Pirate treasure: How criminals make millions from illegal streaming

Digital pirates can make hundreds of millions of pounds of profits per year by monetising stolen content, according to a new report.

Cracking Down on Digital Piracy has detailed several of the ways in which criminals are earning money from piracy.

The first stage, however, is actually getting the content online.

So-called “release groups” compete with each other to source content and get it up first, in order to attract the most traffic, downloads and money, the report says.

With new releases, a “cammer” will be used to record the film at the cinema, and can even upload the content in real-time. Release groups can also use editing software to combine video footage stolen from one source with audio stolen from another.

They can rip content from online services like iTunes too, and the report says there has been a “significant rise” in the number of streams ripped from live TV and video-on-demand, usually high-profile sports fixtures.

They’re still ripping content from DVDs and Blu-Rays too, using specialist software, but this is understandably in decline.

One relatively new way to access illegal content is through so-called Kodi boxes. According to the report, significant numbers of British criminals are importing these boxes wholesale through entirely legal channels, modifying them at home and selling them on.

Others, meanwhile, are working with "sophisticated criminal networks" to bring them to the UK.

Once pirates have put the content online – often on multiple sites, to maximise their chances of being found by users, and to ensure they remain online even if one of their sites is shut down – they can start monetising it.

The operators of streaming sites make the most money from piracy, though it isn’t clear if they’re always made up of the same people as release groups.

According to the report, site operators “often steal innocent people’s credit card details first, so they can access hundreds of premium channels under those people’s names and cover their own tracks. They then put these streams online for their customers to watch and make money from them.”

Advertising is key to “the majority” of digital piracy groups, the report adds.

“These ads are typically banner ads or pop-up windows for casinos, dating sites and download services, often based in Russia or China,” it explains. “But some of them feature ads from legitimate brands, helping them fake an air of respectability.

“Many of these ads are placed through ‘adtech platforms’ that automate the process of publishing advertising across the internet, which means legitimate brands often don’t know exactly where their ads are going but can give the site an impression of respectability.”

Some sites also offer paid-for “premium” subscription plans to users, which promise no advertising and faster downloads.

Prices and packages vary, tend to range between £5 and £50 per month, the report says.

The most worrying claim outlined in the report is that other cyber criminals are paying pirates to let them put malware on their sites.

“The criminals behind digital piracy often make the content freely available as ‘bait’ to attract large numbers of visitors,” the report says.

“They then make money by charging other cyber criminals to put malware on the site, enabling those criminals to hijack the users’ computers.”

As we’ve seen in recent months, thieves have started targeting content creators too, and are now trying to earn money by hacking and threatening to leak unreleased TV shows and films.

A group attempted to hold Disney ransom by claiming to have got its hands on a copy of Pirates of the Caribbean: Salazar's Revenge earlier this year. Disney later concluded that it was not hacked.

Similarly, a hacking group called The Dark Overlord demanded money from Netflix after leaking an unfinished episode of Orange is the New Black.

“People seem to think that because parts of the mainstream media don’t see this as a big deal, that there’s not organised crime behind the selling,” said the Intellectual Property Office.

“Time will reveal the tens of millions of pounds involved in these international networks, and the potentially crippling impact on creation in broadcasting.”

The report was created in consultation with the Federation Against Copyright Theft, the Police Intellectual Property Crime Unit, the Intellectual Property Office, Police Scotland, Entura International, the Government Agency Intelligence Network and broadcasters.