuse people give for why this won’t work. But most people don’t use a VPN.”

Flekser does not believe the new legislation will lead to people investing in a VPN to get around the law, saying only persistent pirates use VPNs.

“Persistent pirates and people who are just going to do it regardless of what the law says and who understand technology, they’ll continue to do it. They’ll use their VPNs to access legal content overseas and potentially illegal content.

“For most people a VPN is a perfectly legal device.”

The excuses for pirating

Price and access are well-worn excuses of prolific pirates and IP Australia’s Flekser says the reality is that it is not about money or access, but rather a perceived right to see it for free.



“Pirates are not generally poor,” she said.

“Our most prolific pirates, what we call persistent pirates who pirate at least once a week, are most likely to be male, most likely to be educated, they are nine times more likely than the average person to have a degree and 17 times more likely to be in full time employment.

“It’s simply not about money.”

This viewpoint was reinforced by some of those polled by Mumbrella. Nicholas, the 27-year-old IT professional, said access and convenience was a major driver of piracy for him.

“I currently have it set up so that all the shows I am currently watching get added to a list of things that I automatically download,” he said.

“Once they become available online they are downloaded and ready for me to watch when I am ready – no waiting months for things to be scheduled on TV. I can watch them when I have the time. It’s about convenience mainly.”

Flekser also dismissed the usual reasons of access and price, arguing the rate of pirating is on the rise due to the diminishing value placed on content.

“A lot of teenagers and parents say ‘why would I pay if I may not like it?’ Or ‘why would I pay if I’m only going to watch it once?’” she said.

“Nobody would dream of walking into a restaurant and eating a meal and saying ‘I’m not going to pay because I don’t like it’ but that seems to be the sensibility when it comes to film and TV, the sense of I’ll try it before I buy it.

“I’m more worried about a general diminishing of an attitude around this issue,” she added.

Flekser said it is becoming “harder and harder to argue” price as an excuse.

Game of Thrones will now be offered through Foxtel for $30 a month. So for three months’ subscription to cover the series that’s $90. That’s just under $7 an episode,” she said.

“Those episodes cost over $6m to make each, Foxtel has paid an enormous amount of money to air them. But then people say they don’t want to give Rupert Murdoch my money. The excuses just keep coming.

“The reason people pirate is because it’s free,” she says.

According to IP Australia Foundation research, if people were offered content at the same time, the same date as the US for just $2.99 an episode the majority of people would still choose to pirate.



“It’s not about access, it is about cost. People don’t want to pay,” Flekser said.

Cordell Jigsaw Zapruder managing director Nick Murray was in agreement, saying the price point argument is just a flimsy excuse.

“If you made it $2 a month people would still pirate it,” he said. “$10 a month is such a small amount of money. It’s about the price of a one-way, single section bus trip a week, it’s a pathetically low amount of money, it’s too low. I don’t think those people who are pirating will stop doing it.”

The impact of pirating on the film and TV industry

Flekser warned that directors of pirated films may be unable to secure enough funding to get future projects off the ground.

Pirating causes films to have a lower success at the box office, which causes investors to be more wary of funding projects of directors who have had commercially unsuccessful films in the past.

“Films are funded by a group of investors, both globally and in Australia as well. Those investors need to get their money back from recouping the revenues from the films and a very simplistic means is by box office,” said Flekser.

“Box office is still the primary means by which most films recoup their money, and at any rate it is the primary motivator of other revenue.”

A good box office, Flekser explained, determines if a film gets sold to television and for what price it gets sold, if a film has a big or no DVD release and what price is negotiated for a video-on-demand service.

“So the success of a box office release is paramount in recouping monies down the track,” she said.

“Very simply put, film investors will be reluctant to invest if the films don’t make money.

“Major studios are now taking less risk in the films they invest in. Every film that is not made that is hundreds and hundreds of jobs lost to the industry,” Flekser added.

“Now that Australian films are starting to be pirated, those film makers have not succeeded at the box office, their ancillary revenues will be affected as will their ability to raise money for their future films.”

House of HancockCJZ’s Nick Murray said the only time a content maker benefits from piracy is when it increases the profile of the content internationally.

“Anything else detracts from our ability to earn income,” he said.

“We recently found someone had put House of Hancock up on YouTube, so that straight away is going to detract from either people watching it on Channel Nine’s catchup service, watching repeats on Gem or buying the DVD.

“As soon as that happens it has the potential to have direct impact on the people who finance production in Australia,” he added.

The economic impact of pirating

According to a study commissioned by the Australian Content Industry Group, it was estimated that in 2010 internet piracy took $900m out of the Australian economy and was responsible for the loss of more than 8,300 jobs.

The key findings of this study was that 4.7m Australian internet users accessed pirated content. It predicted by next year that around 8m Aussie internet users would be accessing online pirated content with the annual value of lost retail to Australian content industries expected to hit $5.2b.

The findings were supported by another report, a joint study undertaken by Ipsos and Oxford Economics on behalf of Australian Federation Against Copyright Theft. It was published in January 2011 and put the economic impact of piracy at a loss of GDP of $551m, with $193m in potential tax losses.

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Source: IP Awareness The research summary 2014

How greater access to content can help combat piracy

SVOD players have been heralded as the solution to the piracy problem, providing consumers with fast access to content when and wherever they want to watch. But is it the full answer to an ever-growing problem?



Nick Forward, Stan content and product director, said “at a very basic level” streaming gives consumers “legal options for the first time at a more competitive price”.

Indeed, according to Netflix chief content officer Ted Sarandos the launch of Netflix has seen Bittorrent traffic drop within the territory.

He recently told Stuff.TV: “One of the things is we get ISPs to publicse their connection speeds – and when we launch in a territory the Bittorrent traffic drops as the Netflix traffic grows. So I think people do want a great experience and they want access. People are mostly honest.

“The best way to combat piracy isn’t legislatively or criminally but by giving good options. One of the side effects of growth of content is an expectation to have access to it. You can’t use the internet as a marketing vehicle and then not as a delivery vehicle.”

Stan’s Forward is in agreement, saying streaming services solve the “very well-warranted consumer complaint” regarding accessing content at the same time as everybody else.

“If you look at the two big issues that customers identify as being their major concerns – availability of content and price – we answer that very, very strongly. We do and Netflix do,” he said.

However if people want to continue to pirate there’s not much else streaming platforms like Stan can do, Forward admitted.

“I will give you a compelling product for $10 that answers those two issues. If people continue to pirate outside that, there isn’t a lot we can do to stop that,” he said.

Forward also placed emphasis on the importance of streaming platforms reinvesting in the local production industry with original series.

Stan has confirmed a six-part series called Wolf Creek, which it is working with Nine to produce.

“Local content is important not just in terms of reinvesting in the Australian industry but also showing to our customers that’s what we are, we are an Australian company and the content we know that will work best for an Australian audience is content made for them,” he said.

Stan is also looking at how it can help content makers use a multi-platform release strategy to reach a wider audience.

The platform hosted New Zealand film Sunday back in May, launching it on the same date that it had its theatrical release, a DVD release and a video-on-demand release via platforms such as iTunes and Fetch TV.

“There’s been some really interesting multi-platform release strategies overseas, but up until now Australia hasn’t had a wide-enough range of services for that to work,” said Forward.

“For films on this kind of scale we can help bring them to a broader audience than traditional release methods. What we can do is give them a good platform and hopefully get as many people as possible seeing the film.



Sunday producer Dustin Clare said the multi-platform strategy was to do with piracy and the chatter around piracy being a negative.

“It was to do with all the noise about piracy in the industry and seeing piracy as a negative thing and we thought what if we shine a positive light on it because it’s really about content being restricted to people who want to watch it and can’t get their hands on it.

“So we thought we could make content available to everyone so they can see it whenever they want to watch it on whatever platform.”

Clare said the team hopes the strategy will give the film “a competitive voice in Australia against the big American product that have huge marketing and distribution budgets”.

On the choice of Stan over other streaming platforms, Clare said it came down to a relationship with Nine and Stan and Nine’s dedication to Australian content.

“I’m aware they are actively commissioning and producing Australian content. They are not just buying content, they’re trying to actively contribute to storytelling in this country which is important so we don’t just get swamped by American content,” he said.

“Stan is doing that, they’re commissioning their own shows, they pay tax and they charge their customers GST. Shouldn’t we all be supporting that?”

Miranda Ward is a reporter with Mumbrella 


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