Despite Massive Site-Blocking, Russian Pirate Video Market Doubles

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Site-blocking is supposed to be an effective tool for dealing with piracy but research from Russia paints a rather different picture. Despite blocking thousands of domains, last year the market for pirate video more than doubled in the region, with the average pirate site generating around $156,000pa and some into the millions.

On many occasions, outgoing MPAA chief Chris Dodd has praised countries that have implemented legislation that allows for widespread site-blocking.

In 2014, when the UK had blocked just a few dozen sites, Dodd described the practice as both “balanced and proportionate” while noting that it had made “tremendous progress in tackling infringing websites.” This, the former senator said, made it “one of the most effective anti-piracy measures in the world.”

With many thousands of ‘pirate’ sites blocked across the country, perhaps Dodd should ask the Russians how they’re getting on. Spoiler: Not that great.

According to new research published by Group-IB and reported by Izvestia, Internet pirates have been adapting to their new reality, finding new and stable ways of doing business while growing their turnover.

In fact, according to the ‘Economics of Pirate Sites Report 2016’, they’ve been so successful that the market for Internet pirate video more than doubled in value during 2016, reaching a peak of 3.3 billion rubles ($57.2m) versus just 1.5 billion rubles ($26m) in 2015. Overall Internet piracy in 2016 was valued at a billion rubles more ($74.5m), Group-IB notes.

According to the report, Russian pirates operated with impunity until 2012, at which point the government – under pressure from rightsholders – began introducing tough anti-piracy legislation, which included the blocking of pirate domains. Since then there have been a number of amendments which further tightened the law but pirates have adapted each time, protecting their revenue with new business plans.

Group-IB says that the most successful pirate site in 2016 was Seasonvar.ru, which pulled in a million visitors every day generating just over $3.3m in revenue. Second place was taken by My-hit.org, with almost 400,000 daily visitors generating an annual income of $1.2m. HDrezka.me served more than 315,000 people daily and made roughly the same to take third. Fourth and fifth spots were taken by Kinokrad.co and Baskino.Club.

Overall, it’s estimated that the average pirate video site makes around $156,000 per year via advertising, subscriptions, or via voluntary donations. They’re creative with their money channels too.

According to Maxim Ryabyko, Director General of Association for the Protection of Copyright on the Internet (AZAPO), sites use middle-men for dealing with both advertisers and payment processors, which enables operators to remain anonymous.

Like in the United States, UK and elsewhere in Europe, lists of pirate sites have been drawn up to give advertisers and networks guidance on where not to place their ads. However, plenty of companies aren’t involved in the initiative. When challenged over their ads appearing on pirate sites, some protest that it hasn’t been proven that the sites are acting illegally, so the business will continue.

“There is no negative attitude towards piracy by intermediaries. Their money is not objectionable. Sometimes they say: ‘Go and sue. There will be a court hearing, there will be a decision, and we will draw conclusions then’,” Ryabyko told Izvestia.

Dealing with pirates in the criminal arena isn’t easy either, with key players admitting that the police have other things to concentrate on.

“Law enforcers do not know how to search for pirates, they have other priorities,” says Sergei Semenov of the Film and TV Producers Association.

“Criminal prosecutions in this area are a great strain – single cases require a lot of time for investigation and going to court does not achieve the desired effect. We therefore need to diversify the grounds for bringing people to justice. We need to see how this can be applied.”

One idea is to prosecute pirates for non-payment of taxes. Well, it worked for Al Capone….

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