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Streaming Exclusives Could Double Piracy Rates, Study Warns

Annoying consumers with too many costly streaming options could backfire, survey suggests.

by Karl Bode
Oct 1 2019, 12:00pm

Image: Getty Images

Another new study indicates that piracy could increase dramatically if streaming content is fragmented across too many streaming services at too high a price point.

Broadband Genie, a UK broadband comparison website, conducted a survey of 1,500 consumers and found that 18 percent of respondents admitted to “often” or “occasionally” accessing content via illegal streams or file sharing services like BitTorrent.

The survey found that number would jump to 37 percent if users are inundated with too many content exclusives spread across too many services. 67 percent of those surveyed felt they already pay too much for television content, and 48 percent said that price remained the biggest problem with having multiple streaming services.

To be clear, the rise of cheaper, more flexible streaming alternatives is a huge improvement over the high cost of traditional cable TV, which for decades forced consumers to pay an average of $107 per month for bloated bundles of channels they often didn’t even watch. Historically terrible customer service and endless rate hikes only made things worse.

But with every broadcaster in your cable lineup is expected to launch its own streaming platform by 2022, companies are now engaged in a mad rush to lock down exclusives to their own platforms. As a result, users are increasingly being forced to hunt and peck through a growing roster of services and ever-shifting licensing agreements to find the content they’re looking for.

A fan of Star Trek? You’ll need to pay $6 to $10 a month for CBS All Access. Want to watch Stranger Things? That’s $9 to $16 for Netflix. The Office? $15 to Comcast. Fleabag? Another $9 to Amazon, please. The Handmaid’s Tale? $6 to Hulu; $12 if you don’t want ads.

Superficially, such exclusives make sense for companies looking to drive subscriptions by luring users in with must have content. But the tactic has a downside. A Deloitte study recently noted that nearly half (47 percent) of US consumers already suffer from “subscription fatigue,” and 56 percent were frustrated by quickly changing licensing deals.

While users can subscribe to and cancel different services to get access to the content they’re looking for, there remains a real risk that users will simply migrate back to piracy should accessing this content become too confusing and expensive, says Ernesto van der Sar, whose website TorrentFreak tracks piracy and the streaming industry.

“If people have to spend more money to satisfy their movie and TV consumption needs, a large group will either consume less or look for alternatives,” van der Sar told Motherboard. “A likely result is that more people will pirate on the side. The surge in pirate streaming boxes and illegal IPTV subscriptions suggests that this demand is already there.”

There’s some early evidence suggesting that may already be happening. After years of declines thanks to legitimate streaming services like Netflix, BitTorrent traffic has seen a subtle uptick in recent years as streaming sector fragmentation has grown.

“To get access to all of these services, it gets very expensive for a consumer, so they subscribe to one or two and pirate the rest.” Cam Cullen, VP of Global Marketing for network company Sandvine, said in a blog post last year.

It’s an ironic twist for a sector that spent years struggling to learn that the antidote for piracy is better, cheaper, legitimate services. Data indicates that piracy often acts as a sort of invisible competitor, setting the bar for consumer expectations. Fail to meet those expectations, and piracy increases. Whether this is “fair” to the entertainment sector doesn’t enter into it.

“Now that availability is no longer a problem in many markets, affordability and convenience are most important,” van der Sar said. He noted that one solution could ultimately be providing multiple services bundled through a single interface that helps simplify subscriptions and help track content, but it’s likely too early to know what this might look like in practice.

As countless streaming competitors rush toward the booming new market locking down exclusives to dominate the space, they’re understandably not spending much time thinking about the possible ramifications of flooding the field with too many pricey options—but there’s a number of indications that they probably should be.