Piracy 'significantly' declining due to availability of streaming services

As predicted by industry, the rates of piracy are dropping significantly now that streaming services such as Netflix are available in Australia.

The availability of streaming services, as predicted by industry, has brought down online copyright infringement of TV shows, movies, music, and games "significantly", new research released by the Australian government has shown.

The Consumer survey on Online Copyright Infringement 2016 [PDF], conducted by TNS for the Department of Communications, showed that once again, those who consumed both lawful and unlawful content spent more money than those who consumed all of their content legally.

Those downloading content illegally fell from 43 percent to 39 percent over the year, while those who streamed content legally rose from 54 percent to 57 percent. Those streaming TV shows rose increased from 34 percent to 38 percent; those streaming movies rose from 25 percent to 29 percent; and those streaming music fell from 29 percent to 26 percent.

Illegally downloaded movies dropped from 18 percent to 16 percent; music dropped from 29 percent to 26 percent; and TV from 19 percent to 17 percent.

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(Image: Screenshot by Corinne Reichert/ZDNet)

In the first three months of the year, 23 percent of all Australian internet users over the age of 12 consumed at least one item of unlawful content, down from 26 percent last year, while just 6 percent of all internet users over the age of 12 only consumed unlawful content.

For movies and TV shows, Netflix was used by 27 percent of consumers, jumping from just 9 percent last year, making it the most popular service for consuming TV and movies. The report said Foxtel Play/Presto, Stan, and SBS On Demand also had "significantly higher levels of usage" throughout 2016.

For music-streaming services, Spotify was used by 30 percent of consumers, up from 19 percent, while Pandora grew from 9 percent to 13 percent during the year.

The proportion of internet users spending money on legally consuming content also increased substantially, with movie subscriptions growing from 4 percent to 14 percent, and the amount of money by almost fivefold, from AU$1.10 to AU$5.10; TV subscriptions grew to 16 percent and the average amount spent reached AU$5.90; and music subscriptions rose from 7 percent to 10 percent, and the average amount from AU$6.50 to AU$11.20.

Of those who used paid streaming services such as Netflix, convenience was the most common reason, cited by 50 percent, followed by speed, at 39 percent; wanting to support the rights holders, at 37 percent; and not wanting to use illegal sites, at 37 percent.

The most common reasons for downloading illegal content were cost, at 52 percent; convenience, at 44 percent; and speed, at 41 percent.

Last year's research report showed similar declines thanks to the availability of streaming services.

"Rights holders' most powerful tool to combat online copyright infringement is making content accessible, timely, and affordable to consumers," Australian Prime Minister Turnbull conceded last year in response.

Despite this, the government decided to take a hard line with policing piracy; Attorney-General George Brandis and Communications Minister cum Prime Minister Malcolm Turnbull asked internet service providers (ISPs) and rights holders to collaborate on creating a three-strikes policy in late 2014, which was released in the form of a draft code [PDF] last year.

The Communications Alliance and Foxtel in April wrote to the Australian Communications and Media Authority (ACMA) saying, however, that the three-strikes policy should be shelved because ISPs and rights holders were unable to reach an agreement on who should bear the costs of the regime.

The letter noted that over the past few months, the copyright infringement battle has moved to the courts instead, where rights holders and ISPs are arguing over who should bear the cost of blocking foreign piracy websites.

Comms Alliance CEO John Stanton said the government should also pause to consider whether piracy is already being solved by streaming services.

"What we're looking at doing is making a joint approach to the minister [for communications] with rights holders to say, 'well, given the focus is on website blocking at the moment, let's put that [three-strikes] draft code into abeyance, and not have the ACMA seek to further examine it for possible registration, and we'll come back in 12 months and see whether it makes sense to try and reinvigorate those commercial discussions'," Stanton said in April.

"So hopefully that will give us at least a good holding position until we see in a year's time whether there really is a problem of scale that needs to be dealt with by a costly and complex scheme."

Internet Australia CEO Laurie Patton on Monday said the government's research points to constant predictions from industry that the availability of streaming services would combat piracy without the need for site-blocking legislation and a three-strikes code for consumers.

"Our view, which was the prime minister's stated position when he was communications minister, is that the best way to deal with unlawful downloading is for rights holders to make their content accessible at reasonable prices," Patton said.

"This latest report supports this proposition in that the entry of Netflix and local streaming services has indeed seen a significant decline."

In court, ISPs and rights holders are fighting over who should bear the costs associated with the the Copyright Amendment (Online Infringement) Act 2015, which passed both houses of parliament in mid-2015 and allows rights holders to obtain a court order to block websites hosted overseas that are deemed to exist for the primary purpose of infringing or facilitating infringement of copyright under Section 115A.

ISPs have argued that they are an innocent party to the proceedings, while rights holders say carriage services facilitate copyright infringement.

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