With streamers raising prices, digital piracy is back

As the media disruptors of the last decade – especially Netflix – are morphing into the very same production companies that they disrupted, online piracy is getting back on its feet.

Just a few years ago, the so-called cord-cutters were having a field day. Why have cable when you can subscribe to Netflix or HBO Max (now simply Max) and consume content whenever you want, no strings attached?

Plus, you could share accounts with your parents and friends living near or far away, so the price was almost ridiculously affordable – even to people in poorer countries where digital piracy used to be the only realistic way to watch a fresh movie or TV show.

Well, that it’s all changed, and cable doesn’t seem like such a bad deal anymore. With a plethora of streaming platforms now crashing back down to earth and having to constantly raise prices, piracy has made a comeback.

It’s quite clear. Most technology experts and bloggers that Cybernews has reached out to have no doubt whatsoever that both the oversaturation of streaming services and the resulting higher costs per consumer have contributed to a resurgence of online piracy.

From the disrupter to the disrupted

The usual trendsetter is, of course, Netflix. In 2015, the Standard plan (HD, two screens) only cost $9. Now, the price has reached $15.49 – and the Wall Street Journal has just reported that there are plans to raise it again.

Max was never cheap but still increased the price from $14.99 to $15.99 early in the year. This week, Disney Plus is raising the price from $11 to $14. Apple TV+’s price rose to $6.99 from $4.99 in 2022.

Yes, these are all prices for ad-free tiers, and most streamers have by now introduced cheaper advertising-based plans – but most agree that it’s not the same, and ads really do annoy a lot of people.

Besides, when consumers both pay and have to watch ads, it really feels that the streamer is having cake and eating it, too. That’s probably why free ad-based platforms such as Paramount’s Pluto TV, Fox’s Tubi, or Amazon’s FreeVee are becoming really popular.

Anyway, when there are so many platforms around, all these price hikes quickly add up. Today, paying for the various streaming services of your choice is no different than paying for cable. Crackdowns on account sharing, now implemented by Netflix and Disney, don’t help either.

But many users, especially younger folks, don’t want to pay for cable and choose piracy instead, throwing the whole scene back to the pre-streaming era. Omar Zulfi, a music producer and digital entrepreneur, thinks that this is almost inevitable.

“When these streamers first rose to power, they did so because of a focus on the value to the customer when compared with piracy. They offered customers a solution that was simply better value than pirating all your media. And people were willing to pay for it,” Zulfi told Cybernews.

“But with so many different services to subscribe to for different content, password crackdowns, continual price increases, and the forthcoming wave of ads being included even in paid streaming services, I think a lot of people will start considering going back to pirating their media. And the overall economic downturn won't help.”

Zulfi added: “If the value is there, the consumers are willing to pay. If you start putting up roadblocks that decrease the value, they may no longer think it's worth it.”

The youth turn to piracy again

Sure, piracy may have never actually gone away, but hundreds of millions really were happily and legally consuming content on cheap streaming platforms. But new data reveals the stark truth: piracy, which costs the US economy at least $29 billion in lost revenue each year, is back.

MUSO, a data company that focuses on piracy and unlicensed media consumption, said in a new report that there was a clear correlation between box office revenue and illegal consumption.

A research study into the audience’s demand for nearly 100 films has proven precisely this, even though the purpose of the study was, of course, to try to create a new, “holistic” way to measure film consumption and demand.

Already in 2021, another piece of research conducted by Akamai found that piracy via streaming sites alone increased by 16% in 2021 when compared to 2020.

Of course, piracy rose during the pandemic when hundreds of millions of people were forced to remain at their homes. However, the fact that content is now fragmented across multiple services is probably more important today.

"People want to watch what they want when they want it, and they don't want to have to subscribe to 20 different services or pay exorbitant rates to be able to do that."

Gareth Barkin.

Mollie Newton, an avid streamer contacted by Cybernews, asks: “It’s an intriguing chain reaction to consider: if mainstream platforms become less user-friendly or economical, could they inadvertently be stoking the fires of piracy?”

Gareth Barkin, a media anthropologist and professor at the University of Puget Sound in the US, certainly agrees. He frequently discusses media consumption and piracy with his students who he says “tend to be a population where torrenting movies and TV shows is pretty mainstream.”

“Crackdowns on password sharing are likely to have more of an impact on young adults than incremental price increases, and will likely lead to an increase in piracy. A lot of the younger Americans have a subscription to streaming services through their parents,” Barkin told Cybernews.

He thinks that people who pirate content are often also people who spend a good amount of money on legal media consumption – they just grow frustrated by the limited catalogs and arbitrary restrictions of streaming services.

“They want to watch what they want when they want it, and they don't want to have to subscribe to 20 different services or pay exorbitant rates to be able to do that. So, they'll subscribe to a few, but if they can't find what they want they'll consider pirating it instead,” explained Barkin.

Spotify showing the way

Although music piracy is also experiencing an uptick, illegal streaming and downloading of films and TV shows remains the largest contributor to global piracy statistics. Piracy of this sort took up 24% of the global bandwidth in 2023.

Barkin told Cybernews he thought piracy is so prevalent in video because the industry took the wrong turn – unlike the world of music. Purchasing singles and albums separately used to be quite pricey, but then legal and less expensive alternatives such as Spotify came along and are happily used by hundreds of millions.

Daniel Ek, the CEO of Spotify, has himself said streaming services convert pirates into paying customers since they’re attractive to the younger generation.

Sweden, which is home to both Spotify and The Pirate Bay, was the leader in digital piracy due to relaxed copyright laws. However, it quickly saw a 25% drop in piracy from 2009–2011, and now, streaming services dominate the way Swedish people listen to music.

Barkin stresses that Spotify wins because almost all of the world’s music is on this single platform – unlike video streaming.

“These services have nearly eliminated music piracy, which used to be rampant, because they're offering massive music catalogs for a reasonable price, and they make it easy to access in a variety of ways. So you can actually listen to what you want when you want it, which is not the case with video content platforms,” Barkin told Cybernews.

The hope is that the rise in digital piracy is not going to become a long-term trend. The industry has to evolve very quickly in today’s market so new features, pricing models, or even powerful and reasonably-priced bundles might be introduced to retain paying users and discourage illegal downloads.

Of course, maybe piracy even isn’t something worth worrying about. Yes, Hollywood cries about “lost revenue,” but the global entertainment revenue reached a record $2.3 trillion in 2021, so the actual impact of piracy on the industry is debatable.

Besides, piracy is even broadly tolerated by legal professionals. A study in 2021, where interviews with 50 Harvard lawyers were conducted, found that digital piracy was not generally viewed as theft but as “fair” when availability is limited.