Why Content Protection Is a Billion Dollar Problem

The business case to protect content is clear. Piracy extorts revenues, fosters black-market criminal activity and erodes earnings. When content is stolen, brand, image and reputation can erode to the point where they can’t be regained.

The losses can be immeasurable.

• Over-the-top (OTT), and specifically, direct-to-consumer (D2C), platforms are exploding.
• The exclusive content that OTT/D2C platforms develop is a key business asset.
• The need to protect that asset, keeping exclusive content truly exclusive, is imperative to securing and keeping subscribers — which translates to revenue.

OTT/D2C platforms understand that great, exclusive content is key to getting and keeping customers. A 2020 NPD Group study found that 21% of streaming video-on-demand (SVOD) subscribers had cancelled their service (or decreased their engagement) because they found better content from another service. Content providers spend billions of dollars developing original material. Doesn’t it make sense to protect it?

From a shareholder and stakeholder view, content protection is risk management. Few if any large sports, media or entertainment businesses operate today without strong risk management. In these businesses, content is the asset. Just as software development companies must protect the valuable programs they develop, or as an appliance manufacturer must protect its warehouse inventory, a content provider must protect its No. 1 asset.

Explosive Growth Demands Attention

OTT, and specifically D2C, platforms are exploding. OTT streaming may have officially surpassed its moniker: the top is showing no limits. Estimates vary, but some industry organizations see the global OTT streaming market growing from $121 billion (USD) in 2020 to $257 billion by 2025.

Fueling the growth are two notable drivers: changes in consumer behavior and a growing number of connected devices. Consumers are shifting from traditional cable to OTT subscriptions as they realize they can consume content for less – without paying for the channels or content they don’t want. At the same time, increasing penetration of connected devices and faster internet speeds around the world are making it easier for consumers to access to OTT services, any time and any place.

Around the globe, SVOD services are skyrocketing, with subscriptions set to increase by almost half a billion by 2026.

• In the United States: Revenue in the SVOD segment is projected to reach more than $32 billion this year, with a 9.3% annual growth rate through 2025. And in 2025, the number of users is expected to top 164 million.
• In Europe: The SVOD market alone is looking at a compounded annual growth rate nearing 11% between 2021 and 2025, with a value of $17.97 billion in 2025.
• In Latin America: Disney’s Star+ streaming service looks to attract 350 million subscribers by 2024, and HBO Max and ViacomCBS’ Paramount+ service both now operate in the region.
• In Southeast Asia: OTT video distribution revenue is projected at $4.5 billion by late 2025, up from $1.8 billion last year.

Direct-to-Consumer Growth

Within this landscape, D2C services are emerging as a preferred OTT business model. As providers offer content directly to consumers on a subscription basis – rather than provide it to others that include it as part of a broader line-up – they are launching their own services as well as expanding through partnerships, mergers and acquisitions.

In Asia, for instance, Netflix is looking for ways to reach every consumer. While D2C will remain its core business model, the company is partnering with telephone companies as well as device manufacturers – to the tune of 35 partners in the region.

Perhaps nowhere is the move to D2C more pronounced than in sports. Consider that the subscriber base for ESPN+ has been growing 75% year-over-year, reaching nearly 15 million this summer. According to a 2021 study from MediaKind, almost three-quarters of sports rights holders offer a subscription-based D2C service. From Europe and Asia to North and South America, most rights holders know that D2C is essential to fan engagement going forward, and that it offers huge untapped revenue opportunity. In fact, data from MediaKind suggests that live sports will, over the next five years, increasingly migrate away from the current pay-TV distribution model to a hybrid one that includes streaming video.

Perhaps nowhere is the move to D2C more pronounced than in sports.

Secure Exclusive Content > Grow Subscriber Base > Increase Revenues

For D2C providers, the line from securing content to increasing revenues is a direct one. Building anti-piracy measures into program and revenue planning is the most cost-efficient, effective way to protect content. Since D2C providers control their content from production through distribution, they can implement anti-piracy technology across their distribution chain with one integration.

Since D2C providers control their content from production through distribution, they can implement anti-piracy technology across their distribution chain with one integration.

In working with a strong content protection partner, D2C providers can accurately assess the scale of piracy with which they are dealing. Then, implementing anti-piracy solutions becomes targeted and exacting – to the point of working in real-time and taking action against offending users in a matter of minutes.

Getting Real Results in Combatting Piracy

The explosive growth of OTT/D2C services is demanding conscious action in content protection today. That drive to act will strengthen even more as the industry matures, the rush to add subscribers levels off, and the market consolidates further. D2C providers will need to focus on subscriber retention and anti-piracy measures to protect revenues.

While piracy may never be completely eliminated completely, D2C providers have an opportunity – and a responsibility – to protect their content throughout the development and distribution chain. With the right content protection partner, effectively tackling piracy is within reach

About Friend MTS

At Friend MTS, we work with sports organizations, and media and entertainment businesses on six continents to integrate content protection measures as a normal course of their business.

From 24/7 global monitoring and fingerprinting to advanced subscriber watermarking and piracy analytics, Friend MTS provides a 360-degree view of the constantly shifting content piracy ecosystem. Business insight and intelligence services measure streaming piracy consumption, while scalable technology adapts to any platform. Able to customize and tailor solutions to meet individual requirements, Friend MTS technology eliminates illegal streaming swiftly and effectively.

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