Video Streaming Eradicates Piracy, Threatens Traditional Distribution

December 16, 2009

This article is included in these additional categories:

Analytics, Automated & MarTech | Broadcast & Cable | CPG & FMCG | Media & Entertainment | Retail & E-Commerce | Television

Video streaming in the US market is quickly eradicating illegal content downloading, but also is threatening traditional packaged sales of music, TV and film, according to the most recent findings from the Global Web Index, a collaboration between Lightspeed Research and Trendstream.

According to the research, watching online video has become mainstream, with almost 70% of US internet users watching video clips, 28% watching full-length TV and video programming and 19% sharing videos. Nearly three in 10 (29%) of US internet users have downloaded free TV shows/films.

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US Leads in Paid Music

The global research showed that after South Korea, the US is the most advanced market in terms of the purchasing content online. It has the highest number of internet active users – those who spend more than four hours a day online – that are willing to pay for online content. The results suggest that 39 million internet users have paid to download legal music and 33 million have streamed music through a personalized music platform. In comparison, 28.9 million have downloaded illegally either through a peer-to-peer sharing network or a website offering free illegal downloads.

“Thanks to the rise of online services such as Spotify, Hulu and of course YouTube, the environment has been created where you can stream almost all the content you would ever want,” said Tom Smith, managing director of Trendstream. ” If everything I want is available on demand, the concept of ownership is diminished. I no longer need to have it on my hard drive. I just play what I want when I want.”

Free and Instant Top Factors

Although the US market has less issue with staggered content released and benefits from more legal outlets than do other countries, the lack of legal online alternatives has nonetheless created a market for piracy. However, the research shows that more than half of people downloading illegal media content are not driven by the desire to access it for free. Many are more interested in viewing the content as soon as it is available. While consumers don’t like using peer-to-peer sites to access content, they will use them when they can’t find what they want any other way, the study found.

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“This does not mean consumers won’t pay for their online content,” Smith said. “When content is great and it can be accessed when and how people want, they will pay.”

Smith suggests that instead of taking legal action against isolated individuals, content providers should take the opportunity to get their content online in a relevant format and at a fair price. “If they do that, people will no longer seek illegal alternatives. In a world of instant information and content, media owners are missing out on millions of dollars of revenue by restricting content through time delays or by relying purely on traditional media delivery,” he concluded.

Earlier research by Ipsos revealed similar insights about people’s willlingness to pay for music if it is legally available for a fee. It found that though nearly one-third of digital music downloaders and streamers in the US currently acquire songs illegally using peer-to-peer networks, new ad-supported models for music delivery are gaining momentum as an alternative and have helped to cut down on illegitimate file sharing.

About the index: The Global Web Index was created to derive insights on the global impact of web usage and social web involvement. The research involves twice-yearly interviews with 16,000 web users in 16 markets to provide perspective on web behavior and its impact on consumer behaviour, technology involvement, purchasing, content consumption, the effectiveness of marketing communications and the role for brands.

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