Business Models of Pirating Websites Studied by Google in UK

Google and PRS for Music recently commissioned a study from data organization company BAE Systems Detica that discovered commercial purposes behind business models used by copyright infringing websites. PRS for Music, formally known as the Performing Right Society is a UK copyright collection society that manages about ten million musical works. A PRS for Music license gives a user permission to use a piece of musical work in circumstances such as TV or radio.

BAE Systems Detica collected a sample of 153 sites along with public information to build a segmentation model that splits the study into six major business models: Live TV Gateway, P2P Community, Subscription Community, Music Transaction, Rewarded Freemium, and Embedded Streaming. Each segment is identified by the characteristics of the type and operation of the sites found within them.

Key characteristics of each segment reveal what types of pirating sites are growing and how users are brought to these sites, as well as how the content is provided to a user. They also illustrate the most popular locations of the IP addresses and that many of these sites depend on credit card and online payment tools. Perhaps one of the most significant discoveries is that advertising, most significantly from smaller companies, provides most of the revenue for these sites.

The discoveries made by this study will help policymakers to better understand how to uproot the online copyright infringement industry. The government now holds the tools necessary to target advertisers and payment providers who may unknowingly be supporting the illegal sites.

The full 64-page report can be found here. According to BAE:

The Six Business Models for Copyright Infringement is a segmentation driven investigation of sites that are thought by major rights holders to be significantly facilitating copyright infringement. In this study, we investigate the operation of a sample of these sites to determine their characteristics.

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