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FYI

Website Blocking: The Devil's In The Details

Netflix regards video piracy (which is predicted to cost over the top streaming services more than USD$50B between 2016 and 2022) as one of its biggest competitors.

Website Blocking: The Devil's In The Details

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(Anti-copyright activist Michael) Geist claims that piracy isn’t a problem in Canada. He made this type of argument before to oppose changes in copyright that would provide rights holders tools to go after enterprises engaged in the business of piracy. For example, he argued that peer-to-peer (P2P) file sharing of music actually benefitted the music industry in an attempt to thwart legislative intervention to reform the Copyright Act. He continued to rely on a biased and flawed study during the copyright reform process leading up to Bill C-11 until it was authoritatively debunked with a showing that, unsurprisingly, P2P downloads reduced demand for the legal sales of CDs.


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Geist also opposed amending Canada’s laws to curtail counterfeiting, telling a Parliamentary Committee “there is likely to be limited economic impact in Canada from counterfeiting”. He was the only witness to take this view and his evidence was rejected by the Committee finding that “there is no doubt that counterfeiting and piracy cause economic harm to intellectual property owners, private companies and Canadian governments.” Parliament eventually enacted the Combating Counterfeit Products Act, which brought Canadian border measures to, or closer to, international standards.

Geist now opposes the Fairplay proposal asserting that piracy is not a concern because Canada is “well below global averages when it comes to things like downloading music from unauthorized sites, stream ripping so-called from sites like YouTube.” Specifically, he says, because only 33% of Canadians engaged in digital music piracy in 2017 (which is up from 27% in 2016, and is a staggering 53% among 16-24 year olds) and because only 27% of music is stream ripped from sites like YouTube. But, why does he believe that this is an acceptable level of theft? Even if this represented the only losses due to illegal access in the music industry, what reasonable person would countenance a one-third market share loss due to theft?

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For film and TV content, Geist seems to contend there is no piracy problem at all. He argues that declining revenues in traditional television packages are not “lost revenues” due to illegal streaming but rather that “the money is actually going” to paid Internet streaming services such as Netflix. He even favourably quotes from a report that film and TV piracy has been “made pointless” given unlimited viewing on Netflix. These claims do not stand up to even cursory scrutiny.

Netflix itself regards video piracy (which is predicted to cost over the top streaming services more than USD$50B between 2016 and 2022) as one of its biggest competitors. Netlflix’s concerns about copyright piracy are backed by studies on video streaming that show that programs are accessed more frequently from illegal rather than from paid legal sources. For example, the 7th season of Game of Thrones had 1.03 billion illegal views, with more people watching the blockbuster series illegally rather than legally through HBO.

Geist’s claims also ignore the studies that show the extent of piracy in Canada and the economic harm caused to the creative industries by it.

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He disregards, for example, the report from anti-piracy analyst firm MUSO filed with the CRTC that “Canada is one of the highest consumers of global web streaming piracy”, making 1.6 billions trips to web streaming sites in 2016. Contrary to his claim, Canada is also well above the global average, being in 8th place globally in piracy visits, totalling 1.88 billion visits to all piracy sites in 2016. This is significant because of the link between levels of piracy and loss of legitimate sales of copyright content.

A recent study by Sandvine estimated that approximately 6% of all households in North America currently have a fully loaded illicit streaming device called Kodi configured to access unlicensed content. Another study, found that 6.5% of North American households are accessing illegal TV piracy subscription services. It estimated that this piracy costs Canadian and US broadcasters and other communication service providers up to five billion dollars a year.

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Studies on site blocking have not only shown that they reduce traffic to blocked web sites, they also show that piracy hurts sales of legitimate content and services by showing that website blocking increases access to content through legitimate services. For example, a study conducted by Carnegie Mellon University’s Brett Danaher of the blocking of only 53 piracy websites in the UK showed it caused a 6% increase in visits to paid legal streaming sites like Netflix and a 10% increase in videos viewed on legal ad supported streaming sites like BBC.

Geist says that the piracy issue is “fundamentally” a “business model” issue. He stated in an interview with the CBC, “fundamentally, it’s about business models that will solve these issues”. Yet, he acknowledges that Canadians have a wide variety of choices to access content legally including a plethora of legal streaming services such a Netflix.

The problem is not a lack of business models. Canadian businesses have and are innovating to bring exciting copyright content to Canadians. The fundamental question is why the cultural industries should have to compete with business models built on content theft… – In part reprinted from Canadian IP lawyer Barry Sookman’s blog post, Why the CRTC should endorse FairPlay’s website-blocking plan: a reply to Michael Geist

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Charlotte Day Wilson
Emily Lipson

Charlotte Day Wilson

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