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Advertising profits fuel copyright infringing websites

Findings from online rights protection firm Incopro indicate that 88 per cent of the most popular websites used to obtain infringing copyright content use advertising as a key source of funding. The report – Revenue sources for websites making available copyright content without consent in the EU – analysed the top 250 websites used in each of the five key European Union countries (France, Germany, Italy, Spain, and the UK) to obtain infringing content.

The largest proportion of advertising on the sites (31.5 per cent) was categorised as ‘Trick Button’ and malware adverts. ‘Trick Button’ or malware adverts typically do not mention the advertiser in the initial ad. Instead, these adverts trick users into downloading potentially unwanted programmes or accessing harmful links.

Adverts for adult content sites and services accounted for 10.4 per cent of all advertising.

According to Simon Baggs, Managing Director, Incopro Limited, advertising revenues provide an economic incentive for websites in the infringing ecosystem. “Often, the ‘advertising’ will cause harm to a user’s computer or take the form of promoting goods and services that are harmful, for example adverts for unrestricted adult content websites. If brands, agencies and authorities collaborate to disrupt advertising revenue streams, we can restrict the lifeblood of these sites,” he advised.

Other major revenue streams for infringing sites are payments or donations from users to the site’s operator via payment providers. Bitcoin was the third most popular method of payment offered by the sites, behind payment by Visa and Mastercard.

The report, which was commissioned by the Motion Picture Association (MPA) also examined the main advertising intermediaries that distribute adverts on behalf of companies and brands across the sites in the study. These intermediaries are responsible for the ‘creative’ and the actual delivery of adverts to the website, which means brands have little control over where the advert eventually appears. AdCash, PropellerAds/OnClickAds2, DirectREV, and Matomy Media Group are named as the top advertising intermediaries.

Gambling advertising accounted for 18.1 per cent of all adverts – the highest proportion of any sector across all the countries examined.

The creative and advertising industries in the UK have been working closely with the Police Intellectual Property Crime Unit (PIPCU) on the ground-breaking Operation Creative initiative. The scheme deploys a variety of tactical options, including the use of an Infringing Website List (IWL), which have successfully addressed instances of many major brands appearing on illegal sites. PIPCU and the Federation Against Copyright Theft (FACT) are now actively engaged with the Gambling Commission to ensure that gambling operators licensed by the Commission do not advertise on these sites.

The report follows an earlier Digital Citizen’s Alliance study, Good Money Gone Bad, which found that infringing websites globally make a projected $227 million in annual advertising revenue. The 30 largest sites that profit exclusively from advertising averaged $4.4 million annually, while the most heavily trafficked BitTorrent and P2P portal sites topped $6 million every year.

The film and television industries continue to meet consumer demand for digital content by expanding the quality and quantity of legal online content services, providing a safe alternative to pirate websites. A recent report from KPMG found 86 per cent of the most popular and highest quality film and television content is now available across legal digital platforms in the UK.

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