OTT and pay-TV companies will lose an estimated $9.1 billion in revenue to piracy and account sharing this year, according to new research from Parks Associates. By 2024, researchers’ OTT video piracy lossses forecast calls for that number to hit $12.5 billion, representing a 38% growth rate.
The research firm added that consumers who watch an OTT video service for free but without ads are 22% more likely than average broadband households to subscribe to OTT services, three times as likely to use ad-supported services, and twice as likely to use transactional online video services.
At the same time, growth in connected device ownership has shifted the focus of pirates towards the online video ecosystem—with one-in-five U.S. broadband households using a piracy app, website or jailbroken device.
OTT Video Piracy Losses Forecast
“Piracy is a complex issue that cannot be addressed with a single solution or by targeting a single-use case,” said Brett Sappington, Parks Associates’ senior research director and principal analyst, in a prepared statement about the OTT video piracy losses forecast. “Most pirates also subscribe to at least one OTT service. They are not simply thieves looking to steal content but are video enthusiasts who engage with many different services. OTT services could better reach these consumers through ad-based content, which also aligns with these users’ general belief that ‘movies/music should be given away for free.'”
Sappington added: “Growing subscriber numbers and an increased number of services signal a very healthy OTT market, but more services and aggressively promoted content could incite more piracy over time. Consumers will hit an upper limit to spending eventually. When that happens, they will resort to pirate tactics to get the content that they want, particularly for sports and other content where trials are not available.”
Men, consumers under age 35, and households with low annual incomes pirate content at a disproportionate rate.