Report reveals the six business models behind online copyright infringement
A data driven study jointly commissioned by Google and PRS for Music which was undertaken by BAE Systems Detica has identified six distinct business models behind online copyright infringement, with each one having clear commercial purposes.
This new study provides for the first time detailed research regarding the business models that are most commonly used to infringe copyright online. The data demonstrates:
- Advertising, overwhelmingly (86%) from advertisers outside of the mainstream, provides significant sources of revenue for these sites
- Large numbers of sites also depend on credit card and online payment facilities
- A small proportion of sites are hosted in the UK with money flowing mostly overseas to countries including Russia, Sweden, the United States, and the Netherlands
- The type of sites which are growing in popularity and how users arrive at these sites
This is the first time that copyright infringing sites have been analysed in this way, with the results allowing internet companies, rights holders and policymakers to better understand the range of responses necessary to tackle the challenge. By understanding these sites’ business models, it is likely that measures targeted at revenue generation may well prove effective in helping stem online infringement.
Our research shows there are many different business models for online infringement which can be tackled if we work together. The evidence suggests that one of the most effective ways to do this is to follow the money, targeting the advertisers who choose to make money from these sites and working with payment providers to ensure they know where their services are being used.
This groundbreaking research tells us two things. Firstly sites involved in copyright infringement are businesses with real costs and revenue sources. They receive subscription or advertising revenue, pay their server or hosting costs but fail to pay the creators of content on which their businesses depend. Secondly, not all of these business models are the same, and the Government now has the evidence to understand which policy levers to apply to deal with these different businesses effectively.
The report can be viewed in full here
Notes to editors
1. The report’s authors would like to thank the BPI, Premier League, FACT, UKIE and the Publishers Association for providing data to support this research.
2. The six business models can be categorised as follows:
- Segment 1, Live TV Gateway: offering links to streams of live free-to-air and pay TV this segment is the fastest growing and contains 33% of all sites analysed.
- Segment 2, Peer-to-Peer Community: offering a range of content to users, the second fastest growing segment and constituting 19% of all sites analysed.
- Segment 3, Subscription Community: users pay a fee for a well-organised range of content types, not including live TV. Only 5% of sites fall into this segment and growth unclear.
- Segment 4, Music Transaction: allowing users to purchase content, this segment contained 13% of sites analysed and is currently in decline.
- Segment 5, Rewarded Freemium: offering financial rewards to users that upload content, constituting 18% of sites analysed and is currently a declining segment.
- Segment 6, Embedded Streaming: providing hosting from which others can stream. Declining but currently represents 12% of sites analysed.
3. The report is a snapshot of the market from April – May 2012
4. The study was produced with the intention to inform debate but contains no explicit policy recommendations to Government or other affected parties.
For more information, get in touch:
Google: Stephen Rosenthal
020 7184 3317
About Google Inc.
Google’s innovative search technologies connect millions of people around the world with information every day. Founded in 1998 by Stanford Ph.D. students Larry Page and Sergey Brin, Google today is a top web property in all major global markets. Google’s targeted advertising program provides businesses of all sizes with measurable results, while enhancing the overall web experience for users. Google is headquartered in Silicon Valley with offices throughout the Americas, Europe and Asia.